If your company trades with related parties, pays its owners, or sits inside a group, corporate tax has put a price tag on getting those transactions wrong. Bestax handles transfer pricing in the UAE end to end: we work out which rules apply to you, prepare the disclosure forms and files the FTA expects, run the benchmarking that proves your prices are fair, and defend the whole position if the FTA asks questions.
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30 Sep 2026
Disclosure form deadline
Your transfer pricing disclosure form travels with your corporate tax return, due nine months after your financial year ends. For a year ended 31 December 2025, that means 30 September 2026.
30 days
To produce Master and Local Files
If the FTA requests your Master File or Local File, you have 30 days to produce them. They cannot be built well in 30 days, only handed over.
AED 30,000
Advance pricing agreement fee
The UAE opened its unilateral advance pricing agreement programme under FTA Decision No. 2 of 2026: application fee AED 30,000, covering 3 to 5 tax periods, currently for domestic transactions of AED 100 million or more per tax period.
15%
Minimum top-up tax
Large groups with global revenue of EUR 750 million or more now also face the 15 percent minimum top-up tax, which makes defensible intercompany pricing even more valuable.
Not sure which of these touches your business? Send us your structure chart and last financial statements and we will map your exact obligations at no cost.
Book Free 20-Min CallTransfer pricing is the price one part of a business charges another part of the same business, or a party connected to it. A Dubai trading company buying stock from its parent in Europe, a free zone entity charging management fees to its mainland sister, a shareholder lending money to his own company, a director drawing a salary: all of these are transactions where nobody negotiated at arm's length, because both sides answer to the same people.
The corporate tax law requires these transactions to be priced as if they had happened between independent businesses. That is the arm's length principle, and it exists because related party prices can move profit from a 9 percent entity into a 0 percent entity without any real business changing hands. A mainland company paying an inflated fee to a free zone affiliate shrinks its own taxable profit and parks the income where tax may not apply. The FTA knows every version of this pattern, and your tax return now asks direct questions about it.
Here is the practical point most businesses miss: this is not only a multinational issue. Two UAE companies with the same owner are related parties. A company and its majority shareholder are related parties. If money, goods, services, loans or assets move between them, the arm's length rule already applies to you.
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The rules come from a small set of sources, and knowing them tells you exactly what the FTA can ask of you. The rules sit inside the Corporate Tax Law, Federal Decree-Law No. 47 of 2022: Article 34 sets the arm's length principle, Article 35 defines related parties, Article 36 governs payments to connected persons and Article 55 creates the documentation duties. Ministerial Decision No. 97 of 2023 sets the documentation thresholds, and the FTA's Transfer Pricing Guide explains how the authority interprets it all, closely following the OECD Transfer Pricing Guidelines.
A few definitions do most of the work.
Related parties include companies linked by 50 percent or more ownership or control, individuals related up to the fourth degree of kinship, a company and its permanent establishment, and partners in the same unincorporated partnership.
Connected persons are your company's owners, its directors and officers, and their related parties. Payments to them, salaries included, must reflect market value and pass a business purpose test to stay deductible.
The arm's length range comes from the law's five recognised pricing methods: comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split, with other methods allowed where none of the five fits. If your price falls outside the arm's length range, the FTA can adjust it, and its guide states the adjustment is made to the median of the range.
One more rule with teeth: if the FTA adjusts your price upward, the extra profit is taxed, and the general penalty regime applies on top. Getting the price right the first time is always the cheaper path.
The law recognises five ways to prove a price is arm's length, all drawn from OECD practice. You do not need to memorise them, but knowing roughly how they work makes every conversation about your pricing shorter.
The law also permits another method where none of the five fits, provided you can justify it. Choosing the method is not a formality: the FTA's guide expects the most appropriate method for the facts, and a benchmarking study built on the wrong method defends the wrong number. Method selection is the first page of every study we prepare.
Find the same product or service sold between independent parties and use that price. The cleanest method when a true comparable exists, which for commodities, licence fees and loan interest it often does.
Start from the price your related distributor resells at, subtract the margin an independent distributor would keep, and what remains is the arm's length purchase price. Built for distribution businesses.
