The related parties
Who they are and how they are connected.
Accounting and tax
Transfer pricing in the UAE
Transfer pricing concerns the prices charged between related parties. This page explains in general terms when it may apply to a UAE entity, what documentation can involve and what to gather before you get in touch.
When it applies
Transfer pricing rules generally look at transactions between related or connected parties, such as a parent and its subsidiary or companies under common ownership. Groups with entities in several countries commonly need to consider them, and rules can also reach arrangements within one country.
Whether a rule applies, and what is required, depends on the regime in force and on your facts. Check the current requirements for your entities.
The basic idea
Related parties are generally expected to deal with each other on terms comparable to those between independent parties, often called the arm's length principle. Documentation helps show how prices were set.
Documentation
What documentation is required depends on the rules and on your circumstances. It commonly covers:
The transactions
What is bought, sold, lent or charged between them.
The pricing method
How the price was set and why it is considered reasonable.
Supporting evidence
Agreements, financial data and comparable information.
What to consider
Start with your group structure and the transactions you have. From there you can consider what may need documenting and what information you already hold.
Information worth gathering first
Collecting these items early makes any later discussion more useful.
A structure chart
A simple diagram of who owns whom, including entities in other countries.
Agreements between related parties
Loan, service, licence or supply agreements, and any price lists.
A record of the dealings
What was bought, sold, lent or charged between the parties, and when.
Financial information for each entity
Accounts that show how each entity performs.
An account of how prices were set
Notes on the method used and the information it relied on.
Related services
Accounting and tax overview
Bookkeeping, VAT, corporate tax, transfer pricing and audit.
Corporate tax
Registration and filing topics, with links to official guidance.
Bookkeeping and accounting
Day-to-day records, reporting and finance support.
Frequently asked questions
Does transfer pricing apply to a small company?
It can apply if the company deals with related parties. Whether any threshold or exemption applies depends on the rules in force, so check the current rules rather than assuming.
What is a related party?
Broadly, a person or company linked by ownership, control or family. The exact definition is set by the rules, so check it for your case.
Do I need documentation if I only deal with one related company?
It depends on the rules and the size and nature of the dealings. Ask us or check the official guidance.
Can you set the right price for my transactions?
Pricing decisions are for the business to make on advice. We can help you think about the information involved. We do not promise that any authority will accept a particular price.
Related-party transactions to review?
Tell us about your group structure and the transactions you have.
Information on this page is general and may change. Requirements are set by the relevant UAE authorities. Contact us for advice on your situation.
This is general information and not legal or tax advice.
Nexoviz is an independent company and is not affiliated with, endorsed by, or acting on behalf of any government authority unless stated.