UAE Corporate Tax: In 'transfer pricing' update, companies with at least Dh200m must maintain documents
Group entities with at least Dh200m must maintain documentation
Dubai: The long-awaited updates related to Transfer Pricing under the UAE Corporate Tax has been issued by the Ministry of Finance.
The Ministerial Decision No (97) of 2023 relate to the requirements for maintaining transfer pricing documentation.
The decision specifies instances where taxpayers must maintain transfer pricing documentation, specifically a master file and a local file, if they have revenues in a relevant tax period of at least Dh200 million or they are part of a multinational group with a total consolidated group revenue of at least Dh3.15 billion in the relevant tax period.
The decision outlines the transactions or arrangements that will be included in the local file.
The Federal Decree Law No (47) of 2023 enforces transfer pricing rules and documentation requirements to ensure the pricing of transactions between related parties and connected persons - such as companies that are part of the same multinational enterprise - are not influenced by their relationships.
“The transfer pricing documentation requirements aim to ensure taxpayers can prove the arm's length basis for pricing their transactions with related parties and connected persons using standardized files," said Younis Haji Al Khouri, Undersecretary of the Ministry of Finance.
"Additionally, to reduce the compliance burden on taxpayers, the Decision defines the threshold for preparing master files and local files and the exclusions for disclosing certain transactions."
The transfer pricing documentation requirements will help ease 'compliance burdens for SMEs'.