Transfer Pricing
Transfer Pricing in the UAE
UAE transfer pricing explained from the law itself: the arm's length test, who counts as a related party, the five methods, and every documentation threshold.
transfer pricing
Transfer pricing rules require UAE businesses to price transactions with related parties and connected persons as if they were dealing with strangers. Articles 34 to 36 of Federal Decree-Law No. 47 of 2022 impose the arm's length standard on every taxable person, with no revenue threshold. Thresholds decide only how much documentation you must keep and disclose.
Basis: UAE Ministry of Finance
- Arm's length standard applies from
- Every related-party transaction, no minimum size
- Master file and local file — revenue test
- AED 200,000,000 or more in the tax period
- Master file and local file — MNE group test
- AED 3,150,000,000 consolidated group revenue
- Related party disclosure in the tax return
- Aggregate transactions above AED 40 million
- Connected person disclosure
- Aggregate above AED 500,000
- Deadline to hand documentation to the FTA
- 30 days from the request
- Ownership or control threshold for related parties
- 50%
Article 34(1), Federal Decree-Law No. 47 of 2022
Article 2(1)(b), Ministerial Decision No. 97 of 2023
Article 2(1)(a), Ministerial Decision No. 97 of 2023
Section 16.1, Corporate Tax Guide CTGTXR1
Section 16.2, Corporate Tax Guide CTGTXR1
Article 55(3), Federal Decree-Law No. 47 of 2022
Article 35, Federal Decree-Law No. 47 of 2022
#The arm's length principle, in plain terms
Two unrelated businesses negotiating a price each push in opposite directions, and the price that survives is a market price. Two companies under the same owner have no such tension — one can charge the other anything, and the group's total profit stays the same while the profit lands wherever the owner prefers. Transfer pricing rules exist to remove that choice for tax purposes.
Article 34(1) of the Corporate Tax Law states the test directly: in determining taxable income, transactions and arrangements between related parties must meet the arm's length standard. Article 34(2) then defines it — the transaction meets the standard if its results are consistent with what would have been realised had persons who were not related parties engaged in a similar transaction under similar circumstances.
Nothing in Article 34 mentions revenue, group size, or free zone status. The pricing obligation applies to every taxable person with a related-party transaction. What the thresholds later in this page decide is something narrower: how much paperwork you must keep, and how much of it you must volunteer on the return.
A worked example
A Dubai holding company owns a manufacturer in one country and a distributor in the UAE. The manufacturer sells goods to the distributor for AED 100 a unit; the distributor resells at AED 150.
If independent distributors doing the same work in the same market earn a 12% net margin, and the UAE distributor's arrangement leaves it with 33%, the FTA can ask why. If the answer is that the UAE entity performs the functions, bears the risks and owns the intangibles that justify that return, the price stands. If it does not — if the UAE entity is a limited-risk reseller earning a principal's margin — the price is not arm's length, and Article 34(8) allows the FTA to adjust taxable income to the result that best reflects the facts.
The adjustment runs both ways in principle. Article 34(10) requires the FTA to make a corresponding adjustment to the related party's taxable income where it adjusts one side, and Article 34(11) lets a taxable person apply to the FTA for a corresponding adjustment when a foreign tax authority has adjusted the other side.
#The five methods, and how to pick one
Article 34(3) lists five transfer pricing methods and requires the arm's length result to be determined using one or a combination of them. Article 34(4) allows a different method only where the taxable person can demonstrate that none of the five can reasonably be applied, and that the alternative still satisfies the arm's length standard in Article 34(2).
There is no hierarchy in which one method automatically wins. Article 34(5) instead requires the choice to be made having regard to the most reliable method, taking into account the contractual terms, the characteristics of the transaction, the economic circumstances, the functions performed, assets employed and risks assumed, and the business strategies of the parties.
