Related‑party disclosures, Local File and Master File, benchmarking and defensible arm's‑length policies for groups, family businesses and Indian‑owned UAE subsidiaries.
The UAE Corporate Tax law adopts the OECD arm's‑length principle for all transactions with related parties and connected persons — not just multinationals. Management fees paid to a parent, loans between sister companies, goods bought from a group entity in India, salaries paid to owners and rent charged by a shareholder are all in scope. Every return must confirm these are priced as independent parties would agree, and the FTA can adjust income where they are not.
| Requirement | When it applies |
|---|---|
| Arm's‑length pricing | All related‑party and connected‑person transactions, regardless of size. |
| Transfer pricing disclosure form (with the CT return) | Aggregate related‑party transactions above AED 40 million in the period (individual categories above AED 4 million are itemised); connected‑person payments above AED 500,000 per person. |
| Local File & Master File | Taxable person's revenue ≥ AED 200 million, or member of an MNE group with consolidated revenue ≥ AED 3.15 billion. |
| Country‑by‑Country Report | UAE‑headquartered MNE groups with consolidated revenue ≥ AED 3.15 billion. |
Even below the documentation thresholds, the FTA expects you to be able to demonstrate how related‑party prices were set. A light‑touch policy document and benchmark is inexpensive insurance.
A Dubai trading company buying from its Indian parent; a free zone entity charging management fees to a mainland sister company; shareholder loans with no interest; a QFZP whose qualifying income depends on properly priced transactions with related parties. In each case we document the position before the return is filed, when it is cheapest to fix.
Yes. The arm's‑length principle applies to all related‑party transactions with no minimum. Only the disclosure form and Local/Master File have monetary thresholds.
Yes — payments to connected persons (owners, directors and their relatives) must be at market value to be deductible, and above AED 500,000 per person they are disclosed on the return.
An analysis of comparable independent companies to establish the range of margins or prices that unrelated parties earn, used to justify your intra‑group pricing.
Yes. Qualifying income is computed on an arm's‑length basis, and non‑compliance can undermine QFZP status, exposing all income to 9%.
Indian entities file Form 3CEB for international transactions with associated enterprises. We align the UAE analysis so the same transaction carries a consistent, defensible position in both countries.
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