Transfer Pricing guide: UAE
Read below for more detailed information on transfer pricing regulations, document requirements, and other considerations for the United Arab Emirates (UAE), as well as recent industry hot topics and key developments in the country's business landscape.
Page updated 1st July 2026
Transfer Pricing regulations
Is the jurisdiction part of OECD/G20 Inclusive Framework on BEPS?
UAE is not a member of the OECD. But, UAE has joined the OECD/G20 Inclusive Framework on BEPS in 2018.
Relevant Transfer Pricing regulation
The UAE Transfer Pricing rules are governed by:
1. Federal Decree Law No. 47 of 2022
2. Ministerial Decision No. 97 of 2023
The guidelines are stated in the UAE Transfer Pricing Guide (CTGTP1). The guide has taken into consideration the guidance provided by Jan 2022 OECD TP guidelines.
Is this regulation aligned with the OECD Guidelines
Yes. There are some differences where UAE specific administrative guidance is announced such as thresholds for documentation requirements.
Transfer Pricing documentation requirements
Documentation Threshold for Preparation of Local File/ TP Documentation
1. Companies who are a constituent entity of a MNE group with a total consolidated revenue of EUR 750 million.
2. Where the company's revenue is more than AED 200 million i.e., approx. USD 54 million.
Documentation Threshold for Preparation of Master File
1. Companies who are a constituent entity of a MNE group with a total consolidated revenue of EUR 750 million.
2. Where the company's revenue is more than AED 200 million i.e., approx. USD 54 million.
Documentation Threshold for Preparation of Country by Country Report
An MNE with the UPE that is a tax resident in the UAE and exceeds the EUR 750 million consolidated revenues, to file a CbC report within 12 months after the end of the financial reporting year.
Submission of Local File, Master File, and CbC Report Required? If so, when?
1. Local file and Master file - Not requried. When requested by the tax authority, must be submitted within 30 days to the FTA.
2. CbC report - Within 12 months after the end of the financial reporting year.
If No Submission Required, any Other Deadline?
N/A
Other Documentation Requirements
Submission of Transfer Pricing disclosure form along with the annual corporate income tax return.
Does TP documentation / Local file Need to be Prepared Contemporaneously with Tax Return Filing (i.e., before filing the return)?
No.
Transfer Pricing Specific Returns
Preparation of TP Return Required?
No separate TP returns. There is a TP disclosure form which is a part (schedule) of the annual corporate tax return.
Deadline for TP Return Filing
Same as the Corporate Tax return deadline, which is 9 months from the end of the relevant financial year.
Key information to be included in the TP Return
Below information is required in the TP disclosure form:
1. Name of Related Party
2. Transaction type (Goods/Services/Intellectual Property/Interest/Assets/Liabilities/Other)
3. Tax Residence
4. Corporate Tax TRN (Tax Identification No.)
5. Gross income/expense in relation to the Related party
6. TP method applied
7. Description of the 'Other' TP method, if applied.
8. Arm's lengthe value of the Related Party transaction
9. Tax Adjustments
Benchmarking - Local Tax Authority Preferences
Local vs Regional Comparables Set
FTA recommends to use domestic comparables. In case, insufficient data is not available entities can consider regional or global comparables.
Single-Year vs Multi-Year Analysis
Multi-year data must be used which is typically done for 3 years inclusive of the year in which the transaction is undertaken. When using a 3 year period, at least 2 years of data should be available in order to accept the comparable company.
Public vs Private Comparables
Without just taking convenience into consideration, if the comparables are reliable then internal comparables (private) can be utilized. In the absence of reliable internal comparables, external comparables basically using commercial databaes must be utilised.
Interquartile Range or Full Range
FTA considers accepting Interquartile Range as an appropriate approach.
Transaction-Based or Aggregate Approach, or Both
The FTA’s preferred approach is for Transfer Pricing methods to be applied on a transactional level where possible, which means that the most appropriate method should be applied to each relevant transaction. However, there may be situations where the Transfer Pricing methods could be applied on an aggregated basis, for example applying the TNMM on a company-wide basis to test the overall profitability.
How Often are Benchmarking Sets Renewed (financial update versus full scope BMS preparation)
The examination of multiple-year data is typically done for 3 years inclusive of the year in which the transaction is undertaken. When using a 3-year period, at least 2 years of data should be available in order to accept the comparable company.
Searches for comparables should be fully updated every three years with an annual financial update of the comparables in the interim years as a minimum requirement. In case of a change in circumstances of the Controlled Transaction or Related Parties (or Connected Persons), the full analysis on the selection of comparables needs to be undertaken in the year of the change in circumstances.
