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Statutory Audit
We conduct an integrated audit, which combines the financial statement audit,independent and objective assurance on financial information, transactionsand processes.
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Limited Review
We offer services relating to reviews of historical financial informationby expressing negative assurance on such historical financial information.
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Agreed Upon Procedures
We engage with organisationsto perform specific procedures and report findings to conform to their needs.
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Financial Reporting Advisory Services (FRAS)
Our team provides timely advice on the impact of accounting changes to assist businesses in the development of an appropriate implementation roadmap.
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Business Consulting
Grant Thornton UAE provides organisations with implementable plans that drive sustainable growth strategies to grow and optimise their business performance.
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Business Risk Services
Organisations need to understand risks thoroughly to be able to manage them better. Grant Thornton UAE helps businesses achieve the best balance between minimising risk exposure, optimising profitability and developing compliance review checklists.
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Regulatory Advisory Services
Grant Thornton UAE's extensive understanding of the overarching supervisory framework within the region equips our professionals to support financial institutions comply and abide by the set of regulatory mandates throughout the rapidly evolving ecosystem.
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Financial Advisory
Grant Thornton UAE works with organisations on transactions from start to finish, assisting with strategy, identifying risks, executing deals, and helping to unlock their potential for growth and value creation.
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Restructuring Advisory
Grant Thornton UAE is committed to realising value for shareholders, in a way that recognises and supports the interests of all stakeholders. Our solutions maximise value, provide clarity and direction, and accelerate recovery and transformation for businesses.
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Technology Advisory & Cybersecurity
IT and technology are fundamental to drive the performance of businesses. Through leveraging the power of technology, Grant Thornton UAE helps organisations define and identify growth opportunities to achieve value-driven transformation and innovation.
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Forensics
Fraud and corruption pose a growing challenge worldwide. As the commercial landscape changes, an increasingly regulated environment requires stringent governance and compliance processes. Grant Thornton UAE helps organisations navigate challenges and crisis with a hands-on approach coupled with the use of technology.
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ESG Services
The Environment, Social and Governance (ESG) agenda has gained significant traction over the years, to become one of the key strategic aspects of any business. It is imperative that all organisations, irrespective of industry sector, engage with their stakeholders and prioritise ESG practices to unlock sustainable growth opportunities.
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Business Process Solutions
Our team at Grant Thornton offers comprehensive and cost effective outsourced solutions, enabling stakeholders and business owners to focus on their core business goals.
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Corporate Tax
Our diversified team of corporate tax subject matter experts combines a perfect blend of international experience across several industry sectors, technical expertise, and commercial nuances with a commitment to deliver exceptional value to your business.
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VAT
The VAT team at Grant Thornton is well versed with the VAT Laws applicable across the region and holds valuable experience and professional accreditation in assisting clients across diverse industries to comply with the VAT obligations.
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Transfer Pricing
Grant Thornton UAE assists its clients in providing transfer pricing solutions that are implementable and operational, considering the facts and concerns of its clients.
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International Tax and Tax Due Diligence
Grant Thornton UAE supports multinational groups to optimise their tax structures. We can also assist businesses in analysing existing group transactions and inter-group supplies, as well as advising on potential implications of various taxes to facilitate an efficient Group tax structure.
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Economic Substance Requirements
Economic Substance rules were introduced in the UAE in 2019, requiring UAE businesses that undertake certain ‘Relevant Activities’ to maintain and demonstrate adequate substance.
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Customs and International Trade
The team at Grant Thornton is positioned centrally to assist the businesses with global cross-border tax structuring, planning and compliance needs.
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Excise Tax
We provide Excise Tax related advisory and compliance services to the producer, importer, and the storekeeper of excisable goods
The transfer pricing provisions in the UAE Corporate tax law impose an obligation on UAE taxpayers to determine the pricing of related party transactions in accordance with the Arms’ Length Principle (‘ALP’). Failure to comply with the ALP will warrant Transfer Pricing (‘TP’) adjustments.
Where required, and to maintain compliance, if the transactions are not at arm’s length, TP adjustments can be made by taxpayers in their financial statements or corporate tax returns, depending upon the point in time of identification of the TP adjustment.
TP adjustments can also be made by the Federal Tax Authorities (‘FTA').
