Self-Correcting Without Permission: What CTP011 Allows and What It Demands?
Ever priced a deal with a related company, only to realise later it wasn’t quite at market rate? The Federal
- Ensuring UAE Corporate Tax Compliance | Best Transfer Pricing Benchmarking Services
Transfer Pricing Services in the UAE
Comprehensive Transfer Pricing (TP) solutions aligned with UAE Federal Tax Authority (FTA) requirements, OECD Guidelines, and Ministerial Decision No. 97 of 2023.
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- Comprehensive TP Solutions
Our Transfer pricing services portfolio includes
End-to-end Transfer Pricing advisory aligned with UAE Federal Tax Authority requirements, OECD Transfer Pricing Guidelines, and international best practices.
Benchmarking Analysis
Comprehensive comparability analysis using OECD-compliant methodologies to establish arm's length pricing for intercompany transactions.
- Related party
- Connected persons
- Loan Interest and Royalty
- Access to global financial databases
Connected Persons Analysis
Specialized compliance for Article 36 transactions including KMP remuneration, director fees, and owner compensation.
- Salary Benchmarking
- Market Value Analysis
- FTA Scrutiny Defense
- Documentation
Related Party Transactions
Strategic evaluation of all transactions with entities meeting Article 35 criteria under UAE Corporate Tax Law.
- Transaction Mapping
- ALP Compliance
- Risk Assessment
- Tax Planning
Deadline: With CT Return
TP Disclosure Form
Mandatory component of the UAE Corporate Tax Return requiring disclosure of Related Party and Connected Persons transactions.
Required Contents:
- Related Party Schedule (>AED 40M aggregate)
- Connected Persons Schedule (>AED 500K per CP)
- Transaction type classifications
- Gross income/expenses vs ALP values
- Tax adjustment calculations
How BCL Helps:
BCL prepares and files TP Disclosure Forms ensuring all thresholds are correctly assessed, schedules properly completed, and adjustments accurately calculated.
Deadline: 9 months from tax period end
Master File
Global overview of multinational group's business operations, organizational structure, and transfer pricing policies.
Required Contents:
- Group organizational structure
- Description of MNE's business
- MNE's Intangibles and IP
- Intercompany financial activities
- MNE's financial and tax positions
- Global transfer pricing policies
How BCL Helps:
BCL coordinates with group headquarters to prepare Master Files that provide a coherent global picture while meeting UAE-specific requirements.
Deadline: 9 months from tax period end
Local File
Detailed Transfer Pricing Study documenting controlled transactions for a specific tax period per Ministerial Decision No. 97 of 2023.
Required Contents:
- Entity overview and organizational structure
- Industry and economic analysis
- Controlled transaction descriptions
- Functional analysis (FAR)
- Transfer pricing method selection
- Comparability analysis and benchmarking
- Economic analysis and ALP determination
How BCL Helps:
BCL delivers comprehensive Local Files that withstand FTA scrutiny, incorporating rigorous economic analysis and contemporaneous documentation.
Deadline: 12 months from tax period end
Country-by-Country Report (cbcr)
Annual report providing aggregate tax jurisdiction-wide information relating to the global allocation of income, taxes paid, and indicators of economic activity.
Required Contents:
- Revenue (related and unrelated party)
- Profit/loss before income tax
- Income tax paid and accrued
- Stated capital
- Accumulated earnings
- Number of employees
- Tangible assets
How BCL Helps:
BCL assists UAE entities in meeting notification requirements and preparing CbCR data for submission to the FTA or coordination with parent entity filings.
Exemptions & Special Cases
Certain entities may be exempt from specific documentation requirements, but ALL TAXPAYERS MUST COMPLY WITH THE ARM’S LENGTH PRINCIPLE.
Small Business Relief
Entities claiming Small Business Relief are exempt from TP documentation requirements
Below-Threshold Entities
Entities not meeting revenue thresholds for Local/Master File
Qualifying Free Zone Persons
QFZPs must still adhere to ALP and maintain supporting documentation
Need Help with TP Documentation?
BCL’s Expert Team ensure your Transfer Pricing files meet all FTA requirements and
provide robust audit defense.
Databases & Data Sources
BCL maintains subscriptions to leading global databases, ensuring access to
comprehensive, reliable comparable data for all transaction types.
- OECD-Compliant Methodologies
Transfer Pricing Benchmarking Expertise
A robust Benchmarking Study and Comparability Analysis are essential for applying the Arm’s Length Principle effectively. BCL Globiz deploys industry-leading databases and rigorous OECD-compliant methodologies to establish defensible transfer pricing positions for UAE businesses
Industry & Economic Analysis
Comprehensive review of industry dynamics, market conditions, and economic factors affecting the tested transaction.
Transaction Review & Data Collection
Detailed mapping of controlled transactions, contractual terms and financial data extraction.
Functional Analysis (FAR)
Characterisation of functions performed, assets employed, and risks assumed by each party to the transaction.
Comparable Selection
Systematic database search applying quantitative and qualitative screening criteria to identify reliable comparables.
Comparability Adjustments
Application of working capital and other adjustments to enhance comparability where differences exist.
