Why is Transfer Pricing important?

  • Opening balance for the first taxable period to be in line with the arm’s length principle. Taxpayers should ensure that all necessary adjustments are undertaken on any closing balances with related parties before the beginning of the first taxable period
  • For taxpayers, all transactions with related parties (within UAE and outside UAE) need to be entered into on an arm’s length basis
  • Further, the scope of Transfer Pricing has been extended to payments made to "Connected Persons"
  • Qualifying freezone entities required to mandatorily be in compliance with the arm’s length principle
  • Taxpayers will be required to maintain TP documentation where the revenue in a particular tax period is AED 200 Million or more. However, even if such thresholds are not met, it does not take away adherence to the arm’s length principle away from the taxpayers

What are the benefits of adherence with the Transfer Pricing regulations?

  • Optimizing pricing decisions and reducing the risk of over or under-pricing intercompany transactions
  • Reduced risk of tax audits and disputes with tax authority if Transfer Pricing polices can be supported with a detailed analysis and back-up documentation
  • Brings increased transparency and consistency for the taxpayers through establishment of clear Transfer Pricing policies and procedures

Who is covered?

  • Related party – A related party is an individual or entity who has a pre-existing relationship with a business through ownership, control or kinship (in the case of natural persons).
  • Connected Person – An individual who has an ownership interest in the company/director or officer of the company along with any relatives (upto fourth degree of kinship or affiliation) shall be considered "Connected" to the business of the company.

Why choose our Transfer Pricing services?

Our Transfer Pricing services are provided by a team of experienced professionals who have deep expertise in Global Transfer Pricing regulations and best practices.

We work closely with our clients to understand their unique needs and develop tailored solutions that meet their specific requirements. Our services are back by rigorous methodologies, advanced technology, and a commitment to delivering high-quality work that is timely and cost-effective.