Adjustment by the taxpayer
Taxpayers must ensure that transactions are conducted at arm's length and are responsible for providing evidence to support the pricing adopted by preparing and maintaining suitable TP documentation, including benchmarking studies. Taxpayers should monitor inter-company pricing and assess whether any TP adjustments are necessary. TP adjustments are calculated by determining the difference between the arm’s length price and the actual price of the related party transactions. The amount so determined can then be adjusted by the taxpayer.
Adjustment by the FTA
If the FTA makes a TP adjustment to the taxable income reported by the taxpayer in the corporate tax return, the FTA will provide the information based on which the adjustment was made. The FTA can make TP adjustments following the review of the taxpayer's TP documentation (e.g. TP policy, local file, master file, any other relevant TP documentation) if they disagree with the approach adopted by the taxpayer.
Corresponding adjustments
The UAE TP regulations also provide for corresponding adjustments, i.e., where a taxpayer makes an upward adjustment to the taxable income with respect to domestic transactions (i.e. transaction between related parties based in UAE), a corresponding downward adjustment can be made to the taxable income of the counterparty to achieve tax neutrality and avoid any double taxation. It should be noted that downward adjustments, intended to decrease taxable income, will only be allowed upon successful application to the FTA. The procedures for making an application to the FTA are not yet prescribed by the FTA.
This applies even when the TP adjustment is made with respect to cross-border transactions, either by the taxpayer or by a foreign competent authority. In such cases, a taxpayer can apply to the foreign competent authority to make a corresponding adjustment to their taxable Income. This can be done with consideration of provisions covered in the Double Taxation Avoidance Agreements with the different countries.
Corresponding impact on VAT and Customs
It is also important for taxpayers to consider the implications of any TP adjustments recorded in their financial accounts on both Value Added Tax (‘VAT’) and customs duties, respectively.
In accordance with UAE VAT Law, VAT is levied on the taxable supply of goods and services for consideration. The law permits adjustments to output VAT when the initially agreed consideration for a supply is modified for any reason. Consequently, if a TP adjustment is reflected in the financial statements to alter the receivable and payable positions between related parties, it may be regarded as an adjustment in the consideration for a previous supply. Depending on the original VAT treatment, this adjustment may be subject to VAT. Therefore, adjustments that increase the transaction price can lead to additional VAT liability, while those that decrease the price may result in an output VAT credit.
Customs duty is generally calculated based on the transaction value of imported goods, defined as the price actually paid or payable for the import. When the transaction value is adjusted upwards, the importer may incur additional customs duties due to the increased duty liability associated with the higher price. Conversely, a downward adjustment in the transaction value may result in a reduction of customs duties payable. Taxpayers are advised to review import duties paid in relation to any transactions that have been subject to any TP adjustments to determine whether any corresponding customs duty adjustments are required to ensure compliance and accurate reporting.
When considering these adjustments, it is imperative to account for the timing of such adjustments in accordance with the VAT date of supply concept and the practices adopted by the Customs authorities in the UAE. Accordingly, proper documentation, including the inclusion of price adjustments in intercompany agreements and ensuring their correct timing, is essential for compliance with both VAT and customs regulations.
Key takeaways for taxpayers
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Ensure that transactions with related parties and connected persons are conducted at arm’s length. To achieve this, taxpayers should continuously monitor the conduct of their related party and connected person transactions throughout the tax period to ensure compliance with the ALP and evaluate whether any TP adjustments are necessary.
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If adjustments are required, an assessment should be made to determine whether they should be recorded in the financial accounts before year-end or just reflected in the corporate tax return.
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If adjustments are included in the financial accounts, ensure precise and timely disclosures of adjustments in the VAT returns, and Customs declarations. It is also essential to maintain comprehensive records, especially considering that the burden of proof is with the taxpayer.
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Appropriate TP policy and documentation should be prepared well in advance of submitting the corporate tax return. This includes the disclosure of related party transactions to justify the arm’s length nature of these transactions and mitigate TP risks and disputes in the future.
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The impact of TP adjustment must be revisited to assess the potential impact of UAE e-invoicing, due for implementation in 2026.
Successfully navigating these complexities demands proactive engagement and staying informed about updates or clarifications from tax authorities. By staying ahead of evolving requirements, GT UAE assists taxpayers in confidently meeting their tax obligations, minimizing risks, and ensuring compliance.
