UAE Transfer Pricing Services
Master File, Local File & Disclosure Compliance, filed defensibly.
Transfer pricing specialists help UAE businesses meet the Arm's Length Principle, avoid FTA penalties and stay audit ready under Federal Decree Law No. 47 of 2022. KGRN's transfer pricing team helps you identify your obligations, prepare defensible documentation and file correctly, before an FTA enquiry ever arises.
Every controlled transaction is tested against the arm's length principle
Trusted across UAE industries since 2007
What is Transfer Pricing in the UAE?
Transfer pricing refers to the pricing of transactions or arrangements between Related Parties and Connected Persons. These arrangements are generally referred to as Controlled Transactions.
The Arm's Length Principle
The Arm's Length Principle requires each transaction to be assessed as though the parties were independent and negotiating freely. The assessment is not limited to the amount charged. It also considers contractual terms, functions performed, assets used, risks assumed, market conditions and the actual conduct of the parties.
The Four Pillars of UAE Transfer Pricing Compliance
UAE transfer pricing compliance can generally be divided into four areas, each with its own evidence, thresholds and filing rhythm.
Arm's Length Pricing & Supporting Records
Every Taxable Person entering into Controlled Transactions should demonstrate pricing consistent with the Arm's Length Principle, through structure charts, intercompany agreements, functional analyses and benchmarking studies. Documentation should reflect the actual conduct of the parties.
Transfer Pricing Disclosure Form
Required where the value of transactions with Related Parties or Connected Persons exceeds applicable disclosure thresholds. Filed as part of the Corporate Tax Return, generally within nine months from the end of the Tax Period.
Master File & Local File
Required under Ministerial Decision No. 97 of 2023 for qualifying MNE Groups or Taxable Persons above the revenue threshold. Maintained and made available to the FTA within 30 days of a request.
Country by Country Reporting
A separate requirement for qualifying MNE Groups, generally UAE headquartered groups with consolidated revenue of at least AED 3.15 billion, reporting revenue, profit, tax paid, employees and assets by jurisdiction.
Transfer Pricing Disclosure Form thresholds
Businesses should reconcile the disclosure with their financial statements, general ledger, Related Party note, intercompany balances and transfer pricing documentation before filing.
Related Party schedule
Triggered where aggregate Related Party transactions exceed this value during the Tax Period.
Transaction category disclosure
Applies where a relevant transaction category exceeds this value and the Related Party schedule applies.
Connected Persons schedule
Triggered where payments or benefits to a Connected Person exceed this value during the Tax Period.
Master File and Local File
A UAE entity may fall within the documentation requirement even where its own revenue is below AED 200 million, if it forms part of a qualifying MNE Group.
Master File
Provides a high level overview of the MNE Group's global business and transfer pricing framework.
- Legal & ownership structure
- Principal business activities & profit drivers
- Intercompany financing & IP
- Consolidated financials, APAs & tax rulings
Local File
Provides detailed information about the UAE Taxable Person and its material Controlled Transactions, demonstrating why the pricing outcome is arm's length, not just describing it.
- Business activities & industry conditions
- Functional analysis & tested party selection
- Method, benchmarking & arm's length range
- Segmented financials reconciled to statements
The Five UAE Transfer Pricing Methods
Aligned with the OECD Transfer Pricing Guidelines. The most appropriate method is selected based on the nature of the transaction, functions performed, assets used, risks assumed and available comparable data.
Comparable Uncontrolled Price
Compares the price charged in a Controlled Transaction with the price charged in a comparable transaction between independent parties.
Commodities, standardised goods, certain loans, rentals and licences where reliable comparable information exists.
Resale Price Method
Begins with the price at which goods purchased from a Related Party are resold to an independent customer; an appropriate resale gross margin is deducted to determine the arm's length purchase price.
Routine distributors.
Cost Plus Method
Starts with the direct and indirect costs incurred by the supplier; an arm's length gross mark up is then applied, considering functions, assets, risks and market conditions.
Contract manufacturing and routine intra group services.
Transactional Net Margin Method
Examines the net profit earned by the tested party relative to an appropriate base such as sales, costs or assets, compared with margins earned by comparable independent businesses.
Cases where direct price comparables are unavailable.
Profit Split Method
Identifies the combined profits arising from Controlled Transactions and allocates them between the parties on an economically valid basis.
Unique and valuable contributions or highly integrated operations.
Why benchmarking matters
A benchmarking study is used to determine whether the pricing or profitability of a Controlled Transaction falls within an arm's length range. The analysis must be linked to the actual transaction and commercial profile of the parties, not treated as a generic database exercise.
Common UAE Transfer Pricing Risk Areas
Intra group services
Management charges need evidence the service was actually provided, delivered a commercial benefit, wasn't duplicated, and carried an arm's length mark up.
Related party loans
Interest free loans or unsupported rates may create exposure. The analysis considers creditworthiness, currency, duration and security.
Payments to Connected Persons
Payments to shareholders, directors and key management are deductible only to the extent they reflect market value and business purpose.
Free Zone transactions
Qualifying Free Zone Persons remain subject to transfer pricing rules. Pricing that isn't arm's length can affect QFZP status itself.
From open file to a defensible position
Four checkpoints, each one stamped only once the work behind it is done. Scroll into view to watch the file get processed.
Every checkpoint, covered by one team
Our transfer pricing specialists combine deep knowledge of Federal Tax Authority expectations with practical, business first execution.
TP Assessments & Impact Evaluations
Identify your Related Parties, Connected Persons and Controlled Transactions, and pin down your exact disclosure and documentation obligations.
Talk to a specialistDisclosure Form Preparation
Accurate, reconciled and filed within your Corporate Tax Return deadline, checked against your financials before submission.
Talk to a specialistLocal File & Master File
Documentation that goes beyond describing the transaction, and demonstrates why the pricing outcome is arm's length.
Talk to a specialistBenchmarking Studies
Functional analysis, tested party selection, comparable search and arm's length range determination using reliable data sources.
Talk to a specialistFAR Analysis
A clear view of who does what, who owns what and who bears the risk across your related party dealings.
Talk to a specialistFTA Enquiry & Dispute Support
Defensible records and expert representation if your transfer pricing position is questioned, plus APA readiness and CbCR support for qualifying groups.
Talk to a specialistStraight answers on UAE transfer pricing
Transfer pricing in the UAE refers to the pricing of transactions between Related Parties and Connected Persons, known as Controlled Transactions. UAE Corporate Tax law requires these transactions to follow the Arm's Length Principle, meaning the pricing should match what independent parties would agree under similar conditions.
Yes. The Arm's Length Principle applies to businesses of all sizes that transact with Related Parties or Connected Persons. Revenue thresholds only determine whether additional disclosure or documentation is required; they do not remove the underlying arm's length obligation.
A Taxable Person must maintain a Master File and Local File if it is a Constituent Company of an MNE Group with consolidated group revenue of at least AED 3.15 billion, or if its own revenue is at least AED 200 million during the relevant Tax Period.
Yes. Qualifying Free Zone Persons are subject to transfer pricing rules, and pricing that isn't arm's length can affect both their taxable income and their Qualifying Free Zone Person status.
An APA is an agreement with the FTA that fixes the criteria used to determine the arm's length price of specific Controlled Transactions for a set period, offering greater certainty for material or recurring transactions.
Don't wait for an FTA enquiry to find out your file isn't ready.
Get a custom transfer pricing proposal from KGRN's specialists. Assessment, documentation and disclosure, handled end to end.