Corporate Tax has not turned every valuation into a tax exercise. It has, however, created several situations in which businesses must determine value, pricing or tax basis under different regulatory frameworks.

A real estate developer calculating the gain attributable to the period before Corporate Tax is applying the transitional rules for qualifying immovable property. A group pricing an intercompany service is applying transfer pricing rules. A shareholder preparing for a sale is commissioning an independent business valuation.

These exercises are connected by the concept of value, but they are not interchangeable. Each has a different purpose, methodology, documentation requirement and regulatory authority.

This guide explains the principal developments affecting property valuation, investment property depreciation, transfer pricing, Advance Pricing Agreements and independent business valuation in the UAE.

1. Property Valuation Under the Corporate Tax Transitional Rules

The Federal Tax Authority issued Public Clarification CTP009 on 26 September 2025. It explains how a real estate developer that is a Taxable Person should apply the valuation method under Ministerial Decision No. 120 of 2023 when disposing of Qualifying Immovable Property.

The transitional rules are designed to exclude qualifying gains attributable to the period before the first Corporate Tax period. CTP009 focuses specifically on the valuation method for real estate developers.

What can qualify as immovable property?

Eligibility depends on the conditions in Ministerial Decision No. 120 of 2023. The property must have been owned before the first Tax Period, measured on a historical cost basis in the financial statements, and disposed of or deemed disposed of during or after the first Tax Period.

For a real estate developer, the qualifying property can differ according to the stage of development:

• Where only land was owned before the first Tax Period and construction began later, the qualifying property is limited to the land element.
• Where construction began before the first Tax Period and continued afterwards, the qualifying property can include the land and the project under construction.
• Where a completed project or completed units were owned before the first Tax Period, the relevant completed property may qualify, subject to the statutory conditions.

How the valuation method works

CTP009 sets out a four-step application:

•  Calculate the excluded gain by deducting the higher of original cost or net book value from the market value at the beginning of the first Tax Period.
• Allocate the excluded gain across the relevant Tax Periods in line with the revenue recognised for the qualifying property.
•  Identify the accounting profit attributable to that property for each relevant Tax Period on a fair and reasonable basis.
• Apply the available excluded gain against that accounting profit. The adjustment cannot create or increase an accounting loss, and unused amounts cannot be carried forward.

2. Tax Depreciation for Investment Property Held at Fair Value

In July 2025, the Ministry of Finance issued Ministerial Decision No. 173 of 2025 on Depreciation Adjustments for Investment Properties held at Fair Value, allowing eligible taxpayers to elect a tax depreciation deduction for investment properties measured using the fair value model.

The measure applies to taxpayers that use the accrual basis of accounting and elect the realisation basis for gains and losses. The tax depreciation election is irrevocable, is made in the first Tax Period beginning on or after 1 January 2025 in which the taxpayer holds an investment property, and applies to all investment properties going forward.

Amount of the deduction: 

For each 12-month Tax Period, the available deduction is the lower of:

• 4% of the original cost of the investment property; or
• The tax written-down value of the investment property at the beginning of the Tax Period.

The deduction is prorated where the relevant holding period is shorter or longer than 12 months. The decision also provides an exceptional opportunity for eligible taxpayers to make the realisation-basis election where the ordinary deadline had already passed.

The accounting and deferred-tax consequences must be assessed based on the taxpayer’s specific carrying values, tax bases and applicable accounting standards. They should not be assumed to be identical for every property.

3. Transfer Pricing: Determining Arm’s Length Prices

Transfer pricing addresses a different question from business or property valuation. It determines the conditions and price that would have applied to a transaction or arrangement between independent parties.

The UAE transfer pricing rules apply to transactions or arrangements between Related Parties and Connected Persons. The arm’s length principle applies regardless of whether the transaction crosses a disclosure or documentation threshold.

Corporate Tax return disclosure thresholds:

• The Related Party transactions schedule is triggered where the aggregate value of transactions with all Related Parties exceeds AED 40 million for the Tax Period.
• Once the AED 40 million threshold is exceeded, a transaction category must be disclosed where its aggregate value with all Related Parties exceeds AED 4 million.
• Dividends declared between Related Parties are excluded when determining the AED 40 million and AED 4 million thresholds.
• The Connected Persons schedule applies where aggregate transactions with Connected Persons, including their Related Parties, exceed AED 500,000. It is completed for each Connected Person where the aggregate payment or benefit exceeds AED 500,000.

Master File and Local File thresholds

Under Ministerial Decision No. 97 of 2023, a Taxable Person must maintain both a Master File and a Local File where either:

• It is a Constituent Company of a Multinational Enterprises Group with consolidated group revenue of at least AED 3.15 billion in the relevant Tax Period; or
• The Taxable Person’s own revenue is at least AED 200 million in the relevant Tax Period.

The documentation must be maintained contemporaneously. Where requested, it must generally be provided to the FTA within 30 days, unless the FTA agrees to a longer period.

Country-by-Country Reporting

Country-by-Country Reporting is a separate obligation under Cabinet Resolution No. 44 of 2020 for qualifying multinational groups with consolidated group revenue of at least AED 3.15 billion in the immediately preceding fiscal year. Its application depends on the group’s reporting position and the requirements of that resolution.

4. The UAE Advance Pricing Agreement Regime

The FTA issued Corporate Tax Guide CTGAPA1 on Advance Pricing Agreements on 31 December 2025. Pre-filing consultations, APA applications and related information could be submitted from 30 December 2025.

An APA establishes in advance the criteria for determining the arm’s length price of specified Controlled Transactions for a fixed period. It does not value an entire business.

Types of APA

• Unilateral APA: an agreement between the taxpayer and the FTA. It can address domestic or cross-border Controlled Transactions, although the programme began with domestic applications.
• Bilateral APA: an agreement reached between the competent authorities of two jurisdictions through the mutual agreement procedure.
• Multilateral APA: a set of agreements between the competent authorities of more than two jurisdictions.

The FTA accepted domestic UAPA applications from December 2025. The guide states that the commencement date for cross-border UAPA applications would be announced in 2026. BAPAs and MAPAs are to be introduced through a phased expansion, with additional guidance and application dates to be announced.

Independent Business Valuation, Still Its Own Discipline 

Separate from both of the above, traditional business valuation continues for its original purposes: mergers and acquisitions, shareholder disputes, fundraising, and impairment testing. 

The Corporate Tax overlay here is more indirect a filed, reconciled Corporate Tax position is increasingly something buyers check during diligence, and unresolved discrepancies between management accounts and FTA filings surface exactly when a deal is in progress. But the valuation itself still follows standard methodologies (income, market, and asset approaches), and critically should always be performed independently of the company’s own auditor to avoid a conflict of interest.