On 23 October 2023, the Federal Tax Authority (FTA) of the United Arab Emirates (UAE) released the Transfer Pricing Guide.
This guide is designed to provide general guidance on the Transfer Pricing regime in the UAE with a view to making the provisions of the Transfer Pricing regulations as understandable as possible to readers. The guide includes:
- Overview of Transfer Pricing rules and procedures;
- Determining Related Party transactions and ensuring transactions are conducted on an Arm’s Length basis;
- Compliance requirements, including Transfer Pricing documentation;
- Common business inquiries related to reducing uncertainties for Taxable Persons regarding the implementation and application of Transfer Pricing rules in the Corporate Tax Law.
The UAE has adopted the OECD Transfer Pricing Rules, and all companies operating in the UAE must comply with the Transfer Pricing rules and documentation requirements. These rules may also apply to domestic transactions.
On 11 May 2023, the Ministry of Finance (MoF) of the UAE issued Ministerial Decision No. 97 of 2023, outlining the requirements of transfer pricing (TP) documentation.
Additionally, Federal Decree Law No (47) of 2023 on the Taxation of Corporations and Businesses enforces transfer pricing rules and documentation requirements to ensure that the pricing of transactions between related parties and connected persons, such as companies that are part of the same multinational enterprise (MNE) group, are not influenced by their relationships.
