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Transfer Pricing Benchmarking Studies in the UAE

Support your UAE related party pricing with clear economic evidence before filing your Corporate Tax position.

Bestax prepares transfer pricing benchmarking studies around your actual transactions, functions, risks, and financial results. We handle transaction scoping, FAR analysis, method selection, comparable searches, financial testing, and arm's length range calculations.

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FAR Analysis Comparable Searches Arm's Length Range FTA Readiness

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Tell us which related party transactions you need supported, who the counterparties are and how they are priced today. We will confirm which transactions need economic evidence, which method fits and what the study will need from your records.

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Benchmarking Support

Transfer Pricing Benchmarking Studies for UAE Related Party Transactions

Bestax prepares transfer pricing benchmarking studies for UAE businesses dealing with Related Parties and Connected Persons. We build each study around the actual controlled transaction and its commercial terms.

Our team reviews your pricing before selecting comparables. We connect the final benchmark with your accounting records, agreements, and transfer pricing documentation.

UAE Corporate Tax rules require controlled transactions to follow the arm's length principle.

Bestax analysts working through printed comparable company figures and charts at an office desk.

Our service includes

  • Related party transaction mapping
  • Functional, asset, and risk analysis
  • Tested party selection
  • Transfer pricing method selection
  • Internal comparable review
  • External comparable searches
  • Comparable company screening
  • Accept and reject matrix preparation
  • Profit level indicator selection
  • Financial data analysis
  • Comparability adjustments
  • Arm's length range calculations
  • Interquartile range analysis
  • Local File integration
  • FTA information request support

Identify the Transactions That Need Benchmarking Support

Bestax starts by reviewing your related party ledger and existing transfer pricing arrangements. We identify transactions needing economic support before beginning a database search.

Different transactions require different methods and comparable information. We therefore assess each material transaction category separately.

Our benchmarking work commonly covers

  • Management services
  • Shared corporate services
  • IT and administrative services
  • Distribution arrangements
  • Manufacturing activities
  • Procurement services
  • Related party sales
  • Related party purchases
  • Intercompany loans
  • Guarantees
  • Royalties
  • Intellectual property arrangements
  • Cost allocation arrangements

We combine transactions only when their economic characteristics support aggregation.

Before the Search

Settle the Analysis Before Any Comparable Is Selected

The functional analysis, the tested party and the transfer pricing method are decided from the transaction itself. Each one is documented before a database search begins.

  • Complete the FAR Analysis Before Selecting Comparables

    Bestax performs a functional, asset, and risk analysis before searching for comparable companies. This establishes what each party contributes to the transaction.

    We interview relevant teams and compare written agreements with actual business conduct. The findings support the tested party and transfer pricing method.

    Our FAR analysis covers

    • Functions performed
    • Management responsibilities
    • Employees involved
    • Assets used
    • Intellectual property
    • Decision-making authority
    • Inventory responsibilities
    • Market risks
    • Credit risks
    • Foreign exchange risks
    • Product risks
    • Financing risks
    • Control over significant risks

    We document the commercial reality behind the transaction before completing the economic analysis.

  • Select the Tested Party Using UAE Transfer Pricing Rules

    Bestax selects the tested party where the chosen method works most reliably. We also consider where reliable comparable information is available.

    For CPM, RPM, and TNMM, the less complex party generally becomes the tested party. Our team documents why the selected entity fits the analysis.

    We consider

    • Complexity of functions
    • Assets used
    • Intellectual property ownership
    • Risk profile
    • Financial data availability
    • Comparable data availability
    • Transaction segmentation
    • Reliability of adjustments

    The selected tested party remains consistent throughout the benchmarking report and Local File.

  • Select the Most Appropriate Transfer Pricing Method

    Bestax chooses the transfer pricing method after reviewing the controlled transaction and FAR analysis. We do not select TNMM simply because comparable data is easier to find.

    Our working papers explain why the selected method provides the most reliable arm's length result.

    The UAE Corporate Tax Law recognises five principal methods

    • Comparable Uncontrolled Price Method
    • Resale Price Method
    • Cost Plus Method
    • Transactional Net Margin Method
    • Transactional Profit Split Method

    Where another method produces a more reliable outcome, we document the commercial and economic reasons.

The Comparable Search

Build a Comparable Search That Can Be Reproduced

Bestax checks your own third-party transactions first, searches UAE comparables before widening the market, and records the reasoning behind every company accepted or rejected.

