OECD TP Guidelines · UAE

Transfer Pricing Tool
for UAE

UAE transfer pricing rules, documentation requirements, and penalty regime. Free OECD-compliant benchmarking tool with arm's length range analysis.

OECD TPG · LIVEv2026.04TNMM

Arm's length range, documented.
Not just benchmarked.

Session
0x9D0C
Entity
FY 2026
Comparables
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inputs.conf
comparable_set.json
methodology.conf
01// engagement— OECD TPG ¶1.33-1.38
02entity_name=
03jurisdiction=
04fiscal_years=
05currency=
06transaction_type=
07tested_party_role=
08// method— OECD TPG Ch. II
09tp_method=
10profit_level_indicator=
formula: Operating Profit / Revenue
11// financials— tested party P&L
12revenue=€
13cogs=€
14opex=€
15operating_profit=€
16// comparable_set— OECD ¶3.35-3.54 · min 3, 6+ recommended
17iqr_standard=
Company nameOperating Margin%Year
01
02
03
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06
18// functional_analysis— OECD ¶1.51-1.106 (FAR)
Functional analysis coverage (tick each confirmed):
30
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37far.rationale=
Functional analysis · FAR + DEMPE (OECD ¶1.51-1.106)
19// method_selection_rationale— OECD Ch.II · most appropriate method
Method-selection criteria addressed:
40
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47method.rationale=
Method selection · OECD Ch.II most-appropriate-method
20// comparable_search_strategy— OECD Ch.III · database + screens
Search strategy documentation (OECD ¶3.31-3.54):
50
51
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54
55
57search.rationale=
Comparable search · OECD Ch.III (database + screens + rejection log)
21// comparability_adjustments— OECD ¶3.50-3.54
60adjustments.narrative=
Comparability adjustments · OECD ¶3.50-3.54
22// trend_analysis— OECD ¶3.75-3.79 · multi-year data
63prior_year_pli=%
64prior_financial_year=
Trend analysis · multi-year data (OECD ¶3.75-3.79)
23// documentation_tier— OECD Ch.V · BEPS Action 13
Three-tier documentation (BEPS Action 13):
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70documentation.rationale=
Documentation tier · Master file + Local file + CbCR (BEPS Action 13)
24// risk_warnings— rule engine · ISA 550 / OECD
Only 0 comparables in the final set — OECD ¶3.56 recommends a broader sample (typically 6+) to reduce selection bias.
OECD ¶3.56
No functional-analysis items confirmed — OECD ¶1.51 requires FAR analysis to establish comparability.
OECD ¶1.51
Risk warnings · 7-rule engine (ISA 550 / OECD)
25// disclosure_and_conclusion— IAS 24.18 · IFRS 12
Tick disclosure items addressed in FS notes:
80IAS 24.13-14
81IAS 24.18(a)
82IAS 24.18(b)
83IAS 24.18(c)-(d)
84IAS 24.23
85IAS 24.17
86IAS 24.13
87IAS 1.122
93prepared_by=
94reviewed_by=
99conclusion.narrative=
Disclosure + conclusion · IAS 24.18 + IFRS 12
awaiting input·0 comparables·TNMM€·Ctrl+E
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Tested Operating Margin
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TNMM · 0 comparables
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Arm's Length Status
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Interquartile Range
—
OECD (25th–75th)
Adjustment
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IQR-based
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Transfer pricing in UAE

The UAE introduced its first-ever federal corporate tax effective 1 June 2023, fundamentally changing the tax landscape for businesses operating in the Emirates. Federal Decree-Law No. 47 of 2022 established a 9% corporate tax rate on taxable income exceeding AED 375,000, with a 0% rate on income below this threshold. Free zone qualifying persons benefit from a 0% rate on qualifying income. Critically, the Corporate Tax Law includes comprehensive transfer pricing provisions aligned with the OECD Transfer Pricing Guidelines, making TP compliance a new requirement for UAE businesses with related-party transactions.

The UAE's TP rules follow the OECD arm's length principle and standard methodology, including the interquartile range (25th–75th percentile). Ministerial Decision No. 97 of 2023 specifies documentation requirements in three tiers: a Disclosure Form that all taxable persons with related-party transactions must file with their tax return, a Local File required for taxable persons with revenue ≥AED 200 million or related-party transactions ≥AED 40 million, and a Master File for groups with consolidated revenue ≥AED 3.15 billion. The documentation requirements broadly follow OECD Chapter V and require contemporaneous preparation.