ALP Determination
Statistical analysis to establish arm's length range and determine appropriate pricing position.
Why Choose BCL Globiz for your TP needs?
Defensible Price Setting
Establishes defensible intercompany pricing using rigorously selected independent comparables.
Statistical Arm's Length Range
Provides interquartile range analysis to reduce tax authority disputes and audit risk.
Audit Insulation
Serves as strong evidence for compliance, minimizing penalties and regulatory scrutiny.
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Expert consultation with senior TP specialists.
Connected Persons and KMP benchmarking
The UAE’s definition of “Connected Persons” under Article 36 is broader than typical Related Party definitions globally. Without personal income tax in the UAE, the FTA mandates rigorous review of transactions with Connected Persons to prevent corporate tax base erosion through excessive payments disguised as salaries, bonuses, or other compensation.
Owners
Any Natural Person who directly or indirectly holds an ownership interest in the Taxable Person or exercises control over it, including its operations.
Directors & Officers
Any Director or Officer of the Taxable Person, including board members and key managerial pre (KMPs).
Related Parties of (a) & (b)
Any Related Party of the Owners, Directors, or Officers-including their relatives up to the fourth degree of kinship
Partnership Connections
Where the Taxoble Person is a partner in an. Unincorporated Partnership, any other perthes and their Related Parties qualify as Connected Persons.
Disclosure Threshold
AED 500,000
Total payments or benefits to a Connected Person (and their Related Parties) exceeding this threshold triggers mandatory disclosure in the TP Disclosure Form.
- Applies per Connected Person (aggregated with their Related Parties)
- Covers all forms of payments, benefits, and compensation
- Requires Market Value comparison and justification
Covered Compensation Types
Base Salary & Wages
Director Fees & Remuneration
Pension Contributions
End of Service Benefits
Performance Bonuses
Employee Stock Options (ESOP)
Housing & Transportation Allowances
Profit Sharing Arrangements
How BCL Helps You Benchmark Connected Persons Compensation
Our specialized salary benchmarking service ensures that compensation paid to owners, directors, KMPs, and their relatives meets the arm’s length standard required under UAE Corporate Tax Law.
Role & Responsibility Analysis
Detailed mapping of job functions, reporting lines, decision-making authority, and scope of responsibilites.
Market Comparability Assessment
Identification of comparable roles in the UAE market and GCC region based on industry, company size, and complexity.
Compensation Data Collection
Extraction of market salary data from specialized databases covering the UAE and regional markets.
Statistical Analysis & Reporting
Development of arm's length range using interquartile analysis and preparation of FTA-defensible documentation.
- FLAT FEE PRICING
AED 4,999 +VAT
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Tax Deductibility Requirements
Under the Article 28 of the UAE Corporate Tax Law issued by FTA, payments to Connected Persons are tax-deductible only if they satisfy the following conditions:
Arm's Length Principle
Compensation must reflect market value for comparable services
Wholly for Business Purposes
Expenditure must be incurred solely for business operations
Not Capital in Nature
Except specific cases like pension contributions under Article 33
BCL Documentation Package
Our comprehensive salary benchmarking deliverable includes:
- Role Profile & Responsibility Mapping
- Market Comparable Selection Criteria
- Interquartile Range Analysis Report
- Need-Benefit Analysis Documentation
- FTA Audit Defense Memorandum
Role Profile & Responsibility Mapping
Market Comparable Selection Criteria
Interquartile Range Analysis Report
Need-Benefit Analysis Documentation
FTA Audit Defense Memorandum
Related Party Transactions & Compliance
A Related Party refers to an individual or entity with an established relationship with a business subject to UAE Corporate Tax. This relationship arises through ownership, control, or kinship-and differs significantly from IAS 24 definitions used in financial reporting.
50%+ Ownership Interest
Any Natural Person of Legal Entity directly or indirectly holding 50% or more ownership in the Taxable Person
50%+Control
Entities where the same person(s) directly or indirectly control 50% or more of both the Taxable Person and another entity
Kinship (4th Degree)
Relatives up to the fourth degree of kinship of an individual owner or controller of the Taxable Person
Permanent
Establishments
Any PE of the Taxable Person or any PE through which a Related Party conducts business
Partnership Interests
Partners in an Urincorporated Partnership where the Taxable Person is also a partner
Mandatory Disclosure Requirements
Under the UAE TP Disclosure Form, all Taxable Persons must complete the Related Party schedule when specific thresholds are exceeded. Non-compliarice may result in penalties and increased FTA scrutiny.
AED 40 Million
Aggregate RP transactions triggering disclosure
AED 4 Million
Individual transaction category threshold
Required Disclosures per Transaction:
- Related Party Name & Tax Residence
- Transaction Type Classification
- Gross Income/Expenses & ALP Value
- Tax Adjustments (Auto-calculated)
- Related Party Name & Tax Residence
- Transaction Type Classification
- Gross Income/Expenses & ALP Value
- Tax Adjustments (Auto-calculated)
What's Covered Under the TP Lens?
Service Transactions
Intercompany services form the backbone of multinational operations. BCL provides rigorous benchmarking for all service arrangements.
