Tax · Transfer Pricing
Transfer Pricing Compliance in the UAE
We help you set and document arm’s-length prices for dealings with related parties and connected persons — benchmarking, intercompany agreements, the disclosure form, and master and local files where required — ready for when the FTA asks.
- Benchmarking Studies
- Intercompany Agreements
- Mainland & Free Zone Groups
Licensed by Dubai DET · Licence 1394564
At a glance
- The pricing standard for related-party dealings
- Arm’s length
- Disclosure filed with the return where required
- TP form
- Master and local, for larger businesses and groups
- Two files
- Status depends on transfer pricing compliance
- QFZP
Your group’s internal prices are now part of your tax return
Under the Corporate Tax Law, transactions with related parties must be priced as if the parties were independent — the arm’s-length principle — and payments to connected persons, such as owners and directors, are deductible only to the extent they reflect market value. Domestic dealings count too, such as sales between a mainland company and a sister company in a free zone. Where the rules require, a disclosure form goes with your return, and larger businesses and members of large multinational groups must keep a master file and local file.
Smartgic maps every related-party and connected-person flow, analyses who does what and carries which risks, and selects the most appropriate pricing method. We run benchmarking studies, draft intercompany agreements and a transfer pricing policy, prepare the disclosure form with your return, and build master and local files where you need them. For free zone companies, we check transfer pricing as one of the conditions for QFZP status, so your 0% isn’t lost on a pricing point.
Key facts
- The pricing standard for related-party dealings
- Arm’s length
- Disclosure filed with the return where required
- TP form
- Master and local, for larger businesses and groups
- Two files
- Status depends on transfer pricing compliance
- QFZP
Everything covered in Transfer Pricing
The concrete scope our team delivers, grouped the way we actually run your file.
Analysis & Benchmarking
Evidence that your prices are at arm’s length.
- Related-party and connected-person mapping
- Functional and risk analysis
- Method selection and economic analysis
- Benchmarking studies with comparable data
- Intercompany loan and service fee pricing
Documentation & Filing
The documents the rules ask for, kept consistent.
- Transfer pricing disclosure form, where required
- Master file and local file, where required
- Intercompany agreements
- Group transfer pricing policy
- Year-end adjustment calculations
Ongoing Support
Keeping the position current as the business changes.
- Annual documentation refresh
- QFZP transfer pricing condition review
- Connected-person payment reviews
- Pricing for new transactions or restructures
- Support with FTA documentation requests
What you gain with Transfer Pricing
The practical difference when the work is planned and filed properly the first time.
Every Flow Mapped
Goods, services, loans, cost sharing, management fees and owner payments are listed across the group, so your disclosure starts from a complete picture.
Benchmarks You Can Show
Prices and margins are tested against comparable independent data using a recognised method, giving you an arm’s-length range the FTA can follow.
Agreements That Match Reality
Intercompany agreements are drafted to reflect what each entity actually does, because the FTA looks at conduct as well as contracts.
Disclosure That Matches the Return
We confirm whether the transfer pricing disclosure form applies to you and prepare it from the same figures as your corporate tax return.
Files Ready on Request
Where you must keep a master file and local file, they are prepared and updated so you can provide them when the FTA asks.
QFZP Condition Supported
Free zone companies dealing with related mainland entities get pricing and documentation that support the transfer pricing condition for 0% treatment.
A clear process, step by step
One adviser owns your file from first call to completion, and you always know which step you are on.
- 01
Transaction Mapping
We chart your group and connected persons, then list every transaction between them — type, value, direction and terms — for the tax period under review.
- 02
Functional Analysis
Through interviews and documents, we establish the functions each entity performs, the assets it uses and the risks it bears — the basis for choosing a pricing method.
- 03
Benchmarking
We select the most appropriate method — such as comparable uncontrolled price, cost plus or transactional net margin — and test your pricing against comparable independent data.
- 04
Documentation & Disclosure
We draft intercompany agreements and your transfer pricing policy, prepare the disclosure form with your return where required, and build the master file and local file where you need them.
- 05
Annual Review
Each year we update the analysis for new transactions and results, recommend any year-end adjustments, and keep the file ready for an FTA request.
Who it’s for and what you’ll need
Have these ready and we can move quickly. If something is missing, we will tell you what the authority accepts instead.
Who transfer pricing affects
- Groups whose companies sell goods or services to each other or share costs
- Businesses that lend to, borrow from or provide credit support to related parties
- Companies paying salaries, fees or rent to owners, directors or their relatives
- Free zone companies with related mainland entities, especially those claiming QFZP status
- Larger businesses and members of large multinational groups that must keep a master file and local file
Documents we’ll need
- Group structure chart with ownership percentages
- List of related parties and connected persons
- Intercompany agreements, invoices and loan documents
- Financial statements for each entity involved
- Details of salaries, fees and other payments to owners and directors
- Description of each entity’s activities, staff and key assets
- Any existing transfer pricing policy or earlier documentation
Need documents attested or translated? Our document clearing team can help.
Transfer Pricing questions
Straight answers to what clients ask us most. If yours is not here, ask us directly.
Yes. UAE transfer pricing rules aren’t limited to cross-border dealings. A mainland company trading with a sister company in a free zone, two companies controlled by the same owner, or a company paying its shareholder a management fee are all within scope. Domestic transactions still need arm’s-length pricing and, where the rules require, appear on the disclosure form filed with your return.
It is a schedule submitted with your corporate tax return, setting out transactions with related parties and payments to connected persons by type and value. Whether you need to file it depends on the value of those transactions, against thresholds set by the authority. We confirm whether it applies for each period and prepare it from the same figures as your return.
Larger businesses and members of large multinational groups must keep a master file, describing the group and its pricing policies, and a local file covering the UAE entity’s own transactions — and provide them when the FTA asks. The thresholds are set by ministerial decision, and we check where you stand each year. Businesses below them still need evidence that their prices are at arm’s length.
A benchmarking study compares your prices or margins with those of independent businesses in comparable transactions, usually drawn from commercial databases. The result is an arm’s-length range: if your pricing falls inside it, you have evidence to support it; if it falls outside, an adjustment may be needed. The study records the method chosen, the search process and why each comparable was kept or rejected.
Complying with the transfer pricing rules is one of the conditions for QFZP status, alongside adequate substance, qualifying activities and income, audited financial statements and not electing the standard rate. Dealings with related mainland companies need particular care, because pricing them too favourably shifts profit into the 0% entity. We review and document those prices so the condition can be evidenced.
Yes. Owners, directors and their relatives are connected persons, and payments to them — salaries, bonuses, consultancy fees, rent — are generally deductible only to the extent they reflect the market value of what was provided. Any excess is added back in the computation. We benchmark these payments and, where the rules require, include them on the disclosure form.
Related services
Most clients combine these. We run them as one engagement with a single point of contact.
Let’s plan your next move
Tell us what you are planning. An adviser will come back with the route, the documents and an itemised quote — no obligation, no pressure to commit.
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