Transfer Pricing Services in UAE: Arm's Length Compliance for Corporate Tax
Transfer pricing arrived in the UAE with corporate tax — and it applies far more widely than most owners think. Under Federal Decree-Law No. 47 of 2022, every transaction with a Related Party or Connected Person must be at arm's length: intercompany sales, management fees, loans, royalty charges, shared services, even the salary a company pays its owner. There is no size exemption from the arm's length principle itself — only from some documentation. We help UAE groups price related-party dealings defensibly, prepare the required documentation, and complete the disclosure forms that now travel with the corporate tax return.
Who Do UAE Transfer Pricing Rules Apply To?
- Groups with UAE and foreign entities trading with each other — goods, services, IP, financing;
- Domestic groups — two UAE companies under common ownership charging each other anything;
- Free zone companies — TP compliance is a hard condition of Qualifying Free Zone Person status; a QFZP that ignores it risks the 0% rate itself (see our free zone accounting service);
- Owner-managed companies — payments to owners, directors, and their relatives (Connected Persons) must reflect market value to be deductible.
UAE Transfer Pricing Documentation Requirements
| Requirement | Who it applies to |
|---|---|
| Arm's length pricing of all related-party transactions | Everyone — no threshold |
| TP disclosure form with the corporate tax return | Taxable persons whose related-party/connected-person transactions exceed FTA materiality thresholds |
| Master File & Local File | Members of MNE groups with consolidated revenue ≥ AED 3.15 billion, or UAE businesses with revenue ≥ AED 200 million |
| Country-by-Country Reporting | MNE groups with consolidated revenue ≥ AED 3.15 billion |
Below the Master/Local File thresholds you must still be able to demonstrate arm's length pricing if the FTA asks — a benchmarked policy memo is the practical minimum we recommend.
Our Transfer Pricing Services
- Related-party mapping — identifying every transaction and Connected Person payment in scope;
- Benchmarking studies — selecting the right method (CUP, TNMM, cost plus, resale price) and comparables to support your margins and charges;
- Intercompany agreements — putting real contracts behind management fees, loans, and service charges;
- Disclosure form preparation filed with your corporate tax return;
- Master File / Local File preparation for groups over the thresholds, and audit defence if the FTA queries your pricing.
Frequently Asked Questions
Do small UAE companies need transfer pricing?
The arm's length principle applies to all related-party transactions regardless of size. Formal Master/Local File documentation only applies above the revenue thresholds, but pricing must still be defensible and the disclosure form may still be required.
Does transfer pricing apply between two UAE companies?
Yes. Domestic related-party transactions are fully in scope — including between a mainland entity and a free zone affiliate, where mispricing can affect both taxable income and QFZP status.
Are salaries to owners covered?
Payments to Connected Persons — owners, directors, and their related parties — must correspond to market value to be deductible for corporate tax.
Related-party charges in your group? Book a TP scoping call — we'll tell you exactly which obligations apply and what a defensible file costs.
Book a Transfer Pricing Review | Call or WhatsApp: +971 52 406 3000