TP Penalties
In Case of Delayed Submission of Documentation
N/A
In case of Income Adjustments in Course of a Tax audit
The FTA shall adjust the Taxable Income contained within the Tax Return to achieve the arm's length result that best reflects the facts and circumstances of the transaction or arrangement. The FTA will also make available to the Taxable Person the information relied on to make the adjustment. Where the FTA or a Taxable Person adjusts the Taxable Income for a transaction or arrangement to meet the arm’s length standard, the FTA will reflect this adjustment in the Taxable Income of the local Related Party that is party to the relevant transaction or arrangement.
In cases where the application of the Arm’s Length Principle results in an adjustment to the transfer price made by a foreign competent authority, the Taxable Person can request the FTA to make a corresponding adjustment to their Taxable Income under the applicable
provisions of the relevant Double Taxation Agreement. The FTA will review the foreign tax authority’s position and where appropriate may proceed with a corresponding adjustment.
Other Considerations
APA & MAP Availability
Currently Article 59 of UAE Corporate Tax law states the applicability of an APA with respect to a transaction or an arrangement proposed or entered into by an entity.
Applications for unilateral advance pricing agreements will begin from Q4 2025. The date of receiving any other advance pricing agreement applications shall be announced after that date.
Applicability of Safe Harbour Rules
To reduce the compliance burden, UAE FTA accepts the simplified approach provided under Chapter VII of the OECD TP guidelines, whereby certain low value adding intra group services may be charged out at a cost plus 5% markup without the need for a detailed benchmarking analysis. The low value added intra-group services should meet the following criteria:
1. the services are of a supportive nature;
2. they are not part of the core business of the MNE Group (i.e. not creating the profitearning activities or contributing to economically significant activities of the MNE Group);
3. they do not require the use of unique and valuable intangibles and do not lead to the creation of unique and valuable intangibles; and
4. the services do not involve the assumption or control of substantial or significant risk by the service provider and do not give rise to the creation of significant risk for the service provider.
Critical Transfer Pricing Issues Prevailing in the Jurisdiction, if any
1. Cost sharing/allocations
2. Property/asset transfers from shareholder to company or intra corporate group
3. Intra group funding transactions between multiple companies, currencies and jurisdiction
4. Too much reliance on TNMM. Need to confirm if its a correct practice.
Criteria/ Guidelines for Transfer Pricing Audit/ Assessments by Tax Authority
No specific guidelines issued. The first tax period for majority clients are 2024 and first submission deadline is September 2025. More clarity will be provided in the due course.
Relevant Regulations and Rulings with Respect to Thin Capitalization or Debt Capacity in the Jurisdiction
There is a Specific Interest Deduction Limitation Rule framed to prevent the erosion of the Corporate Tax base. This could be achieved through the use of certain financial transactions between Taxable Persons and their Related Parties. For example, transactions could be carried out for the sole or main purpose of creating deductible Interest expenditure, while the Interest income derived may not be subject to tax.
The Specific Interest Deduction Limitation Rule disallows Interest expenditure incurred on a loan obtained, directly or indirectly, from a Related Party in respect of any of the following transactions:
• Dividend or profit distribution to a Related Party,
• redemption, repurchase, reduction or return of share capital to a Related Party,
• capital contribution to a Related Party, and
• acquisition of ownership interest in a Person who is or becomes a Related Party after the acquisition.
The reference to “Interest expenditure incurred on a loan” is interpreted widely to include any kind of borrowings, line of credit, bonds or transactions akin to a loan.
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Federal Decree Law No. 47 of 2022 on the Taxation of Corporations and Business paves the way for implementation of transfer pricing guidelines in UAE. The Tax registrants must rely primarily on the Corporate Tax Law, the Ministerial Decision No. 97 of 2023, and the Transfer Pricing Guide for Transfer Pricing matters involving the UAE. The Guide is the primary source of guidance for Transfer Pricing related matters prevailing over international standards. However, if a certain aspect is not covered, taxpayers are encouraged to refer to OECD Transfer Pricing Guidelines if an issue is not addressed herein.
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The UAE Tax law governs transfer pricing through:
- Article 34 – Fundamental Arm’s Length Principle
- Article 35 – Related Parties and Control
- Article 36 – Payments to Connected Persons
- Article 55 – Transfer Pricing Documentation
- Article 59 – Clarification on Advance Pricing Agreement
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Ministerial Decision No. 97 of 2023 states requirements for maintaining Transfer Pricing Master File and Local file:
1) Where the Taxable Person, for any time during the relevant Tax Period, is a Constituent Company of a Multinational Enterprises Group that has a total consolidated group Revenue of AED 3,150,000,000 (three billion one hundred and fifty million United Arab Emirates dirhams) or more in the relevant Tax Period.
2) Where the Taxable Person’s Revenue in the relevant Tax Period is AED 200,000,000 (two hundred million United Arab Emirates dirhams) or more.