  • Review Internal Comparables Before Using External Data

    Bestax first checks whether your business already has comparable transactions with independent parties. Reliable internal comparables can provide strong transaction-specific evidence.

    We compare controlled and uncontrolled transactions across relevant commercial conditions. Differences are documented before relying on the internal comparable.

    Our review considers

    • Products or services
    • Transaction volumes
    • Customer markets
    • Contract terms
    • Payment terms
    • Currency
    • Functions performed
    • Assets used
    • Risks assumed
    • Geographic markets

    Where internal transactions are not sufficiently comparable, we proceed with an external search.

  • Search UAE Comparables Before Expanding the Geographic Market

    Bestax follows a structured geographic search process when external comparable companies are required. We first look for reliable UAE comparables.

    Where suitable UAE data is insufficient, we expand the search to Middle East comparables. Other regions are considered when reliable regional data remains unavailable.

    Our external search process considers

    • UAE comparables
    • Middle East comparables
    • Wider geographic comparables
    • Industry classification
    • Business activities
    • Independence criteria
    • Ownership structure
    • Functional similarity
    • Financial data availability
    • Market characteristics

    The FTA does not prescribe one preferred commercial database. We focus on reliable comparability and documented search criteria.

  • Build a Defensible Comparable Company Search

    Bestax documents every stage of the comparable company search. This gives your finance team evidence behind the final benchmark.

    We screen potential comparables using commercial and financial criteria linked to the tested party.

    Our screening process reviews

    • Business descriptions
    • Industry classification
    • Geographic location
    • Independent ownership
    • Related party activity
    • Product and service mix
    • Financial information
    • Operating history
    • Persistent losses
    • Exceptional business events

    Quality matters more than collecting a large comparable set. We retain the reasoning supporting the final companies.

  • Document Every Accepted and Rejected Comparable

    Bestax prepares an accept and reject matrix for the companies reviewed during benchmarking. Each rejected company receives a documented reason.

    This creates a clear trail between the original search results and final comparable set.

    Rejection reasons can include

    • Different business functions
    • Significant intellectual property
    • Related party ownership
    • Inadequate financial information
    • Materially different products
    • Different operating models
    • Exceptional financial events
    • Unreliable financial results
    • Material functional differences

    We retain this screening record with the benchmarking working papers.

The Economic Analysis

Calculate the Range, and Adjust Only Where It Helps

The financial indicator is calculated from the accepted comparable companies and your tested result is compared against it. Adjustments are applied only where a difference materially affects comparability.

  • Lower quartile
  • Median
  • Upper quartile
  • Tested party result

For larger comparable sets, we assess an appropriate statistical range. The FTA recognises the interquartile range in suitable circumstances.

  • Calculate the Arm's Length Range for Your Transaction

    Bestax calculates the appropriate financial indicator using the accepted comparable companies. We then compare your tested result against the supported arm's length range.

    Where appropriate, we show the lower quartile, median, upper quartile, and tested party result.

    Depending on the selected method, our analysis can include

    • Operating margins
    • Net profit margins
    • Cost mark-ups
    • Resale margins
    • Return on assets
    • Interest rates
    • Royalty rates
    • Transaction prices

    We then explain whether your pricing sits within the supported arm's length range.

  • Apply Comparability Adjustments Only When They Improve Reliability

    Bestax does not apply adjustments automatically. We use them only when differences materially affect comparability.

    Every adjustment receives a calculation and documented reason. This keeps the study transparent during later review.

    Our analysis can consider

    • Accounts receivable
    • Accounts payable
    • Inventory levels
    • Working capital
    • Accounting classifications
    • Functional differences
    • Asset differences
    • Risk differences
    • Financial segmentation

    We only retain adjustments that improve the reliability of the final comparison.

By Transaction

Benchmarking Built Around the Transaction in Front of Us

Different transactions require different methods and comparable information, so each material category is tested on its own terms.

  • Benchmark Management and Shared Service Charges

    Bestax benchmarks intra-group management and support services using the actual services provided. We review the cost base, benefit received, and pricing approach.

    Our team checks whether the service charge matches the documented commercial arrangement.

    We review

    • Service descriptions
    • Employees providing services
    • Recipient entities
    • Cost pools
    • Allocation keys
    • Existing mark-ups
    • Intercompany agreements
    • Supporting invoices
    • Benefit evidence
    • Accounting entries

    We then determine the transfer pricing method and economic support required for the arrangement.