Take the supplier's costs and add the markup an independent supplier would earn. The natural fit for intercompany services and contract manufacturing.
Compare the net margin your entity earns on the transaction with the net margins of comparable independent companies. The workhorse of UAE compliance, because reliable net margin data is far easier to find in databases than transaction level prices.
Where two related parties truly create value together, split the combined profit the way independent partners would have. Reserved for integrated operations and unique intangibles.
Three types of transaction produce most UAE adjustment risk, and each has its own logic.
A shareholder or group company lends money at zero interest, or at a rate someone chose in a meeting. Arm's length requires the rate an independent lender would charge that borrower, evidenced by credit rating analysis and loan benchmarking. The result then interacts with the corporate tax interest deduction cap, which limits net interest deductions for larger borrowers to 30 percent of adjusted earnings, so pricing a loan correctly is both a transfer pricing and a deductibility exercise.
The FTA's questions are always the same three: was a real service performed, did the recipient benefit, and is the charge what an independent provider would have billed? A fee that exists mainly to move profit fails all three. We document the service, the benefit and the markup, usually on a cost plus basis, so the fee survives each question.
Buying stock from a related supplier above market, or selling to a related distributor below it, shifts margin across the group with every shipment. Because volumes repeat, small pricing errors compound into large adjustments. Annual margin testing against benchmarked ranges catches the drift early.
If one of these flows runs through your group today without written terms and a tested price, it is the first thing to fix.
Transfer pricing obligations stack by size. Find your row and you know your workload.
| Your situation | What you must do |
|---|---|
| Every taxable person with related party or connected person dealings | Price them at arm's length and keep records that prove it. This applies with no minimum threshold |
| Related party transactions above AED 40 million in the tax period | File the transfer pricing disclosure form with your corporate tax return, detailing each transaction category above AED 4 million |
| Payments or benefits to a connected person above AED 500,000 | Disclose them on the connected persons schedule and be ready to prove market value |
| Revenue of AED 200 million or more, or membership of a multinational group with consolidated global revenue of AED 3.15 billion or more | Maintain a Master File and a Local File, ready for submission within 30 days of an FTA request |
| UAE headquartered multinational group with consolidated revenue of AED 3.15 billion or more | File the Country by Country Report and notification |
| Qualifying free zone person claiming the 0 percent rate | Full arm's length compliance and transfer pricing documentation as a condition of the rate, whatever your size |
| Business electing Small Business Relief (revenue AED 3 million or below, periods ending on or before 31 December 2029) | Relieved from transfer pricing documentation, though dealings should still be priced sensibly at market value |
Source: Federal Decree-Law No. 47 of 2022, Ministerial Decision No. 97 of 2023 and FTA guidance. We review this table monthly and update it when the rules change.
Transfer pricing documentation in the UAE comes in four layers, and most businesses only need some of them. Here is what each one is, in plain terms.
The trap in all of this is sequencing. The disclosure form is filed with your return, but the files behind it must exist before the FTA's 30 day request window ever opens. Documentation built after a request arrives reads exactly like what it is.
A schedule inside your corporate tax return listing related party and connected person transactions, their categories, values and pricing methods. It looks like an administrative form. It is actually a risk screen: the FTA compares what you disclose against your financials, and mismatches invite questions. It must be consistent with your books, your VAT filings and your audited statements.
The detailed defence of your UAE entity's transactions: what was transacted with whom, the functions, assets and risks on each side, the method chosen and the benchmarking that supports the price. Certain transactions are excluded, such as dealings with other UAE residents taxed at the same 9 percent rate, which is a relief worth checking because it can shrink the file substantially.
The group level picture: structure, business lines, where the intangibles sit, how financing flows and the group's overall transfer pricing policy. Multinational groups usually adapt a global Master File; we localise it so it matches what the UAE entities actually disclose.
For UAE headquartered groups above AED 3.15 billion in consolidated revenue: a jurisdiction by jurisdiction breakdown of revenue, profit, tax and substance, filed within 12 months of the year end.
A policy without data is an opinion. Benchmarking is how an opinion becomes evidence: a study that finds what independent companies charge for comparable transactions, and shows your price sitting inside that range.
