UAE Law and Practice Contributed by: Marios Palesis, Theodora Charalambous and Giorgos Kinanis, Kinanis Tax Consultancy Middle East Limited
Kinanis Tax Consultancy Middle East Limited
Unit IH-00-01-01-OF-01 Level 01, Innovation One Dubai International Financial Centre UAE
Tel: +971 56 576 1818 Email: uae@kinanis.com Web: www.kinanisuae.com
1. Rules Governing Transfer Pricing 1.1 Statutes and Regulations Transfer pricing in the UAE is governed by the follow - ing laws, decisions and guides: • Federal Decree-Law No 47 of 2022 on the Taxation of Corporations and Businesses (the “Corporate Tax Law”), which introduces transfer pricing rules, sets out the arm’s length principle, defines related parties and connected persons, and establishes requirements for maintaining transfer pricing docu - mentation; • Ministerial Decision No 97 of 2023 on Require - ments for Maintaining Transfer Pricing Documen - tation for the purposes of the Corporate Tax Law, outlining thresholds and conditions for maintaining documentation; • the Transfer Pricing Guide (CTGTP1, October 2023), providing non-binding general guidance on the transfer pricing regime in the UAE; • Cabinet Resolution No 44 of 2020, introducing provisions for country-by-country reports in the UAE; and • the Advance Pricing Agreements Guide (CTGAPA1, December 2025), providing non-binding general guidance on procedural aspects of advance pricing agreements (APAs). 1.2 Current Regime and Recent Changes The UAE historically operated as a low-tax jurisdic - tion with no federal corporate income tax (subject to limited exceptions) and no comprehensive transfer pricing rules in place.
With the introduction of the Corporate Tax Law, the UAE first instituted its current transfer pricing regime as part of its shift towards a comprehensive corporate tax system. The Corporate Tax Law, along with the rules governing transfer pricing, became effective for tax periods starting on or after 1 June 2023. The transfer pricing rules are aligned with the OECD Transfer Pricing Guidelines, and can be found in Arti - cles 34–36 and 55 of the Corporate Tax Law. Article 34 sets out the arm’s length principle, methods to be chosen when determining arm’s length prices, as well as provisions with respect to adjustments on the taxable income of taxpayers engaging in controlled transactions not at arm’s length. Articles 35 and 36 define related parties and connected persons. Article 55 introduces transfer pricing documentation require - ments (ie, the preparation of a local file and master file), including a requirement to complete and submit a disclosure form along with the tax return. Following the enactment of the Corporate Tax Law, the Federal Tax Authority (FTA) issued a non-binding Transfer Pricing Guide providing guidance on transfer pricing rules in the UAE, while Ministerial Decision No 97 of 2023 sets out conditions for maintaining trans - fer pricing documentation. The Decision introduced relevant thresholds for maintaining a local file and a master file, as follows: • where the taxpayer is a constituent company of a multinational enterprise (MNE) group with consoli - dated group revenue of AED3.15 billion or more in the relevant tax period; or
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