The UAE TP Rules states that the FTA shall adjust the taxable income by performing an adjustment when the arrangement between related parties does not fall within the arm’s length range.
For domestic TP adjustments, a corresponding adjustment may be made to the taxable income of the other related party by the FTA.
For TP adjustments in a foreign country for a transaction involving a UAE entity, an application may be made by the UAE entity for a corresponding adjustment to eliminate / reduce the risks of double taxation.
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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.
