Updates To UAE Transfer Pricing Documentation


New updates related to Transfer Pricing under the UAE Corporate Tax regime have been issued by the UAE Ministry of Finance, with the Ministerial Decision No (97) of 2023 relating to the maintaining of transfer pricing documentation.

The decision specifies instances where taxpayers must maintain transfer pricing documentation, specifically a master file and a local file, if they have revenues in a relevant tax period of at least Dh200 million (@US$55.5 million) or if they are part of a multinational group with a total consolidated group revenue of at least Dh3.15 billion in the relevant tax period.

The decision outlines the transactions or arrangements that will be included in the local file. The Federal Decree Law No (47) of 2023 enforces transfer pricing rules and documentation requirements to ensure the pricing of transactions between related parties and connected persons – such as companies that are part of the same multinational enterprise – are not influenced by their relationships.

Younis Haji Al Khouri, Undersecretary of the Ministry of Finance, has stated that the new rulings require that “Transfer pricing documentation requirements must prove the arm’s length basis for pricing their transactions with related parties and connected persons using standardized files.

Additionally, to reduce the compliance burden on taxpayers, the Decision defines the threshold for preparing master files and local files and the exclusions for disclosing certain transactions.”

The transfer pricing documentation requirements will help ease compliance burdens for SMEs.

For further clarification on transfer pricing and corporate tax and establishment issues in the UAE please contact Maria Kotova at dubai@dezshira.com

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