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Transfer Pricing Documentation in the UAE, Built to Hold Up on Both Sides

Master file, local file and the Disclosure Form, prepared from one analysis that also supports the counterparty's filing in India, Singapore or elsewhere. For mainland groups, free zone entities and UAE subsidiaries of foreign parents.

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  • Master file and local file
  • Transfer Pricing Disclosure Form
  • Benchmarking studies
  • India, UAE and Singapore groups

Documentation Requirements

Which transfer pricing documents does your UAE entity need?

The UAE follows the OECD three-tier model, with a disclosure schedule added to the Corporate Tax return. Which pieces apply depends on entity revenue, group revenue and the value of related party flows.

Document Required when How it reaches the FTA
Master fileUAE entity revenue of AED 200m or more, or group revenue of AED 3.15bn or moreKept ready; submitted within 30 days of a request
Local fileSame thresholds as the master fileKept ready; submitted within 30 days of a request
Transfer Pricing Disclosure FormRelated party transactions above AED 40m in the periodFiled with the Corporate Tax return
Country-by-Country ReportUAE-headquartered group with revenue of AED 3.15bn or moreFiled annually by the reporting entity
Arm's length supportEvery entity with related party or connected person transactionsKept on file and produced if queried

Review Hotspots

Transactions that draw the closest review

Most UAE transfer pricing questions come back to a handful of transaction types. These are the ones where documentation does the most work.

  • Management and shared service fees from a parent

    What a reviewer wants to see

    Evidence the service was received and benefited the UAE entity, and a markup that matches the parent's own filing

  • Intra-group loans and cash pooling

    What a reviewer wants to see

    An interest rate supported by the borrower's credit standing, with terms an independent lender would accept

  • Free zone to mainland sales

    What a reviewer wants to see

    Pricing that supports qualifying income without moving mainland profit into the free zone

  • Brand, technology and royalty charges

    What a reviewer wants to see

    Clarity on who develops, owns and controls the intangible

  • Cost recharges at no markup

    What a reviewer wants to see

    A clear case that the activity is a pass-through rather than a service

  • Year-end adjustments

    What a reviewer wants to see

    An adjustment agreed in advance, booked consistently on both sides

Free Zone Entities

Free zone entities and the arm's length condition behind the 0% rate

For a Qualifying Free Zone Person, transfer pricing is part of the qualifying test itself. Arm's length pricing on related party transactions, and the Article 55 documentation rules, sit among the conditions for keeping the 0% rate on qualifying income.

That changes how documentation is approached. A free zone entity below the AED 200 million threshold may have no master file or local file obligation, yet still needs a clear record of how its intercompany prices were set, because the qualifying status depends on it. IMC reviews transfer pricing and qualifying status together so the two analyses support each other.

Why it matters

A free zone person that fails a qualifying condition loses the 0% rate for that tax period and the four that follow. The pricing file is what demonstrates the condition was met.

  • 0%Rate on qualifying income that depends on the condition
  • 1 + 4The failed tax period and the four that follow

Our Services

What the engagement covers

  • Transfer pricing diagnostic

    Related party flows mapped and tested against every threshold, with gaps listed in priority order.

  • Functional analysis

    Functions, assets and risks of each entity documented from interviews with the people who run them.

  • Benchmarking

    Comparable searches with a documented strategy, rejection log and arm's length range.

  • Master file and local file

    Prepared in the FTA's expected form, consistent with the group's consolidated accounts.

  • Disclosure Form

    Transactions classified and reconciled to the financial statements before the Corporate Tax return is filed.

  • Intercompany agreements

    Agreements drafted or refreshed so the contract matches the conduct described in the files.

  • Policy and year-end true-up

    A pricing policy finance teams can operate during the year, with a defined true-up process.

  • FTA query support

    Responses to information requests drawn directly from the documentation already on file.

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Cross-Border Groups

Built for groups with a parent outside the UAE

Where the parent sits in India, a management fee or royalty is tested in the UAE as a cost and in India's Form 3CEB as income. Where it sits in Singapore, the same applies under Singapore's documentation rules.

IMC builds the functional analysis and benchmark once, then adapts it for each authority, so the group defends one set of numbers. The wider picture, including Pillar Two, is set out on the international tax services in the UAE page.

  • UAE side

    Tested as a cost in the UAE local file

  • India side

    Tested as income in Form 3CEB

One set of numbers

The functional analysis and benchmark are built once and adapted for each authority.

  • INIndia
  • AEUAE
  • SGSingapore

How We Work

How the work runs

  1. Map

    Entities, transactions and thresholds confirmed from the trial balance and ledgers.

  2. Analyse

    Functional analysis, method selection and benchmarking for each transaction type.

