The United Arab Emirates (UAE) has introduced transfer pricing (TP) rules under the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (UAE CT Law), mandating entities operating in the UAE to maintain appropriate TP documentation. These rules apply to tax periods starting on or after 1 June 2023, ensuring transactions with related parties and connected persons are conducted in a matter that aligns with the arm’s length principles.
TP rules, which govern the pricing of transactions between related parties, have gained importance globally as jurisdictions seek to prevent profit shifting and ensure fair tax contributions. The UAE’s TP framework is designed to safeguard the integrity of the country’s tax base by ensuring that intra-group transactions are priced fairly and in line with the arm’s length principle.
To assist businesses in navigating and complying with these TP obligations, this document outlines the key elements of the UAE’s TP rules. It highlights the essential compliance requirements that entities need to follow, ensuring adherence to requirements prescribed in the UAE CT Law. Additionally, it offers practical considerations to businesses to effectively align their practices with the new standards, helping them mitigate risks and avoid potential penalties.
With TP rules in place, businesses operating in the UAE must prioritise a thorough understanding of TP requirements. Proper documentation is not only a legal requirement but also serves to substantiate that the pricing of intra-group transactions is consistent with international standards. Businesses are encouraged to familiarise themselves with the guidelines, prepare the necessary documentation and stay updated on further clarifications from the authorities to avoid potential penalties.
Please download the flyer on the right of the page.
Please reach out to your local firm’s TP specialists if you wish to discuss any of the issues outlined in our flyer.
TP rules, which govern the pricing of transactions between related parties, have gained importance globally as jurisdictions seek to prevent profit shifting and ensure fair tax contributions. The UAE’s TP framework is designed to safeguard the integrity of the country’s tax base by ensuring that intra-group transactions are priced fairly and in line with the arm’s length principle.
To assist businesses in navigating and complying with these TP obligations, this document outlines the key elements of the UAE’s TP rules. It highlights the essential compliance requirements that entities need to follow, ensuring adherence to requirements prescribed in the UAE CT Law. Additionally, it offers practical considerations to businesses to effectively align their practices with the new standards, helping them mitigate risks and avoid potential penalties.
With TP rules in place, businesses operating in the UAE must prioritise a thorough understanding of TP requirements. Proper documentation is not only a legal requirement but also serves to substantiate that the pricing of intra-group transactions is consistent with international standards. Businesses are encouraged to familiarise themselves with the guidelines, prepare the necessary documentation and stay updated on further clarifications from the authorities to avoid potential penalties.
Please download the flyer on the right of the page.
Please reach out to your local firm’s TP specialists if you wish to discuss any of the issues outlined in our flyer.