Related-party transaction review
We identify every related party and connected person, map all controlled transactions and flag the risk areas under the UAE rules.
Transfer Pricing Services in Dubai & UAE – Documentation, Benchmarking & FTA Support
Under UAE corporate tax, every transaction with a related party or connected person must be priced at arm's length, whatever the size of the business. SGA World provides transfer pricing services in Dubai and Abu Dhabi: transfer pricing policies, benchmarking studies on Orbis and TP Catalyst, Local File and Master File documentation, the TP disclosure form and support with FTA queries.
- Ministry of Economy and Tourism approved auditor
- 500+ clients
- Dubai & Abu Dhabi
Since UAE corporate tax began, transfer pricing has become one of the areas the FTA examines most closely. Prices for goods, services, loans, management fees, royalties and salaries between related companies, and payments to owners and directors, must all be at arm's length, and you must be able to prove it.
SGA World is a transfer pricing specialist in Dubai and Abu Dhabi. We prepare transfer pricing policies, functional analyses and benchmarking studies on Moody's Orbis and TP Catalyst, Local Files and Master Files, the transfer pricing disclosure form and connected-person reviews, coordinated with your audit and corporate tax return.
- Revenue that triggers a Local File
- AED 200M
- Group revenue for Master File and CbCR
- AED 3.15B
- Related-party total for the disclosure form
- AED 40M
- Connected-person payments to disclose
- AED 500K
At a glance
UAE Transfer Pricing: Key Facts
- The rule: related-party transactions must be at arm's length, with no size threshold.
- Domestic too: applies to deals inside the UAE, not just cross-border.
- Disclosure form: related-party transactions above AED 40 million.
- Local File: UAE revenue of AED 200 million or group revenue of AED 3.15 billion.
- Connected persons: payments above AED 500,000 must be disclosed.
- Records: keep for 7 years; submit within 30 days of an FTA request.
Transfer pricing basics
What Is Transfer Pricing in the UAE?
Transfer pricing is the price charged in a transaction between related parties, such as two companies in the same group, or between a business and its owners or directors. Because these parties are not independent, they could set prices that move profit to where tax is lowest.
The UAE transfer pricing rules are in Articles 34 to 36 and Article 55 of Federal Decree-Law No. 47 of 2022, Ministerial Decision No. 97 of 2023 and the FTA's Transfer Pricing Guide. They follow the OECD Transfer Pricing Guidelines. The rules apply to cross-border transactions and to transactions inside the UAE, for example between a mainland company and its free zone sister company.
- Transactions with related parties must be at arm's length (Article 34)
- Payments to connected persons must reflect market value (Article 36)
- Applies to every taxable person, with no minimum size
- The FTA can adjust your taxable income if prices are not at arm's length
Documentation thresholds
UAE Transfer Pricing Documentation Requirements and Thresholds
The arm's length rule applies to everyone. These thresholds decide what you must file or keep as formal documentation.
| Requirement | Who must prepare it | When |
|---|---|---|
| Transfer pricing disclosure form | Related-party transactions above AED 40 million in total; each category above AED 4 million is reported | Filed with the corporate tax return |
| Connected persons schedule | Payments or benefits to a connected person above AED 500,000 | Filed with the corporate tax return |
| Local File | UAE entity revenue of AED 200 million or more, or part of a group with revenue of AED 3.15 billion or more | Kept ready; submitted within 30 days of an FTA request |
| Master File | Part of a multinational group with consolidated revenue of AED 3.15 billion or more | Kept ready; submitted within 30 days of an FTA request |
| Country-by-Country Report | Multinational group with consolidated revenue of AED 3.15 billion or more | Notification by the year end; report within 12 months |
| Supporting evidence | Every business with related-party or connected-person transactions | On request by the FTA |
Thresholds under Ministerial Decision No. 97 of 2023 and FTA guidance. Records must be kept for seven years. Groups that operate only in the UAE do not need a Master File.
Who needs transfer pricing
Which UAE Businesses Need Transfer Pricing Services?
Any business that trades with related companies or pays its owners and directors should review its transfer pricing. It matters most for:
- Groups with mainland and free zone companies trading with each other
- UAE subsidiaries and branches of foreign multinationals
- Family groups with several companies and shareholder loans
- Qualifying Free Zone Persons, where arm's length pricing is a condition of the 0% rate
- Companies paying management fees, royalties or head-office charges
- Owners and directors receiving salaries or benefits from their company
Our services
Our Transfer Pricing Services in Dubai and the UAE
Functional analysis (FAR)
Interviews and analysis of the functions performed, assets used and risks assumed by each entity, the basis of every transfer pricing position.
Benchmarking studies
Searches on Moody's Orbis and TP Catalyst to set the arm's length range for margins, mark-ups, fees and interest. See benchmarking.
Local File and Master File
OECD-standard documentation prepared contemporaneously, ready to submit within 30 days of an FTA request.
TP disclosure form
Preparation of the related-party and connected-person schedules filed with your corporate tax return.
Policies and intercompany agreements
Group transfer pricing policies and written agreements for goods, services, cost recharges, loans and royalties.