That functional analysis is the substance of the exercise. A method chosen without one is a label, not an answer.
| Method | What it compares |
|---|---|
| Comparable uncontrolled price | The price charged in a comparable transaction between independent parties |
| Resale price | The resale margin earned by a reseller, working back from the price to an independent customer |
| Cost plus | The mark-up on costs earned by a supplier of goods or services |
| Transactional net margin | The net profit indicator relative to an appropriate base, such as costs, sales or assets |
| Transactional profit split | The division of combined profit between the parties, by reference to their contributions |
#Benchmarking, comparables and the arm's length range
Once a method is chosen, the arm's length result usually comes from a benchmarking study: a search for independent companies or transactions that resemble the tested one closely enough to be informative.
Article 34(7) recognises that this produces a range rather than a single number — application of the selected method may result in an arm's length range of financial results or indicators acceptable for establishing the arm's length result. Article 34(8) then provides the consequence: where the result falls outside that range, the FTA shall adjust taxable income to the arm's length result that best reflects the facts.
Which database, and which comparables
The FTA's Transfer Pricing Guide (CTGTP1) states that the Authority does not have a preference for any particular commercial database, as long as it provides a reliable source of information for the comparability analysis — subject to one condition that is often missed. The order for applying comparables is local, then regional (Middle East), then other regions.
That ordering matters for a UAE benchmarking study. A search that jumps straight to European or North American comparables without first testing local and regional data is not following the guide, even if the resulting range looks respectable. The guide also notes that where a taxable person has used a private database, the FTA may request access to it under Article 55(4) to review the results.
The interquartile range
CTGTP1 discusses the use of statistical measures to narrow a set of comparables, and describes acceptance of the interquartile range as an appropriate approach where the comparables are of similar reliability but some imperfection remains.
A range is not a licence to sit at the edge of it. Where the FTA adjusts under Article 34(8), the adjustment is to the point that best reflects the facts and circumstances of the transaction — not automatically to the nearest boundary of the range.
#The documentation thresholds: master file and local file
Article 55(2) of the Corporate Tax Law requires a taxable person to maintain both a master file and a local file where its related-party and connected-person transactions meet conditions prescribed by the Minister. Those conditions are set by Ministerial Decision No. 97 of 2023, issued 27 April 2023.
Article 2(1) of that decision sets two alternative tests. Either one triggers the obligation.
| Test | Threshold | Applies when |
|---|---|---|
| MNE group test | AED 3,150,000,000 or more | The taxable person was, at any time in the tax period, a constituent company of a multinational enterprises group as defined in Cabinet Decision No. 44 of 2020, with that consolidated group revenue in the period |
| Standalone revenue test | AED 200,000,000 or more | The taxable person's own revenue in the relevant tax period reaches the threshold |
What goes in the local file — and what stays out
Article 2(2) of Ministerial Decision No. 97 of 2023 requires the local file to include transactions with four categories of counterparty: a non-resident person, an exempt person, a resident person that has made an election under Article 21 of the Corporate Tax Law and meets its conditions, and a resident person whose income is subject to a different corporate tax rate from the taxable person's.
Article 2(3) then excludes four categories: resident persons other than those just listed; a natural person, provided the parties act as if independent of each other; a juridical person that is related or connected solely by being a partner in an unincorporated partnership, on the same proviso; and a permanent establishment of a non-resident person in the State whose income is taxed at the same rate as the taxable person's.
The practical effect is that ordinary domestic group transactions between two 9%-taxed UAE companies generally stay out of the local file — but transactions with a qualifying free zone person, taxed at a different rate, come in.
The 'acting as if independent' test
The exclusions for natural persons and partnership-only relationships depend on the parties acting as if they were independent. Article 2(4) of the decision sets two cumulative conditions: the transaction is undertaken in the ordinary course of business, and the parties are not exclusively or almost exclusively transacting with each other.
Article 2(5) adds a disqualifier. Where the activities of one person are subject to detailed instruction or comprehensive control by the other, they are not regarded as acting independently. Article 2(6) gives the FTA the ability to weigh all relevant facts and circumstances in making that call.
What each file contains
CTGTP1 follows the OECD structure. The master file gives a group-level overview — organisational structure, business description, intangibles, intercompany financial activities, and the group's financial and tax positions, including a list of existing unilateral advance pricing agreements and other rulings.