Our benchmarking process runs in four steps.
What each party to the transaction actually does, which assets it uses and which risks it carries, because a distributor that holds inventory risk deserves a different margin from one that does not.
We screen commercial databases of company financials and licence agreements for truly comparable independent transactions, applying regional filters relevant to the Gulf.
Comparables are tested and adjusted so the final set stands up to scrutiny, and an arm's length range is computed from it.
Your price is placed against the range, and if it falls outside, we tell you before the FTA does, while there is still time to fix the pricing or the documentation.
Comparables data moves with the economy, and a study should be refreshed regularly, with the FTA and OECD practice pointing to a full refresh at least every three years and financial updates in between.
Intercompany loans need interest rate benchmarking, and salaries paid to owners and directors above AED 500,000 need market pay evidence to stay fully deductible.
Every engagement is run by our tax team and reviewed at senior level before anything is filed or handed to the FTA. Our support covers the full compliance cycle.
The businesses that sit in our meeting rooms are rarely the giant multinationals people associate with this topic. The profile of transfer pricing in Dubai looks much more local.
A qualifying free zone person must meet transfer pricing requirements as a condition of the 0 percent rate, at any size. Pricing between your free zone and mainland entities is the single most examined flow, because it is exactly where profit could migrate between a 9 percent and a 0 percent rate.
Several companies, one family, constant movement of money, goods and staff between them, usually with no agreements and no consistent pricing. This is the most common gap we fix, and the connected persons rules reach the family salaries too.
Shareholder loans with no interest, or interest set by feel, create both transfer pricing exposure and interest deduction issues. Loan benchmarking settles them.
Group policies exist, but the UAE entity still needs its own disclosure, its own Local File view and pricing that survives contact with UAE thresholds, the FTA's guide and, for the largest groups, the 15 percent top-up tax.
Head office charges, shared services and licence fees between entities need evidence that the service was real and the price was market. Undocumented management fees are the easiest adjustment an auditor will ever make.
From our Business Bay office we work with groups across Dubai and every emirate, in person or fully remote.
If any of these sounds familiar, the fix costs less than the adjustment.
It is filed under penalty of accuracy and it is compared against your financial statements. Numbers assembled in a hurry become audit questions a year later.
Money moves monthly between sister companies with nothing in writing. When the FTA asks what the payment was for, an invoice that says “management fee” is not an answer.
Interest free related party lending has arm's length consequences in both directions, and it interacts with the corporate tax interest cap rules. It needs pricing, not silence.
A connected person salary above AED 500,000 that no independent company would pay for the same role puts the excess deduction at risk.
A Master File written for another jurisdiction, unadjusted, routinely contradicts the UAE disclosure form. Auditors read both.
Thirty days is enough time to print a file, not to create one. The businesses that pass reviews are the ones that were ready before the letter.
Most businesses meet these rules for the first time in the months before a corporate tax return is due. Here is the sequence that works, using a December year end as the example.
With those five items, the free assessment takes one meeting.
Map related parties and connected persons, put intercompany agreements in writing and set the pricing policy. Fixing prices while the year is still open is planning; fixing them after year end is a disclosure problem.
Run or refresh the benchmarking. If the study shows a flow drifting outside the arm's length range, there is still time to correct invoicing before the year closes.
Close the books with intercompany balances reconciled across all entities, because the disclosure form will be compared against audited numbers.
Prepare the Local File and Master File if you are in scope, complete the disclosure form and file it with the return by the deadline, which for a 31 December 2025 year end is 30 September 2026.
Update the comparables data, refresh agreements when flows change and retest prices. Compliance done in this order costs a fraction of compliance done in a September panic, and it shows: files built through the year read like records, files built in the filing month read like defence.
A 30 minute consultation on your structure and transactions. You leave knowing which obligations apply to you, whether you engage us or not.
A written scope and price covering exactly the deliverables you need. Work starts after you approve it.
We do the functional analysis, run the searches and set or test the pricing.
Disclosure form entries reconciled to your accounts, files ready for the 30 day window, agreements in place, policy documented.
Each year we refresh what needs refreshing, and if the FTA calls, the same team that built the file defends it.
