UAE Law and Practice Contributed by: Amir Alkhaja, Areen Jayousi, Gulsun Ozmen and Alia AlMarzooqi, Habib Al Mulla & Partners
ance companies and certain other regulated financial entities. 5.6 Transfer Pricing Transfer pricing rules apply under the corporate tax regime, and all transactions between related par - ties and connected persons must be conducted on an arm’s-length basis in accordance with the OECD Transfer Pricing Guidelines. Taxpayers meeting pre - scribed thresholds are required to maintain transfer pricing documentation at the master file and local file level, and to disclose related-party transactions in their annual tax returns. Country-by-country reporting obligations apply to UAE-headquartered multinational enterprise groups with consolidated global revenues of AED3.15 billion or more. 5.7 Anti-Evasion Rules The corporate tax law contains a general anti-avoid - ance rule (GAAR), which empowers the Federal Tax Authority to disregard or recharacterise arrange - ments that lack genuine commercial substance and are entered into with the principal purpose of obtain - ing a tax advantage that is contrary to the object and purpose of the law. Additionally, the UAE’s Economic Substance Regu - lations require entities conducting certain “relevant activities”, including banking, insurance, investment fund management, finance and leasing, and holding company activities, to demonstrate genuine eco - nomic substance in the UAE by reference to manage - ment and control, qualified employees and operating expenditure, with non-compliance attracting penalties and possible disclosure to foreign competent authori - ties. 5.8 Tariffs The UAE is a member of the GCC Customs Union and applies the GCC Common External Tariff, which sets a standard rate of 5% on most imported goods. Certain categories attract a 0% rate, including basic foodstuffs, medicines and agricultural inputs, while tobacco and tobacco products are subject to a cus - toms duty of 100% and alcoholic beverages to 50%.
The UAE has concluded a number of bilateral free trade agreements in recent years, most notably with India (effective May 2022) and Israel (effective April 2023), providing preferential tariff treatment for quali - fying goods originating from those countries; further agreements are under active negotiation. The UAE’s tariff environment has also been affected by US tariff measures introduced from early 2025, and the UAE government has engaged with the US administration with a view to exploring a bilateral trade agreement that could provide greater certainty for businesses operating across both markets. Merger control in the UAE is governed by Federal Decree Law No 36 of 2023 on the Regulation of Com - petition (the “Competition Law”), supplemented by Cabinet Decision No 3 of 2025 concerning thresholds for economic concentration filings and its subsequent executive and implementing regulations clarifying noti - fication procedures and merger filing requirements. The Ministry of Economy is the competent author - ity for merger control review on the UAE mainland. Certain regulated sectors including banking, financial services, insurance and telecommunications fall out - side the scope of the general Competition Law and are instead subject to the merger review frameworks, if any, maintained by their sector regulators. Economic activities conducted within UAE free zones are gener - ally also excluded from scope. Notification Thresholds 6. Competition Law 6.1 Merger Control Notification Legislative Framework Cabinet Decision No 3 of 2025 introduced two alter - native triggering thresholds for mandatory pre-closing notification: • a turnover threshold, where the combined turno - ver of the parties to the concentration equals or exceeds AED300 million in the relevant UAE mar - ket; and • a market share threshold, where the combined market share of the parties equals or exceeds 40% of the relevant market in the UAE.
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