The local file follows Annex II to Chapter V of the OECD Transfer Pricing Guidelines and goes deeper on the entity: management structure and organisation chart, business and business strategy, key competitors, then for each material category of controlled transaction a description, a functional analysis, the chosen method and tested party, and the financial information supporting it.
Both are to be prepared and maintained contemporaneously — that is, at the time, not reconstructed after a request arrives.
#What you must disclose on the corporate tax return
Documentation and disclosure are separate obligations with separate thresholds, and a business can easily fall under one and over the other.
Article 55(1) of the Corporate Tax Law lets the FTA require a disclosure filed with the tax return covering transactions and arrangements with related parties and connected persons. The FTA's Tax Returns Guide (CTGTXR1) sets out how that works in the return itself.
| Schedule | Trigger | What must then be reported |
|---|---|---|
| Related party transactions | Aggregate value of all transactions with all related parties, recorded in the financial statements or at market value, exceeds AED 40 million | Each category of transaction where the aggregate value with all related parties exceeds AED 4 million |
| Connected persons | Aggregate value of transactions with connected persons, including their related parties, exceeds AED 500,000 | Each connected person where the aggregate payment or benefit exceeds AED 500,000, together with its related parties |
Transaction categories in the schedule
The AED 4 million per-category test uses the transaction types in the return's drop-down list: goods, services, intellectual property, interest, assets, liabilities, and other. Gross income and expenditure are reported separately rather than netted, for each related party in aggregate by type.
This is why a business with modest net intra-group exposure can still have a substantial disclosure. Gross flows in both directions count.
Adjustments in the return
Upward adjustments — those that increase taxable income because a transaction was not at arm's length — are entered in the return and must not be netted off against downward adjustments.
Downward adjustments are treated very differently. CTGTXR1 states that any transfer pricing adjustment that decreases taxable income is allowed only upon a successful application to the FTA, and that if the downward adjustment is not approved, the amount entered is nil. Assuming symmetry here is a common and expensive mistake.
#Country-by-Country Reporting
CbCR is the third tier of transfer pricing documentation under BEPS Action 13, and in the UAE it predates the corporate tax regime. It was introduced by Cabinet Resolution No. 44 of 2020, and CTGTP1 confirms it continues to operate alongside the master file and local file requirements.
The report is a standardised template following Annex 3 to Chapter V of the OECD Transfer Pricing Guidelines, in three tables: quantitative information per tax jurisdiction, qualitative information on each constituent company's main business activities, and additional explanatory information.
Per CTGTP1, the UAE CbCR requirements apply to MNE groups headquartered in the UAE with consolidated group revenue equal to or above AED 3.15 billion during the fiscal year immediately preceding the reporting fiscal year. The ultimate parent entity submits a CbCR notification no later than the last day of the fiscal year, and files the report itself no later than twelve months after the last day of each reporting year.
#Deadlines, and the 30-day clock that catches people out
There is no annual filing date for the master file and local file. They are not submitted routinely — they are produced on demand, and that is precisely what makes the timing dangerous.
Article 55(3) of the Corporate Tax Law requires documentation to be submitted to the FTA within 30 days following a request, or by any later date the Authority directs. Article 55(4) applies the same 30-day clock to any other information requested to support the arm's length nature of a transaction. CTGTP1 confirms the 30-day period, noting a longer period is possible if agreed by the FTA.
Thirty days is not enough time to run a benchmarking study, build a functional analysis and write two files from scratch. That is the point of the contemporaneous requirement: the documentation is meant to exist before the request arrives.
Establish whether you are in scope at all
Every taxable person with related-party transactions is subject to Article 34 pricing. Separately, test revenue against the AED 200 million standalone threshold and group revenue against AED 3.15 billion for the file obligation.
Map the counterparties
Apply the Article 35 ownership and control tests, and the Article 36 owner-and-director tests. Identify which counterparties fall in and out of the local file under Article 2(2) and 2(3) of Ministerial Decision No. 97 of 2023.