We provide a full range of business and tax solutions to help you set up, stay compliant, and grow in the UAE.
Bookkeeping, IFRS reporting, payroll and audit-ready files, on a fixed monthly fee with a dedicated accountant.
Annual UAE corporate tax return preparation and filing by an FTA-approved tax agency: figures prepared, every relief claimed, filed through EmaraTax on time.
Corporate tax, VAT, transfer pricing and FTA audit support from an FTA registered tax agency, on fixed fees agreed in writing.
Chartered accountant led bookkeeping from Business Bay: transactions recorded, accounts reconciled and books closed every month at a fixed fee.
VAT registration handled end to end by an FTA-approved tax agency: eligibility check, document preparation, EmaraTax application and TRN follow-up.
Trade licences, paperwork and visas for mainland and free zone companies, so you start operating sooner.
An FTA registered tax agency with registered tax agents, numbers published: TAAN 30008692, TAN 20052643. The people who prepare your file can legally defend it.
Our corporate tax return preparers, tax consultants, accounting and bookkeeping teams work from the same records, so your disclosure form, your return and your financial statements never disagree with each other.
You get conclusions and numbers you can act on, not a binder of theory.
Agreed in writing before work begins, sized to your actual obligations rather than a template.
10+ years in the UAE, 35+ professionals, more than 1,000 clients and a 4.8 out of 5 rating from over 200 Google reviews.
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If your question is not here, ask it directly.
Yes. The transfer pricing regulations in the UAE apply to domestic transactions as much as cross border ones. Two local companies with the same owner, a company and its shareholder, a mainland entity and its free zone sister: all are related parties, and the arm's length principle applies to everything that moves between them.
The form is required once your related party transactions exceed AED 40 million in aggregate for the tax period, with each category above AED 4 million reported separately. Payments or benefits above AED 500,000 to a connected person, such as an owner or director, are disclosed on their own schedule. We confirm your exact position as part of the free assessment.
Not quite. The thresholds decide what you must file and maintain, but the arm's length principle itself applies to every taxable person, with no minimum. If the FTA reviews your return, it can still adjust a non arm's length price. Below the thresholds, the sensible standard is simple: reasonable pricing, basic evidence, agreements in writing.
It adjusts your taxable income, generally to the median of the arm's length range, and taxes the difference, with the standard penalty regime applying on top. Adjustments also rarely travel alone: a challenged management fee in one year invites a look at every other year. Records must be kept for 7 years, and audit reach extends further in serious cases.
Directly. Meeting transfer pricing requirements and keeping the documentation is one of the conditions of being a qualifying free zone person. A free zone company that fails the condition can lose the 0 percent rate for the period and the four that follow, which is usually many times the cost of doing the compliance properly.
It is the data exercise that proves your prices match what independent companies charge: a search of comparable companies or agreements, an arm's length range, and your price placed inside it. Best practice, reflected in FTA and OECD guidance, is a full new study at least every three years with the comparables' financial data updated annually in between.
Once payments or benefits to a connected person pass AED 500,000, they must be disclosed and must be defensible as market pay for the role actually performed, or the excess deduction is at risk. We benchmark owner and director compensation against market data so the number on your return is one you can defend.
A disclosure form with clean underlying records takes days. A Local File with fresh benchmarking typically takes several weeks. A Master File for a complex group takes longer. The number that matters is 30: the days you get to produce the files after an FTA request. That window is comfortable only for businesses whose documentation already exists.
It is a binding agreement with the FTA fixing how a covered transaction is priced for 3 to 5 tax periods, available for large domestic related party flows under FTA Decision No. 2 of 2026, with an AED 30,000 application fee and mandatory pre-filing consultation. If one recurring intercompany transaction worth AED 100 million or more per period is your main tax uncertainty, it deserves a serious look, and we will tell you plainly if it does not.
It depends on which deliverables you actually need, which is why we start by mapping your obligations rather than quoting a package. After the free assessment you receive one fixed written fee for the defined scope. As a rule of thumb, full documentation costs a fraction of a single transfer pricing adjustment, and considerably less than losing a free zone rate.