  • Benchmark UAE Distribution and Trading Margins

    Bestax benchmarks UAE distributors dealing with Related Parties for goods or products. We test whether the UAE entity earns an arm's length return.

    The analysis starts with the distributor's real functions and risks. We then identify independent businesses with sufficiently comparable operating models.

    Our review covers

    • Products distributed
    • Sales responsibilities
    • Customer relationships
    • Marketing functions
    • Inventory ownership
    • Warehousing
    • Warranty responsibilities
    • Credit risks
    • Employees
    • Operating expenses

    We connect the supported margin with the pricing recorded in your accounts.

  • Benchmark Intercompany Loans and Financing Arrangements

    Bestax prepares benchmarking studies for related party loans and other financing arrangements. We assess more than the stated interest rate.

    Our team reviews the borrower, lender, financing terms, and market conditions before identifying comparable pricing.

    Our analysis includes

    • Principal amount
    • Currency
    • Loan duration
    • Repayment schedule
    • Fixed or floating rate
    • Security
    • Guarantees
    • Borrower credit profile
    • Lender functions
    • Group support
    • Market conditions

    We document the supported interest rate or arm's length range within the final report.

  • Benchmark Royalties and Intellectual Property Charges

    Bestax reviews royalties involving trademarks, technology, software, know-how, and other intellectual property. We first establish which commercial rights are being provided.

    The benchmarking approach then reflects the asset, rights, territory, and economic contribution.

    Our review considers

    • Intellectual property type
    • Legal ownership
    • Commercial rights
    • Territory
    • Exclusivity
    • Agreement duration
    • Revenue base
    • Functions performed
    • Development activities
    • Market value drivers

    We connect the economic analysis with the underlying licence or royalty agreement.

  • Support Free Zone Transfer Pricing With Benchmarking Evidence

    Bestax prepares benchmarking support for UAE free zone businesses entering controlled transactions. Free zone status does not remove the arm's length requirement.

    We review the economic analysis alongside the entity's Corporate Tax position and existing transfer pricing documentation.

    Our service can cover

    • Foreign Related Party transactions
    • Mainland Related Party transactions
    • Intra-group services
    • Financing
    • Distribution
    • Manufacturing
    • Intellectual property
    • Cost allocations

    We keep the benchmark aligned with your Corporate Tax reporting and wider free zone compliance position.

After the Study

Keep the Study Consistent, Current and FTA-Ready

A benchmarking study has to agree with your Local File and your Corporate Tax records, stay current as the business changes, and still be retrievable years later.

  • Full search update

    Three years

    FTA guidance states that a comparable search should receive a full update every three years. Financial information requires annual updating during the interim years.

  • Standard FTA response period

    30 days

    Under UAE Corporate Tax rules, the FTA can request information supporting arm's length pricing. The standard response period is 30 days after the request.

  • Record retention

    Seven years

    UAE Corporate Tax rules generally require relevant records for seven years after the applicable Tax Period.

  • Connect Your Benchmarking Study With the Local File

    Bestax integrates benchmarking results with your Local File when formal transfer pricing documentation applies. The financial and economic analysis must tell the same story.

    Businesses meeting UAE documentation thresholds also require the applicable Master File and Local File framework.

    Our team reconciles

    • Tested party
    • Controlled transactions
    • Transaction values
    • Transfer pricing method
    • Profit level indicator
    • Comparable company results
    • Arm's length range
    • Intercompany agreements
    • Financial statements
    • Corporate Tax information

    For complete documentation support, Bestax also provides Master and Local File preparation services.

  • Reconcile Benchmarking Results With Your Corporate Tax Records

    Bestax compares the benchmarking study with the financial information behind your Corporate Tax return. We identify differences before documentation receives final approval.

    Our reconciliation can include

    • Related party revenue
    • Related party expenses
    • Service charges
    • Financing income
    • Financing expenses
    • Royalty payments
    • Tested party financial results
    • Local File values
    • General ledger balances
    • Corporate Tax disclosures

    This prevents one transaction from appearing differently across accounting, tax, and transfer pricing records.

  • Refresh Your Benchmarking Study Under the FTA Three-Year Approach

    Bestax reviews the study every relevant Tax Period before reusing earlier comparable information. FTA guidance states that a comparable search should receive a full update every three years, with financial information updated annually during the interim years.

    We also assess whether business changes require an earlier full search.

    Our annual review covers

    • New Related Parties
    • New transactions
    • Business model changes
    • Functional changes
    • Risk changes
    • Market changes
    • Pricing changes
    • Group restructuring
    • Material financial changes
    • Updated comparable results

    A materially changed controlled transaction should not rely automatically on an old comparable search.

