Transfer Pricing In United Arab Emirates
Learning Centre • Insights • Transfer Pricing In United Arab Emirates
Learning Centre • Insights • Transfer Pricing In United Arab Emirates
On 9 December 2022, the Federal Decree-Law No. 47 of 2022 was released by the UAE, on the Taxation of Corporations and Businesses (“CT Law”). The CT Law introduces a comprehensive TP regime that is in line with OECD TP Guidelines, and provides more details in relation to the TP rules, specifically on the following items:
The UAE TP Rules appears to apply broadly to any arrangements between related parties and connected persons. The UAE TP Rules apply to all taxpayers, including corporations, partnerships, trusts, and any other taxpayer. In addition, it applies equally to foreign owned enterprises and domestically owned enterprises, including transactions between mainland and free zone entities.
Consequently, the UAE TP Rules apply equally to solely UAE and cross-border transactions or arrangements.
We work directly with your team, applying our experience and expertise in transfer pricing to provide, prepare, document and assist in defending your international related party transactions.
For domestic TP adjustments, a corresponding adjustment may be made to the taxable income of the other related party by the FTA.
A transaction is considered to meet the arm's length principle when the results of the transaction between related parties are consistent with the results of a transaction between unrelated parties.
Country-by-country (CBC) reporting is part of a broader suite of international measures aimed at combating tax avoidance.
All taxpayers that entered into transactions or arrangements with their Related Parties and Connected Persons needs to prepare the Disclosure Form.
The Federal Tax Authority (“FTA”) has the power to reallocate income or expenses between related parties through an analysis of whether the taxpayer has dealt at arm’s length.
