United Arab EmiratesUnited Arab Emirates

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

There is currently no explicit reference to the OECD Guidelines in UAE Corporate Tax Legislation, but UAE transfer pricing guidance does refer to the 2022 Transfer Pricing Guidelines which acts as an interpretation of the arm’s length standard for UAE Corporate Tax purposes.

Legal ReferenceUAE Corporate Tax Law Federal Decree Law No. 47

Related Parties are defined in Article 35 of the UAE Corporate Tax Law. Related parties are defined as any of the following: a) Two or more natural persons who are related within the fourth degree of kinship or affiliation, including by way of adoption or guardianship. b) A natural person and a juridical person where: 1. the natural person or one or more Related Parties of the natural person are shareholders in the juridical person, and the natural person, alone or together with its Related Parties, directly or indirectly owns a 50% (fifty percent) or greater ownership interest in the juridical person; or 2. the natural person, alone or together with its Related Parties, directly or indirectly Controls the juridical person. c) Two or more juridical persons where: 1. one juridical person, alone or together with its Related Parties, directly or indirectly owns a 50% (fifty percent) or greater ownership interest in the other juridical person; 2. one juridical person, alone or together with its Related Parties, directly or indirectly Controls the other juridical person; or 3. any Person, alone or together with its Related Parties, directly or indirectly owns a 50% (fifty percent) or greater ownership interest in or Controls such two or more juridical persons; d) A Person and its Permanent Establishment or Foreign Permanent Establishment e) Two or more Persons that are partners in the same Unincorporated Partnership f) A Person who is the trustee, founder, settlor or beneficiary of a trust or foundation. “Control” means the ability of a Person, whether in their own right or by agreement or otherwise to influence another Person, including: a) The ability to exercise 50% (fifty percent) or more of the voting rights of another Person. b) The ability to determine the composition of 50% (fifty percent) or more of the Board of directors of another Person. c) The ability to receive 50% (fifty percent) or more of the profits of another Person. d) The ability to determine, or exercise significant influence over, the conduct of the Business and affairs of another Person.

Legal ReferenceUAE Corporate Tax Law Federal Decree Law No. 47

Any Other Method is permitted to be used if the taxpayer can demonstrate that none of the five OECD recognised methods (i.e. CUP, RPM, Cost Plus, TNMM and Profit Split) can be reasonably applied to determine an arm’s length result and that it provides for the same result that would have occurred had the transaction occurred between independent parties.

• CUP (provided)
• Resale Price (provided)
• Cost Plus (provided)
• TNMM (provided)
• Profit Split (provided)
• Other (provided)

Most appropriate method

• Hierarchy of methods (not selected)
• Most appropriate method (selected)

For controlled transactions involving commodities, the guidance contained in paragraphs 2.18-2.22 of the TPG is followed.

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

There is preference for domestic comparables but if these are not available, regional/global comparables may be accepted.

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

Comparability adjustments are required if it enhances the reliability and comparability of the selected comparables.

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

The UAE transfer pricing guidance broadly aligns with Chapter VI of the OECD Transfer Pricing Guidelines.

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

There is no specific guidance in UAE law or guidance on the treatment of hard-to-value intangibles, but Chapter VI of the OECD Transfer Pricing Guidelines would be the framework adopted.

There is currently not a live APA program in the UAE.

The UAE has hired personnel from mature tax jurisdictions to upskill tax policy and administration team members and ensure that OECD transfer pricing principles will be exercised in guidance provided or tax assessments performed.

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

The UAE Corporate Tax law has implemented BEPS Action 4 and therefore interest deductions are limited, largely in line with the provisions of the BEPS Action 4 requirements.

Legal ReferenceFederal Tax Authority Transfer Pricing Guide

Yes, the domestic transfer pricing framework follows (or largely follows) the guidance in Chapter VIII of the TPG.

Legal ReferenceMinisterial Decision No. 97 of 2023 Requirements for Maintaining Transfer Pricing Documentation; Federal Tax Authority Transfer Pricing Guide

• Master file consistent with Annex I to Chapter V of the TPG (selected)
• Local file consistent with Annex II to Chapter V of the TPG (selected)
• Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
• Specific transfer pricing returns (separate or annexed to the tax return) (selected)

The Master File and Local File are not required to be submitted but may be requested by the Federal Tax Authority, in which case such documentation should be provided within 30 days. The Files may be in English and/or Arabic. Broadly speaking, taxpayers must maintain both Master File and Local file if they either are a) a constituent entity of a MNE that has total consolidated group revenues of 3.15 billion UAE Dirhams (AED) in a Tax Period; or b) the taxpayer has revenue in a Tax period of AED 200 million or more. The CbC report must be prepared by all MNE groups headquartered in the UAE that have consolidated group revenue in the preceding year equal to or above AED 3.15 billion (approx. EUR 750 million). The Ultimate Parent Entity will be required to file the CbC report no later than 12 months after the last day of each reporting year of the MNE Group in the UAE. The Corporate Tax Return also requires taxpayers to file a TP disclosure form disclosing all transactions with related parties (as defined in Article 35 of the UAE Corporate Tax Law) where the aggregate amount exceeds AED 40 million. Separately, payments to connected persons (as defined under Article 36) must also be disclosed, as part of the disclosure, if the aggregate payment/benefit exceeds AED 500 000.

There are no specific transfer pricing penalties in the UAE tax legislation. However, the applicable Corporate Tax penalties (outlined in Cabinet Decision No. 75 of 2023) would apply such that, for example, penalties for not maintaining appropriate records and information would be applicable for not maintaining appropriate transfer pricing records for related party transactions.

Taxpayers that fall below the thresholds above are not required to maintain a Master File or Local File but must maintain records to support the arm’s length nature of its related party transactions or payments to Connected Persons.

Legal ReferenceUAE's MAP Profile

Tax rulings are available to provide a transfer pricing position (not a unilateral APA) on related party transactions. The MAP procedure is also available for taxpayers and MAP guidance is provided for on the website of the UAE Ministry of Finance.

• Rulings (selected)
• Enhanced engagement or cooperative compliance programmes (not selected)
• Advance Pricing Agreements (APA) (not selected)
• International Compliance Assurance Programme (ICAP) (not selected)
• Mutual Agreement Procedures (selected)

No position has yet been taken on the adoption of Amount B.

• N/A (selected)

• N/A (selected)

The UAE is committed to the political commitment on Amount B, as a member of the Inclusive Framework, subject to the required domestic legal and administrative protocols being fulfilled.

Whilst not directly related to transfer pricing, the UAE has a Small Business Relief regime whereby companies with total revenues of less than AED 3 million (approx. USD 800 000) in each financial year prior to 2027 can benefit from Small Business Relief where a simplified tax return is required and no taxable income is deemed to arise. Such entities are also exempt from transfer pricing documentation requirements.

Yes, these can be undertaken as part of the self-assessment tax return.

The UAE has a large tax treaty network which contain treaties signed across the past thirty years and, as such, there are a variety of Article 7 provisions across these treaties, some of which follow the OECD Model and some follow the UN Model.

• Article 7 as it read before 2010. (not selected)
• Article 7 as it reads after 2010. (not selected)
• Other (please provide additional details) (selected)

The AOA is not adopted in domestic corporate tax law and thus the approach to profit attribution of permanent establishments would be reliant on the relevant tax treaty provisions.

An APA program is expected to be released during the course of 2026.