The introduction of TP in the UAE creates specific challenges for businesses that previously operated without tax considerations influencing intercompany pricing. Many UAE businesses — particularly in trading, real estate, and services — have historically priced intercompany transactions without formal documentation or benchmarking analysis. The transition to a transfer pricing regime requires these businesses to: review existing intercompany arrangements, prepare functional analyses, select appropriate TP methods, identify comparable data, and prepare documentation. Free zone entities face particular complexity: transactions between a free zone person and a related mainland person must be arm's length to ensure the free zone's qualifying income benefits from the 0% rate. The FTA has indicated that it will take a pragmatic approach during the initial years of the regime, but businesses should not delay compliance.

UAE TP quick reference

Local TP Legislation
Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses (Corporate Tax Law), Ministerial Decision No. 97 of 2023 on Transfer Pricing Documentation
Tax Authority
Federal Tax Authority (FTA)
Documentation Threshold
TP documentation requirements apply to all taxable persons with related-party transactions exceeding specified thresholds. Master File required for groups with consolidated revenue ≥AED 3.15 billion (≈€750M — aligned with CbCR threshold). Local File required for taxable persons with revenue ≥AED 200 million or related-party transactions ≥AED 40 million. Disclosure Form required for all taxable persons with related-party transactions (filed with the tax return).
Percentile Range
25th–75th percentile
Penalty Regime
The UAE penalty framework for TP is still developing. Penalties under the Corporate Tax Law include: AED 500 per month for late filing of tax returns (max 24 months), penalties for tax shortfalls arising from TP adjustments under the general penalty provisions, and specific penalties for failure to maintain TP documentation as prescribed. The FTA is expected to issue further guidance on TP-specific penalties.

Common TP audit triggers in UAE

Transactions between free zone and mainland related parties

Significant intercompany service charges or management fees

Intercompany financing with non-market interest rates

UAE entity margins significantly different from comparables

Related-party transactions with group entities in zero-tax jurisdictions

High-value goods or commodity transactions between group entities

UAE vs. OECD guidelines: key differences

UAE follows OECD Guidelines closely as a new regime. Key features: (1) entirely new regime effective June 2023 — no historical TP enforcement precedent; (2) free zone/mainland interaction is unique to UAE; (3) AED 200M revenue / AED 40M related-party transaction thresholds for Local File; (4) pragmatic FTA approach expected during initial years; (5) 9% corporate tax rate creates lower stakes than high-tax jurisdictions but TP compliance is still mandatory.

Frequently asked questions: UAE transfer pricing

When did UAE transfer pricing rules come into effect?
UAE corporate tax (and TP rules) became effective on 1 June 2023. The Corporate Tax Law (Federal Decree-Law No. 47 of 2022) includes comprehensive TP provisions. Ministerial Decision No. 97 of 2023 specifies documentation requirements. The first tax returns and TP documentation are due for the first financial year starting on or after 1 June 2023.
What are the UAE TP documentation requirements?
Three tiers: (1) Disclosure Form — filed with tax return by all taxable persons with related-party transactions; (2) Local File — for entities with revenue ≥AED 200M or related-party transactions ≥AED 40M; (3) Master File — for groups with consolidated revenue ≥AED 3.15B. Documentation follows OECD Chapter V.
How do free zone rules interact with UAE transfer pricing?
Transactions between a free zone qualifying person and a related mainland person must be at arm's length. This is critical: if the intercompany pricing is not arm's length, the free zone entity's qualifying income may be reduced, potentially affecting the 0% rate benefit. TP documentation is required for free zone/mainland related-party transactions.
Does the UAE follow OECD Transfer Pricing Guidelines?
Yes. The UAE Corporate Tax Law explicitly references OECD Guidelines. The arm's length principle, five TP methods (CUP, Cost Plus, Resale Price, TNMM, Profit Split), interquartile range (25th–75th percentile), and three-tiered documentation (Master File/Local File/CbCR) all follow OECD standards.
What should UAE businesses do to prepare for TP compliance?
Review all related-party transactions, prepare functional analyses for each entity, select appropriate TP methods, source comparable data (Amadeus/Orbis), prepare documentation, and file the Disclosure Form with the tax return. Businesses that previously had no tax compliance framework should seek professional advice for the initial year.

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