Requirements For Maintaining Transfer Pricing Documentation


As per the Ministerial Decision No.97 of 2023 for the purpose of Federal Decree-Law No.47 of 2022 on the taxation of corporations and businesses, the authority has clarified the requirements for maintaining the Transfer Documentation.

If either of the below conditions is satisfied, a taxable person must maintain both a master file and a local file as part of Transfer Pricing Documentation.

  • If the taxable person is part of a Multinational Enterprises Group and has a total consolidated group revenue of AED 3.15 Billion or more in the tax period.
  • If the taxable person’s revenue in the tax period is AED 200 Million or more.

While maintaining the local file, the taxable person should include the transactions or arrangements of the following related parties or connected persons.

  1. Non-Resident Person.
  2. Exempt person.
  3. A resident person who elected small business relief as per Article 21 of Corporate Tax Law.
  4. A resident person whose income is subject to a different corporate tax rate from the taxable person. This can be a related party or connected person whose income is eligible for 0% corporate tax as Qualifying Free Zone.

The transactions or arrangements between related parties and connected persons who are residents of the below categories shall not include in the local file.

  • If both related parties or connected persons are taxable at 9%.
  • A natural person, whose transactions or arrangements are as if they were independent** of each other.
  •  Juridical persons who are part of an unincorporated partnership, the transactions or arrangements between them as if they were independent** of each other.
  • Permanent Establishment of a non-resident whose income is subject to tax in UAE at the rate of some of the taxable person.

**If both the conditions are met, then only the transactions are considered as independent in nature.

  1. The transactions or arrangement is undertaken in the ordinary course of business.
  2. These parties are not exclusively or almost exclusively transacting with each other. This means the natural or juridical person whose transactions are fully or almost fully with a related party only then those will not be considered independent in nature.

Authority may consider different factors to understand the nature of transactions (whether dependent or independent)

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