Intercompany financing
Arm's length interest rates for shareholder and intercompany loans, cash pooling and guarantees, with credit rating analysis.
KMP salary benchmarking
Market-value support for owner and director remuneration under the connected-person rules. See KMP salary benchmarking.
FTA queries, audits and APAs
Support with FTA queries and audits, and preparation of Advance Pricing Agreement applications, with representation through Saif Chartered Accountants.
OECD methods
Which Transfer Pricing Methods Does the FTA Accept?
The UAE accepts the five OECD methods, and the most appropriate one is chosen for each transaction after the functional analysis.
Comparable Uncontrolled Price (CUP)
- Best suited to
- Transactions with reliable market prices
- Typical UAE example
- Intercompany loans, commodity sales
Resale Price Method
- Best suited to
- Distributors that resell without adding much value
- Typical UAE example
- Trading company buying from a group supplier
Cost Plus Method
- Best suited to
- Routine services and contract manufacturing
- Typical UAE example
- Shared-service centre charging group companies
Transactional Net Margin Method (TNMM)
- Best suited to
- Most transactions, testing the net margin of one party
- Typical UAE example
- Distributors and service providers in Dubai
Profit Split Method
- Best suited to
- Highly integrated operations or unique intangibles
- Typical UAE example
- Jointly developed technology or brands
Our process
How We Deliver Your Transfer Pricing Documentation
Step01
Scoping and transaction mapping
We identify related parties and connected persons, list every controlled transaction and confirm which thresholds apply.
Step02
Functional analysis
We interview your team and analyse the functions, assets and risks of each entity to characterise the transactions.
Step03
Method and benchmarking
We select the most appropriate method, run Orbis and TP Catalyst searches and calculate the interquartile range.
Step04
Documentation and filing
We prepare the Local File, Master File and policy, complete the disclosure form and support your corporate tax return.
Transfer pricing desk
Make Your Related-Party Pricing Defensible
If the FTA questions your intercompany prices, the burden is on you to show they are at arm's length. We build the analysis and documents before you file, so you are ready for any query.
You receive
- Map of related parties, connected persons and transactions
- Functional analysis and method selection
- Benchmarking study with arm's length range
- Local File, Master File or policy as required
- Disclosure form figures agreed to your return
Common transactions
Transactions the FTA Looks at First
Some transactions appear in almost every UAE group and attract the most FTA attention:
- Management fees and head-office charges: you must show the services were actually provided and benefited the UAE company (the benefit test), and that the cost base and mark-up are reasonable
- Shareholder and intercompany loans: interest-free or low-interest loans between related companies need an arm's length interest rate, or a documented reason why none applies
- Sales between mainland and free zone companies: prices that shift profit into a 0% QFZP are a clear risk area
- Royalties and brand fees: payments for the use of a group trademark or know-how need support for both the rate and the value received
- Cost recharges and shared services: allocation keys and any mark-up must be consistent and documented
- Owner and director remuneration: salaries above market value are not deductible under the connected-person rules
Risks
Penalties and Risks of Getting Transfer Pricing Wrong
The biggest cost is usually not a fixed penalty but a transfer pricing adjustment: the FTA can increase your taxable income to an arm's length amount and charge 9% tax on the difference, plus penalties on the unpaid tax.
- Failure to keep required records: AED 10,000, or AED 20,000 if repeated within 24 months, under Cabinet Decision No. 75 of 2023
- Incorrect corporate tax return: penalties based on the tax difference
- A QFZP that does not follow the arm's length principle can lose its 0% status for five years
- Adjustments can lead to double taxation where the other party is abroad
Documentation must be contemporaneous: prepared when the prices are set and the return is filed, not after the FTA asks.
New in the UAE
Advance Pricing Agreements (APAs) in the UAE
The FTA published its first Advance Pricing Agreement guide on 30 December 2025. An APA is a binding agreement between a business and the FTA on the transfer pricing method for specified transactions over a future period, giving certainty in advance.
- Unilateral APAs for domestic transactions are accepted from 30 December 2025, with cross-border APAs to follow
- Intended for significant transactions, generally at least AED 100 million per tax period
- Requires a detailed functional analysis, benchmarking and a pre-filing meeting with the FTA
We assess whether an APA is worthwhile for your transactions and prepare the application.
Common mistakes
Common Transfer Pricing Mistakes UAE Businesses Make
Treating transactions inside the UAE as exempt
The arm's length rule applies to domestic transactions too
No written intercompany agreements
Makes it hard to prove what the parties agreed
Management fees without evidence of services
Fails the benefit test and is not deductible
Using one company-wide benchmark for everything
Each transaction type needs its own analysis
Ignoring connected-person payments
Owner salaries above market value are not deductible
Preparing documents only after an FTA request
Records must be contemporaneous; 30 days is not enough
Glossary
Transfer Pricing Terms Explained
- Arm's length principle
Related parties must price transactions as independent parties would.
- Related party
A person linked by 50% or more ownership or control, family ties or a head office and branch.
- Connected person
An owner, director or officer of a business; payments to them must not exceed market value.
- Controlled transaction
Any transaction between related parties or with connected persons.
