Transfer Pricing Documentation Requirements in the UAE

Executive Summary

UAE Corporate Tax Law mandates comprehensive transfer pricing documentation for transactions between Related Parties and Connected Persons, with specific requirements codified in Ministerial Decision No. 97 of 2023. Taxable Persons must maintain a Master File and Local File where Revenue exceeds AED 200 million, while all Taxable Persons with related party transactions must be able to demonstrate arm's length pricing. Documentation must be contemporaneous and available upon FTA request within 30 days.

Legal Basis

• Federal Decree-Law No. 47 of 2022, Articles 34, 35, 55, and 56
• Ministerial Decision No. 97 of 2023 on Requirements for Maintaining Transfer Pricing Documentation
• Cabinet Decision No. 74 of 2023 (Executive Regulation on Tax Procedures) for record-keeping obligations

Analysis

Arm's Length Principle Foundation

The Corporate Tax Law establishes that transactions between Related Parties and Connected Persons must be conducted at arm's length [Federal Decree-Law No. 47 of 2022, Article 34]. The FTA may adjust Taxable Income where arrangements do not reflect arm's length pricing, making robust documentation essential for compliance and defense against adjustments.

Documentation Tiers

Ministerial Decision No. 97 of 2023 establishes a tiered documentation framework:

• Disclosure Form: Required for all Taxable Persons with related party transactions


• Master File and Local File: Required where consolidated group Revenue exceeds AED 200 million


• Country-by-Country Reporting: Applies to UAE Ultimate Parent Entities of multinational groups with consolidated Revenue exceeding AED 3.15 billion

Key Requirements

• Master File contents: Group structure, business overview, intangibles, intercompany financial activities, and consolidated financial/tax positions
• Local File contents: Entity management structure, business description, controlled transactions, financial information, and comparability analysis
• Submission timeline: Documentation must be available within 30 days of FTA request
• Contemporaneous preparation: Documentation should be prepared by Tax Return filing deadline
• Retention period: 7 years from end of relevant Tax Period [Federal Decree-Law No. 28 of 2022, Article 56]

Dependencies

Transfer pricing documentation requirements interact with:

• Related Party definitions under Article 35 of the Corporate Tax Law (ownership ≥50%, common control, or family relationships)


• Connected Persons provisions covering directors, officers, and their relatives


• General record-keeping obligations under Tax Procedures Law

Critical Considerations

> ⚠️ Important: Failure to maintain adequate transfer pricing documentation may result in FTA adjustments to Taxable Income and potential administrative penalties under Cabinet Decision No. 75 of 2023.

> 💡 Note: Even where formal Master/Local File requirements do not apply (Revenue below AED 200 million), Taxable Persons must still maintain sufficient documentation to demonstrate arm's length compliance upon FTA request.