Overview of guidance on the preparation of transfer pricing documentation in the UAE

29 May 2023
Tax Messenger
In May 2023 the Ministry of Finance of the UAE published on its official website Decision No. 97: «Requirements for Maintaining Transfer Pricing Documentation» («the Decision»), which supplements Decree-Law No. 47/2022 on the Taxation of Corporations and Businesses («the Corporate Tax Law» / «the Law»). The Decision is intended to address matters relating to the preparation of transfer documentation in the UAE that are not already covered in the Law (see our earlier overview of the new transfer pricing rules in the UAE).

In addition, on 12 May 2023 the Ministry of Finance of the UAE also issued an Explanatory Guide on the Corporate Tax Law («Explanatory Guide»), which may be used in interpreting the meaning and effect of each individual article of the Law.

Presented in this alert is a brief overview of the additions made to the transfer pricing rules in the UAE based on the documents mentioned above.
In conclusion

It should be noted that there are still many aspects of the transfer pricing rules that are not covered by the Law, the Decision and the Guide. At the same time, the Guide states that the UAE’s transfer pricing rules are intended to be aligned with the international transfer pricing rules set out in the OECD Guidelines for Multinational Enterprises and Tax Administrations («the OECD Guidelines») and allows taxable persons to use relevant provisions from the OECD Guidelines as a reference in the application of the provisions of the Law.

It should also be expected that, further to the Decision, the Federal Tax Authority of the UAE will issue guidance on the application of provisions of the Decision and the preparation of transfer pricing documentation.

We will continue to monitor the development of these rules in the UAE and will publish regular updates on any further changes.
How B1 can help

In light of the new transfer pricing rules in the UAE, B1's professionals are ready to provide prompt support in:

  • Analysing current transactions involving UAE companies and identifying and assessing transfer pricing risks
  • Developing and implementing transfer pricing policies with the involvement of UAE companies
  • Preparing templates of transfer pricing documentations, including master files and local files
  • Carrying out benchmarking studies of prices / profit margins in relation to transactions with UAE residents
  • Transfer pricing advice and planning for new transactions involving UAE companies.

  • Ruslan Radzhabov
    Transfer Pricing and Operating Model Effectiveness
  • Vasilii Anishchenko
    Associate Partner
    Transfer Pricing and Operating Model Effectiveness
  • Ekaterina Syrnikova
    Senior Manager
    International Tax and Transaction Services
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