Management Fees
Strategic, administrative, and corporate oversight services provided by parent or regional headquarters
Technical Support Services
Engineering, IT support, R&D assistance, and specialized technical advisory services
Shared Service Centers
Centralized finance, HR, IT, procurement, and administrative functions
Marketing & Sales Support
Brand development, advertising, distribution support, and sales enablement services
Manufacturing Arrangements
Complex manufacturing value chains require precise characterization and benchmarking based on functions, assets, and risks.
Licensed Manufacturing
Manufacturing under license with limited IP ownership but significant operational autonomy
Full-Fledged Manufacturing
Entities owning IP, bearing market risk, and controlling key manufacturing decisions
Contract Manufacturing
Toll/contract manufacturing with limited risk and routine manufacturing functions
Trading of Goods
Product flows and distribution arrangements require robust comparable analysis based on distribution model and risk profile.
Full-Risk Distribution
Distributors bearing inventory, credit, and market risks with full pricing authority
Limited-Risk Distribution
Distributors with reduced risks, often with guaranteed margins or return policies
Commissionaire Arrangements
Agents acting on behalf of principal without taking title to goods
Supply Chain Logistics
Procurement hubs, logistics centers, and inventory management services
Royalty Transactions
IP licensing requires specialized databases and valuation techniques to establish arm’s length royalty rates.
Trademark Licensing
Licensing of brands names, trade names, and associated goodwill
Patent Licensing
Technology patents, manufacturing processes, and proprietary methods
Know-How & Trade Secrets
Proprietary knowledge manufacturing know how and technical expertise
IP Usage & Development
Complex intangibile arrangements including cost contribution agreements and IP migration structures.
Cost Contribution Arrangements
Joint Development of intangibles with shared costs and benefits among participants
IP Usage Fees
Fees for using group intangibles including software, databases, and proprietary systems
R&D Cost Recharges
Allocation of centralized R&D costs to benefiting entities
Specialized IP Analysis Required
Intangible transactions require specialized valuation expertise and access to royalty databases. BCL's IP specialists combine deep technical knowledge with industry-leading databases including RoyaltyStat, KtMINE, and Markables to establish globally defensible royalty rates and licensing terms.
Intercompany Financing
Financial transactions require specialized analysis of credit ratings, loan terms, and market interest rates.
Intercompany Loans
Intra-group lending arrangements including term loans and revolving facilities
Guarantees & Letters of Credit
Parent company guarantees and credit support arrangements
Cash Pooling
Notional and physical cash pooling arrangements with interest allocation
Hedging Arrangements
Centralized treasury and hedging services provided to group entities
Credit Rating Analysis
BCL performs standalone credit rating analysis for intercompany borrowers using recognized methodologies. This ensures that intercompany Interest rates reflect the borrower's actual creditworthiness rather than benefiting from implicit parental support, unless such support is explicitly priced.
How BCL Helps You Benchmark Related Party Transactions
Our expert team deploys industry-leading databases and OECD-compliant methodologies to establish defensible arm’s length pricing for all your Related Party dealings.
Transaction Identification & Mapping
Comprehensive review of all intercompany flows and contractual arrangements
Functional & Risk Analysis
Detailed FAR analysis to characterize entities and transactions accurately
Database Search & Comparable Selection
Rigorous screening using global financial databases
ALP Determination & Documentation
Establishing interquartile range and FTA-ready documentation
Databases We Deploy
Bureau van Dijk ORBIS
S&P Capital IQ
Bloomberg Terminal
RoyaltyStat
ktMINE
Critical Compliance Note
The definition of Related Parties under UAE Transfer Pricing regulations (Article 35, CT Law) differs from IAS 24 criteria used in financial statement disclosures. Businesses must conduct a separate assessment based on UAE TP rules rather than relying solely on accounting disclosures or global TP policies. BCL ensures your Related Party identification aligns with FTA requirements.
End-to-End Transaction Benchmarking
BCL’s transaction benchmarking service covers the entire spectrum of Related Party dealings. Our approach combines rigorous economic analysis with practical commercial insights to deliver defensible transfer pricing outcomes.
- Transaction Mapping
- Database Searches
- FAR Analysis
- Comparability Adjustments
- Method Selection
- ALP Determination
Ready to Ensure TP Compliance?
Connect with BCL Globiz for expert Transfer Pricing advisory tailored to your UAE business needs. Our team of specialists is ready to help you navigate Related Party & Connected Persons compliance, and all TP documentation requirements.
FTA Registered Agent
Authorized and registered with the Federal Tax Authority
Expert Team
Senior TP specialists with Big 4 and multinational experience
Fast Turnaround
Efficient delivery without compromising quality
Contact Information
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Resources and Insights
Stay ahead of the Compliance curve with our comprehensive UAE Tax Digest.
FTA Clarifies Connected Persons Rules: Forget Your Title – The UAE FTA Wants to Know Who Really Runs the Business
The latest clarification on Connected Persons shifts the focus from designation to actual decision-making authority — and many UAE businesses
Arm’s Length Principle in Transfer Pricing: UAE Guide 2026
Under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022), every related-party and connected-person transaction must comply with