Run the functional analysis before choosing a method
Functions performed, assets employed and risks assumed drive the method choice under Article 34(5). Selecting a method first and justifying it afterwards is the failure mode the FTA's review under Article 34(6) is designed to find.
Benchmark in the prescribed order
Search local comparables first, then regional Middle East, then other regions, and document why each step was necessary. Keep the search strategy, the rejection reasons and the final set.
Prepare the files contemporaneously
Write the master file and local file for the tax period as it closes, not when a request lands. Keep supporting records for seven years after the end of the tax period, as Article 56 requires.
Complete the return schedules
Test the AED 40 million and AED 500,000 disclosure triggers separately from the documentation thresholds, and complete the related party and connected person schedules where they apply.
#Advance pricing agreements
Article 59(1) of the Corporate Tax Law provides that a person may apply to the Authority for a clarification regarding the application of the law, or for the conclusion of an advance pricing agreement with respect to a transaction or arrangement proposed or entered into. Article 59(2) says the application is made in the form and manner prescribed by the Authority.
That statutory basis now has a published programme behind it. The FTA's Advance Pricing Agreements Guide, CTGAPA1, carries an issue date of 31 December 2025, and sets out an APA route being introduced in phases — unilateral APAs first, covering domestic and cross-border controlled transactions, with bilateral and multilateral APAs to follow once further guidance is issued.
Read in the primary PDF on 21 August 2026, the parameters are narrow. The guide asks for covered controlled transactions of at least AED 100 million per tax period (measured at tax-group level for a tax group), while stating that the threshold is an indicator of materiality rather than an absolute rule. An APA runs for a minimum of three and a maximum of five tax periods, and at this initial stage covers prospective periods only — it is not a remedy for a historic pricing position already on a filed return. The application carries a non-refundable fee of AED 30,000, reduced to AED 15,000 on renewal, with no refund if the application is rejected or withdrawn.
The process runs pre-filing consultation first, then application within two months of the FTA's approval of the pre-filing, or at least twelve months before the start of the first covered tax period, whichever is earlier. Where the FTA asks for more information, the guide expects it within 40 business days, and any change to or breach of the APA's critical assumptions must be notified within 20 business days.
One restriction is worth flagging separately: the guide states that an APA request may be filed only by the person itself, its legal representative, or a tax agent registered for corporate tax purposes with the FTA — and that a request from anyone else is not accepted. For a tax group, only the parent company may file. Submissions run by email to the address the Authority publishes in the guide from 30 December 2025, with EmaraTax filing to open on a date the FTA says it will announce; as at 21 August 2026 that date had not been announced, so do not assume the portal route is live.
#Where the official guidance actually lives
A large share of UAE transfer pricing searches are simply people trying to find the source documents — 'transfer pricing uae pdf', 'transfer pricing guidelines uae', 'uae transfer pricing guidance'. All of them are free, and none of them require an intermediary.
The Transfer Pricing Guide (CTGTP1), issued October 2023, is the FTA's main guidance document and runs to 140 pages. It states that it takes into account the January 2022 OECD Transfer Pricing Guidelines, that taxable persons should rely primarily on the UAE legislation, and that the OECD guidelines may be referred to where an issue is not addressed in the guide itself.
The Tax Returns Guide (CTGTXR1) carries the return-level disclosure mechanics, including the schedules described above. The Corporate Tax Law and Ministerial Decision No. 97 of 2023 are the binding instruments — the guides explain them but do not override them.
How the OECD guidelines fit
The UAE has not adopted the OECD Transfer Pricing Guidelines wholesale into law. CTGTP1 describes the arm's length principle as set forth in Article 9 of the 2017 OECD Model Tax Convention and takes the 2022 OECD Transfer Pricing Guidelines into consideration, while directing taxable persons to rely on the UAE provisions first.
The practical reading: where the Corporate Tax Law, Ministerial Decision No. 97 of 2023 and CTGTP1 address a point, they govern. Where they are silent, the OECD guidelines are the reference the FTA itself points to.
