1. Why Transfer Pricing Matters in the UAE
Under Federal Decree-Law No. 47 of 2022, all related-party and connected-person transactions must be at arm’s length — priced as if the parties were independent. The Federal Tax Authority (FTA) can ask you to prove it, so documentation is your protection.
2. Who is Required to Maintain the Master File and Local File?
Ministerial Decision 97 of 2023 requires you to keep both files if one or more of the following is met:
- Your UAE sales are AED 200 million or more in the tax year; or
- You belong to an MNE group whose total consolidated revenue exceeds AED 3.15 billion.
3. What Goes in the Master File?
The Master File gives the FTA a global view of the group:
- Group structure
- Business lines and value creation
- Intangibles (brands, tech, IP)
- Intercompany financing
- Consolidated financials and TP policies
This follows the OECD BEPS Action 13 format, so groups already doing transfer pricing elsewhere can align it for UAE compliance. (Source: tax.gov.ae)
4. What Goes in the Local File?
The Local File zooms into the UAE entity. It should:
- Describe the UAE business and functions
- List controlled (related-party) transactions
- Identify the TP method used
- Include benchmarking/support to show the price is arm’s length
This is what the FTA will really test first if they review you. Keep it contemporaneous and update every year.
5. Why Early Compliance Is Smart
- The FTA can request files and expect delivery within a short time.
- Non-alignment can lead to TP adjustments and extra tax.
- Free zone companies with related-party dealings should also keep TP in view to protect their Corporate Tax position.
Conclusion: Let U & Us Fin Solutions Handle It
Transfer pricing in the UAE is now documentation-driven: disclosure form + master file + local file, with clear thresholds and OECD-style content. If you’re near the AED 200 million mark, part of a regional group, or simply want to be FTA-ready, it’s better to build the files now than explain later.
U & Us Fin Solutions can:
- Map your related-party transactions
- Prepare UAE-compliant Master and Local Files
- Align your policies with the FTA TP Guide
- Keep you audit-ready each year
📩 Contact us for Transfer Pricing and Corporate Tax Compliance Consultation
🌐 www.uandusfinsolutions.co
📧 info@uandusfinsolutions.co
📍 Dubai, United Arab Emirates