sets the revenue levels above which a company must prepare both a master file and a local file:
- Where the company is the founder of a multinational enterprise group with a consolidated revenue of AED 3,150,000,000 or more, or
- Where the company has a revenue or AED 200,000,000 or more.
The format of the master file and local file is to be prescribed by the Federal Tax Authority of the UAE [B1 — the format for those documents has not yet been prescribed].
Generally, the master file should provide an overview of the company’s business activities and the corporate structure of the group to which it belongs. The local file should contain more detailed information on transactions with the following related persons
- Persons exempt from corporate tax
- Residents that elect to benefit from the Small Business Relief (Article 21 of the Law)
- Residents whose profits are subject to a different corporate tax rate from that applicable to the company’s profits
On the other hand, transactions that a taxable person should not disclose in the local file include
- transactions with related persons that are not exempt from corporate tax, or that do not elect to benefit from the Small Business Relief, or that apply the same corporate tax rate as the taxable person;
- transactions with natural persons, provided that the parties to the transactions are acting as independent persons;
- transactions with juridical persons that are related to the taxable person solely by virtue of being partners in an unincorporated partnership, but provided that the parties to the transactions are acting as independent persons;
- transactions with a permanent establishment of a foreign persons whose profits are subject to the same corporate tax rate as the taxable person’s profits.