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The Disclosure forms are applicable in below cases:
- Taxable Persons who have transactions with Related Parties in the Tax Period where the aggregate value of all transactions with all Related Parties recorded in the Financial Statements or at Market Value exceeds AED 40 million. On exceeding the above threshold, transactions with Related Parties where the aggregate transaction value per category exceeds AED 4 million, must be disclosed.
- If the aggregate value of transactions with Connected Persons (including their Related Parties) exceeds AED 500,000.
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This being the first year of implementation of corporate tax and transfer pricing regulations in the UAE, the audit environment remains evolving, with limited precedent and practical guidance currently available.
APA - Currently, application of Advance Pricing Agreement (APA) is not active. Applications for unilateral advance pricing agreements will be accepted from Q4 2025.
MAP – MAP applicability depends on the DTAA between UAE and the respective countries. The UAE Ministry of Finance (MoF) has issued UAE MAP Guidance.
Alignment with OECD Guidelines
The UAE Transfer Pricing Guide takes into consideration the guidance provided by the January 2022 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“OECD Transfer Pricing Guidelines”). This Guide should be primary source of guidance for Transfer Pricing related matters prevailing over international standards, however, if a certain aspect is not covered, taxpayers are encouraged to refer to OECD Transfer Pricing Guidelines if an issue is not addressed herein.
Furthermore, the following reports have been considered:
1) OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations of 2022, referred to as “OECD Transfer Pricing Guidelines”;
2) OECD Transfer Pricing Documentation and Country-by-Country Reporting, Action 13 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, referred to as “BEPS Action 13";
3)OECD 2010 report on the Attribution of Profits to Permanent Establishments issued by the OECD for further guidance;
4)OECD Model Tax Convention on Income and Capital of 2017, referred to as “OECD Model Convention”; and
5) OECD 2018 Additional Guidance on the Attribution of Profits to Permanent Establishments.
Benchmarking Analyses Nuances or Preference
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Tax authorities are likely to prefer Middle East / Gulf-based comparables, if available and reliable. However, due to limited regional data, broader geographic scopes (e.g., Europe, Asia) may be accepted with appropriate justifications.
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Common databases such as TP Catalyst, RoyaltyStat, and Loan Connector are typically used. The UAE FTA has not published any list of approved databases. Selection of data sources should be clearly documented and justified.
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Multi-year financial data (3 years) is generally preferred to identify long-term trends and eliminate anomalies. However, single-year data (for the tested year) may be accepted in certain cases, especially in volatile industries or where historical data lacks relevance.
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The use of the interquartile range to establish the arm’s length range is considered best practice. Median is often used for TP adjustments unless otherwise supported.
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The search strategy used for identifying comparables (keywords, filters, industry codes) must be transparent, replicable, and well-documented. Functional comparability is prioritized over geographic proximity if local comparables are not sufficiently available.
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Where entities have multiple business lines, segmented financials are preferred to ensure functionally comparable benchmarking. Unsegmented data may be challenged if it distorts the arm’s length outcome.
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The selection of PLI should align with the tested party’s function and risk profile:
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OP/OC or OP/OR are typical for service providers.
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TNMM is commonly used in low-risk or routine-function entities.
Thin Capitalisation Considerations for Intercompany Loans
The UAE Corporate Tax Law does not prescribe a specific thin capitalisation ratio, intercompany financing arrangements—including related party loans—are subject to transfer pricing and interest deduction limitation rules.
Transfer Pricing Primary Risk Areas in Jurisdiction
1) Failure to demonstrate that related party transactions are priced in line with market conditions. Inadequate or no benchmarking analysis for key intercompany transactions (e.g. services, financing, royalties, goods).
2) Lack of OR High-Risk Intercompany Arrangements:
a) Intercompany loans without benchmarking or clear repayment terms.
b) Royalty or licensing arrangements with no economic justification.
c) Service charges not supported by actual deliverables or cost allocations.
d) Employee cross charges not considered under Related Party category.
e) Incorrect classification or failing to recognize controlled transactions.
3) Economic TP adjustments not being properly recorded in the books or tax return. The tax return allows Positive & Negative adjustments through tax return where the adjustments are not given effect in the books. While positive adjustments are simple to input, negative adjustments require approval from FTA.
4) TP Guide has clearly stated that Transfer Pricing rules in the UAE apply not only to MNE Groups, but also to any transactions and arrangements with Related Parties or Connected Persons in domestic groups. Entities are still under assumption that TP rules apply only to cross-border transactions—UAE TP rules also apply to domestic related party transactions, particularly when one party is tax-exempt or in a Free Zone or companies under one corporate group etc.
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Using consolidated or non-segmented financial data for benchmarking, especially in businesses with diverse activities.
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Transactions with owners, directors, or their relatives may be overlooked but are covered under Connected Person rules. Risks of excessive remuneration or disguised profit distributions.