  3. Document

    Files, Disclosure Form and agreements prepared and reconciled to the accounts.

  4. Refresh

    Annual update of financials, comparables and policy as the business changes.

Technical Summary

UAE transfer pricing technical summary

A working reference for finance teams: thresholds, what goes in each file, Disclosure Form rules and a year-end checklist. Free to download: share a few details and we will email the PDF to you.

Transfer pricing

UAE Transfer Pricing Documentation: Technical Summary 2026

Thresholds, file contents, the Disclosure Form, free zone conditions and a year-end checklist.

  • Thresholds
  • File contents
  • The Disclosure Form
  • Free zone conditions
  • Year-end checklist
Get the PDF by email Free to download

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One pricing story, told the same way in every jurisdiction

A transfer pricing review with IMC maps related party flows, confirms which documents apply and sets out what each UAE entity needs before its next Corporate Tax return.

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FAQs

Under Ministerial Decision No. 97 of 2023, a taxable person must maintain both a master file and a local file for a tax period if its own revenue in that period is AED 200 million or more, or if it is a constituent entity of a multinational group with consolidated revenue of AED 3.15 billion or more. The local file covers transactions with related parties and connected persons, with certain domestic transactions excluded. Entities below both thresholds still need evidence that their related party pricing meets the arm’s length standard.

The master file and local file are not filed with the Corporate Tax return. They must be kept ready and submitted to the Federal Tax Authority within 30 days of a request, or within any longer period the Authority allows. In practice, 30 days is too short to build a benchmarking study from nothing, so groups that meet the thresholds generally prepare the files at or soon after year end. Preparing them contemporaneously also means the analysis reflects how the business actually operated during the year.

The Transfer Pricing Disclosure Form is submitted with the Corporate Tax return and summarises transactions with related parties and connected persons. Current guidance requires disclosure where total related party transactions for the period exceed AED 40 million, with each transaction category above AED 4 million reported. Payments and benefits to connected persons above AED 500,000 are also disclosed. The form itself is short, but its figures need to reconcile with the financial statements and with any master file or local file, so it is best prepared alongside them.

Yes. The arm’s length principle applies to related party transactions whether the counterparty is in the UAE or overseas, and whether it sits on the mainland or in a free zone. The local file requirement is narrower for purely domestic transactions, and certain transactions between resident persons taxed at the same rate are excluded from it. Transactions between a mainland company and a Qualifying Free Zone Person, or with an entity taxed at a different rate, remain in scope and tend to attract the most attention. For groups above EUR 750 million, year-end pricing adjustments also feed into the 15% Domestic Minimum Top-up Tax calculation.

A management fee charged by an Indian parent to its UAE subsidiary needs evidence that the services were actually rendered, that they benefited the UAE entity, and that the charge reflects what an independent party would pay. That means service descriptions, time or cost records, the allocation key and the markup applied. The same fee is reviewed in India as income, so the method and markup should match what the parent reports in Form 3CEB. Shareholder activities, such as group-level governance, should be left out of the charge.

It does. Compliance with the arm’s length principle and with the documentation requirements in Article 55 of the Corporate Tax Law are among the conditions a free zone person must meet to keep the 0% rate on qualifying income. If a free zone person fails a condition, it loses qualifying status for that tax period and the following four. For this reason, free zone entities with related party transactions usually maintain supporting analysis even where they fall below the master file and local file thresholds.
The UAE regime follows the OECD Transfer Pricing Guidelines, and the Corporate Tax Law recognises five methods, from the comparable uncontrolled price method to the transactional profit split method. The method should be the most appropriate one for the facts and the available data, rather than one chosen from a fixed hierarchy. Because local UAE comparables are limited, benchmarking studies usually draw on regional or global databases, and the search strategy, rejection reasons and arm’s length range need to be documented clearly enough for a reviewer to follow.
The FTA’s Transfer Pricing Guide adopts the simplified approach for low value-adding intra-group services set out in Chapter VII of the OECD Guidelines. Where services such as routine accounting, HR administration or IT support qualify, a group can apply a cost-plus markup without a full benchmarking search, provided it documents the nature of the services, the cost pool and the allocation keys. Services involving core business activity, risk control or unique know-how do not qualify, so the classification itself has to be recorded carefully.
An entity below the master file, local file and disclosure thresholds still has to price related party transactions at arm’s length. If the FTA questions a transaction, the entity needs to show how the price was set. At that scale, a short internal memo describing the transaction, the method used and the supporting data is usually enough, together with signed intercompany agreements. A light file of this kind is simple to maintain and makes it much easier to respond to a query, or to move into full documentation as the business grows.