- Local File
Entity-level transfer pricing documentation for the UAE company.
- Master File
Group-level documentation of a multinational's business and policies.
- CbCR
Country-by-Country Report for groups with revenue of AED 3.15 billion or more.
- APA
Advance Pricing Agreement: a binding agreement with the FTA on future pricing.
Why SGA World
Why Choose SGA World for Transfer Pricing?
In-house Orbis and TP Catalyst
Benchmarking run by our own team on Moody's databases, so studies are faster and fully explained.
Auditors and tax advisers together
Transfer pricing aligned with your audited accounts, corporate tax return and QFZP position.
FTA representation
Representation in FTA queries and audits through our associate office, Saif Chartered Accountants, an FTA-registered tax agency.
Location: Dubai
Dubai Office
Our Dubai office in The Exchange Tower, Business Bay is the central hub for our audit, accounting and tax services across the UAE.
Dubai
Office 1923, The Exchange Tower, Business Bay, Dubai
Abu Dhabi
Khalidiya Towers M-B6, W10, Al Bateen, Al Khalidiyah, Abu Dhabi
Talk to an auditor
Tell us your company type, jurisdiction and deadline. We will confirm the scope, timeline and fee.
- WhatsApp us+971 50 627 3556
- Call us+971 4 570 1795
- Email us[email protected]
- Book an appointmentChoose a time that suits you
Prefer a form? Send us a detailed enquiry.
Who prepared this page
Written and reviewed by SGA World's audit and tax team
This guide is prepared by chartered accountants at SGA World Auditing Accounting L.L.C S.P.C in Business Bay, Dubai, a Ministry of Economy and Tourism approved audit firm, and checked against Federal Tax Authority legislation and guidance. It is reviewed whenever the rules change.
- Last reviewed 2 October 2026
- Chartered accountants from India and the UK
- FTA representation through Saif Chartered Accountants
Have a question about your company?
Tell us your activity, jurisdiction and deadline. A chartered accountant will reply.
Ask an expertFrequently asked questions
Transfer Pricing in the UAE – FAQs
Short answers to the questions UAE businesses ask us most. Still unsure?
Talk to our team01.What is transfer pricing in the UAE?
Transfer pricing is the price set for transactions between related parties, such as group companies, or between a business and its owners or directors. Under UAE corporate tax, these prices must be at arm's length, meaning the price independent parties would agree in similar circumstances.
02.Is transfer pricing mandatory for all UAE companies?
The arm's length principle applies to every taxable person with related-party or connected-person transactions, whatever its size. Formal Local File and Master File documentation is only required above the revenue thresholds.
03.When is a Local File required in the UAE?
When the UAE entity has revenue of AED 200 million or more in the tax period, or belongs to a multinational group with consolidated revenue of AED 3.15 billion or more. It must be submitted within 30 days of an FTA request.
04.What is the difference between a Master File and a Local File?
The Master File gives a group-wide overview of the business, value chain and transfer pricing policies. The Local File covers the UAE entity's own controlled transactions, functional analysis, method and benchmarking.
05.What are the transfer pricing disclosure form thresholds?
The disclosure form is filed with the corporate tax return when transactions with related parties exceed AED 40 million in total; each transaction category above AED 4 million is reported. A connected persons schedule is required where payments to a connected person exceed AED 500,000.
06.What is the difference between related parties and connected persons?
Related parties are linked by ownership or control of 50% or more, family relationships or a head office and branch link; their transactions must be at arm's length. Connected persons are owners, directors and officers; payments to them are deductible only up to market value.
07.Do transactions between two UAE companies need transfer pricing?
Yes. UAE transfer pricing rules apply to domestic transactions, such as between a mainland company and its free zone affiliate, not only to cross-border transactions.
08.Do free zone companies need transfer pricing documentation?
Yes. A Qualifying Free Zone Person must apply the arm's length principle and keep transfer pricing documentation as a condition of the 0% rate, and the general thresholds for the Local File and Master File also apply.
09.Which transfer pricing methods does the FTA accept?
The five OECD methods - Comparable Uncontrolled Price, Resale Price, Cost Plus, Transactional Net Margin and Profit Split - with the most appropriate method chosen for each transaction.
10.What is a transfer pricing benchmarking study?
A study that compares your related-party prices or margins with those of independent comparable companies, usually from databases such as Orbis, to establish the arm's length range.
11.Are interest-free shareholder loans allowed?
Loans between related parties should carry an arm's length interest rate. An interest-free loan needs a documented reason, for example where it is treated as equity; otherwise the FTA may adjust the taxable income.
12.Is there an Advance Pricing Agreement programme in the UAE?
Yes. The FTA published its APA guide on 30 December 2025. Unilateral APAs for domestic transactions are accepted first, with cross-border APAs to follow, for significant transactions generally of AED 100 million or more per tax period.
13.How long must transfer pricing records be kept?
Seven years after the end of the tax period they relate to.
14.What happens if transfer pricing is not at arm's length?
The FTA can adjust your taxable income to an arm's length amount and charge corporate tax on the difference, with penalties. For a QFZP, it can also cost the 0% rate.