#Choosing an adviser, and what to ask them
Searches for transfer pricing consultants, firms and services in the UAE are among the most common in this topic, and the honest answer is that the market runs from the Big Four through mid-tier networks to small local practices, with very different capabilities behind similar-looking service pages.
We are not going to rank firms or publish a list of the best ones. We have no basis for such a ranking that would survive scrutiny, and neither does any page that offers you one.
What we can offer is the set of questions that separates a real transfer pricing capability from a compliance shop that outsources the analysis:
Questions worth asking
- Which commercial database will you use, and will you search local and regional comparables before wider ones, as CTGTP1 requires?
- Will the functional analysis be based on interviews with the people who actually perform the functions, or on the legal agreements alone?
- Who writes the local file — the person doing the benchmarking, or a separate team working from a template?
- If the FTA requests the file under Article 55(3), what does your 30-day response process look like, and is it included?
- Are you documenting the method rejection reasoning, or only the method selected?
A firm that answers the database-ordering question precisely has read the guide. That is a more useful signal than the size of the logo.
On the Big Four search terms
Queries naming EY, Deloitte, BDO and others in a UAE transfer pricing context are usually people looking for those firms' published guidance rather than for a comparison. Their alerts and summaries are generally accurate and worth reading, with one structural caveat that applies to all of them: an alert is dated to the decision it covers and is rarely revisited when a later instrument changes the position.
For anything that turns on a current threshold or deadline, go to the primary instrument. The links in the sources list below are the same ones the alerts are summarising.
#Transfer pricing as a career in the UAE
A meaningful share of UAE transfer pricing searches are not from businesses at all — they are from people looking for roles, salaries and training. That demand is real, and it deserves an honest answer rather than a recruitment pitch.
Transfer pricing work in the UAE sits mainly in the Big Four and larger mid-tier firms, in the in-house tax functions of large groups and holding structures, and in a small number of specialist boutiques. The work splits between documentation and benchmarking on one side and advisory, restructuring and controversy on the other. Backgrounds are mixed — economics and finance graduates alongside accountants — because the benchmarking work is closer to applied economics than to bookkeeping.
The regime is young. Corporate tax applies to financial years starting on or after 1 June 2023, which means UAE-specific transfer pricing experience is measured in a few years for almost everyone in the market, and demand has been shaped by the compliance cycle that followed.
On courses and certifications
There is no UAE government-accredited transfer pricing qualification. Training in this field comes from professional bodies, the OECD's own published materials, and commercial course providers — none of which carries official FTA endorsement.
Be sceptical of any course marketed as 'FTA-approved' or 'FTA-accredited'. We could find no such accreditation scheme published by the Authority. The FTA does maintain a register of approved tax agents, which is a different thing entirely and is not a transfer pricing credential.
Sources and legal basis
This page relies on
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
- Article 34 of the Corporate Tax Law (Arm's Length Principle)
- Article 35 of the Corporate Tax Law (Related Parties and Control)
- Article 36 of the Corporate Tax Law (Payments to Connected Persons)
- Article 55 of the Corporate Tax Law (Transfer Pricing Documentation)
- Article 56 of the Corporate Tax Law (Record Keeping)
- Article 59 of the Corporate Tax Law (Clarifications and advance pricing agreements)
- Ministerial Decision No. 97 of 2023
- Cabinet Decision No. 44 of 2020 on Organising Reports Submitted by Multinational Companies
- Federal Tax Authority (FTA)
- UAE Ministry of Finance
- Transfer Pricing Guide CTGTP1
- Tax Returns Guide CTGTXR1
- OECD Transfer Pricing Guidelines 2022
- OECD Model Tax Convention 2017
- Article 9 of the OECD Model Tax Convention
- BEPS Action 13
- Country-by-Country Reporting (CbCR)
- Master file
- Local file
- Comparable uncontrolled price method
- Resale price method