  • Prepare Benchmarking Evidence Before an FTA Request

    Bestax keeps your economic analysis organised before the FTA asks for supporting information. We retain the methodology and financial evidence behind each conclusion.

    We organise the final pack so your finance team can retrieve the evidence quickly.

    Our FTA readiness pack can include

    • FAR analysis
    • Method selection paper
    • Comparable search strategy
    • Database search output
    • Accept and reject matrix
    • Comparable company profiles
    • Financial calculations
    • Comparability adjustments
    • Arm's length range
    • Intercompany agreements
    • Accounting reconciliations
    • Supporting workpapers

    Review the official FTA Transfer Pricing Guide (opens in a new tab) for the UAE transfer pricing framework.

  • Keep Benchmarking Records for the Required Seven-Year Period

    Bestax organises your completed benchmarking study and supporting workpapers for long-term record retention.

    UAE Corporate Tax rules generally require relevant records for seven years after the applicable Tax Period.

    We help organise

    • Final benchmarking report
    • Database search results
    • Accept and reject matrix
    • FAR analysis
    • Financial calculations
    • Comparable company information
    • Intercompany agreements
    • Accounting reconciliations
    • Supporting correspondence
    • Local File references

    This gives your business a consistent record if the FTA later reviews an earlier Tax Period.

How It Runs

Bestax Transfer Pricing Benchmarking Studies Process

Bestax follows a structured process so every conclusion connects with the transaction and financial evidence.

  1. We Identify the Controlled Transaction

    We review the counterparties, transaction type, value, agreements, and current pricing approach.

  2. We Complete the FAR Analysis

    Our team documents functions, assets, risks, and decision-making responsibilities for the relevant parties.

  3. We Select the Tested Party

    We identify where the chosen method applies most reliably and where suitable comparable data exists.

  4. We Select the Transfer Pricing Method

    We choose the method that provides the most reliable arm's length result for the transaction.

  5. We Review Internal Comparables

    Bestax checks existing third-party transactions before conducting an external comparable search.

  6. We Search External Comparables

    We start with UAE comparables before expanding to the Middle East and wider geographic markets.

  7. We Screen Every Potential Comparable

    Our team prepares an accept and reject matrix showing the reasoning behind the final set.

  8. We Complete the Financial Analysis

    We calculate the selected financial indicator and apply justified comparability adjustments.

  9. We Calculate the Arm's Length Range

    Bestax compares your tested result against the supported range and documents the conclusion.

  10. We Deliver the Final Benchmarking Report

    You receive the analysis, search results, calculations, conclusions, and supporting schedules.

What Bestax Delivers With Your Benchmarking Study

Your engagement produces a practical transfer pricing evidence pack. The exact deliverables depend on the transaction and selected method.

Your final package can include

  • Transaction scope summary
  • Functional analysis
  • Tested party rationale
  • Transfer pricing method analysis
  • Internal comparable assessment
  • External search strategy
  • Database search output
  • Accept and reject matrix
  • Final comparable company set
  • Financial analysis
  • Comparability adjustments
  • Arm's length range
  • Interquartile range
  • Pricing conclusion
  • Local File support schedules
  • FTA-ready working papers

We also explain the result to your finance team before finalisation.

Why Bestax

Why Choose Bestax for Transfer Pricing Benchmarking Studies?

Bestax combines transfer pricing, Corporate Tax, accounting, and FTA support within one UAE team. Your benchmark stays connected with the financial records behind your tax position.

We focus on supportable economic evidence instead of choosing a convenient margin. Every major assumption, comparable, adjustment, and conclusion receives documented support.

For more detail, read our guide on benchmarking studies for transfer pricing in the UAE. You can also review the current UAE Corporate Tax Law (opens in a new tab) supporting the arm's length principle.

Clients choose Bestax for

  • FTA Approved Tax Agent support
  • UAE transfer pricing expertise
  • UAE-first comparable searches
  • Transaction-specific benchmarking
  • FAR analysis
  • Tested party selection
  • Transfer pricing method analysis
  • Comparable company screening
  • Financing benchmarking
  • Service fee benchmarking
  • Free zone support
  • Local File integration
  • FTA response support
  • Annual benchmark updates

Other Transfer Pricing and Corporate Tax Services

The benchmarking study is one part of a transfer pricing position. Here is the rest of it, from the same team.

See All Services

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