- Cost plus method
- Transactional net margin method
- Transactional profit split method
- Interquartile range
- Arm's length range
- Functional analysis
- Related Party
- Connected Person
- Constituent Company
- Multinational Enterprises Group
- Qualifying Free Zone Person
- Permanent Establishment
- Unincorporated Partnership
- Advance pricing agreement
- Corresponding adjustment
- AED 200,000,000 documentation threshold
- AED 3,150,000,000 group revenue threshold
- AED 40 million related party disclosure threshold
- AED 4 million per-category disclosure threshold
- AED 500,000 connected person disclosure threshold
- Advance Pricing Agreements Guide (CTGAPA1)
- Federal Decree-Law No. 47 of 2022 and its amendments (consolidated)UAE Ministry of Finance
- Ministerial Decision No. 97 of 2023 on Requirements for Maintaining Transfer Pricing DocumentationUAE Ministry of Finance
- Transfer Pricing Guide CTGTP1, October 2023Federal Tax Authority
- Transfer Pricing Guide CTGTP1 — landing pageFederal Tax Authority
- Tax Returns Corporate Tax Guide CTGTXR1, November 2024Federal Tax Authority
- Corporate Tax legislation indexFederal Tax Authority
- Advance Pricing Agreements Guide CTGAPA1, December 2025Federal Tax Authority
Rates, thresholds and deadlines change. Every figure above is linked to the authority that publishes it — if the two ever disagree, the authority is right and this page is out of date. Tell us and we will fix it.
Frequently asked questions
Is transfer pricing mandatory in the UAE?
Yes. Article 34 of Federal Decree-Law No. 47 of 2022 requires every taxable person to price transactions with related parties at arm's length, with no revenue threshold and no exemption for purely domestic groups. What thresholds control is documentation, not the pricing obligation itself. A business under AED 200 million in revenue still has to price correctly — it simply may not need a master file and local file.
What is transfer pricing with an example?
Transfer pricing is the pricing of transactions between companies under common ownership or control. If a UAE distributor buys goods from its own overseas manufacturing affiliate, the price they agree shifts profit between the two countries. The arm's length principle requires that price to match what independent parties doing the same work under the same conditions would have agreed, tested using one of the five methods in Article 34(3).
What is the UAE transfer pricing threshold?
There are several, and they do different jobs. Master file and local file obligations start at AED 200 million of the taxable person's own revenue, or AED 3.15 billion of consolidated MNE group revenue, under Ministerial Decision No. 97 of 2023. Return disclosure starts at AED 40 million of aggregate related-party transactions, with AED 4 million per category, and AED 500,000 for connected persons.
How does transfer pricing relate to UAE corporate tax?
Transfer pricing is a component of the corporate tax regime rather than a separate tax. Articles 34 to 36 sit inside Federal Decree-Law No. 47 of 2022 and operate by adjusting taxable income: where a related-party price falls outside the arm's length range, Article 34(8) lets the Federal Tax Authority adjust the taxable income used to compute the 9% corporate tax charge.
Who is exempt from UAE corporate tax?
Exemption is granted by Article 4 of the Corporate Tax Law and covers categories such as government entities, government-controlled entities, qualifying public benefit entities, qualifying investment funds and certain pension and social security funds, each subject to its own conditions. Exemption from corporate tax does not remove a counterparty from transfer pricing scope — transactions with an exempt person must be included in the local file.
Where can I download the UAE transfer pricing guide as a PDF?
The Federal Tax Authority publishes the Transfer Pricing Guide, reference CTGTP1, issued October 2023, free on tax.gov.ae. The Ministry of Finance publishes Ministerial Decision No. 97 of 2023 and the consolidated Corporate Tax Law on mof.gov.ae. Every source cited on this page is linked in the sources list below, and none of them requires payment or registration.
What do transfer pricing roles pay in the UAE?
We do not publish a figure, because we could not verify one. The salary bands repeated across UAE tax blogs trace back to recruitment surveys that are lead-gated, sign-up gated or blocked to automated access, so the underlying data cannot be checked. Speaking to recruiters who place transfer pricing roles specifically will give you a better answer than any published range we could responsibly repeat.