Understanding UAE Transfer Pricing Regulations and Disclosure Requirements

FINAL CALL FOR TP DISCLOSURE COMPLIANCE

With the UAE Transfer Pricing (TP) Disclosure Form deadline approaching, businesses must prioritize compliance with tax regulations. As outlined in Article 55 of Federal Decree-Law No. 47 of 2022, Taxable Persons are required to submit a disclosure form alongside their Tax Return, providing details of transactions with Related Parties and Connected Persons.

To provide clarity, the Federal Tax Authority (FTA) has issued a Corporate Tax Return Guide, which defines the materiality thresholds for such reporting. With the first Corporate Tax Return deadline set for 31^st December 2024, businesses should ensure they understand these requirements and prepare accurate filings to avoid penalties for non-compliance.

Key Schedules Introduced in the New FTA Tax Return Guide

The FTA has included the following two schedules in the new tax return guide;

1. Schedule for Related Party Transactions
2. Schedule for Connected Persons

Deadline for Filing the Disclosure Form

Taxpayers are required to submit the transfer pricing disclosure form along with their corporate tax return within 9 months after the conclusion of the relevant tax period.

Understanding Corporate Tax Return Deadlines for Newly Incorporated Companies

When it comes to corporate tax filing, the general deadline for submitting the return, along with key forms like:

The filing deadline is within 9 months after the financial year ends, providing sufficient time for document preparation.

Companies incorporated after 1^st June, 2023, with a financial year ending on 31^st December, 2023, have a shortened deadline of six or seven months, requiring filing in 2024.

Corporate Tax Filing Deadlines for Regular Financial Year Companies

• Companies incorporated before 1^st June, 2023, with a standard FY (January-December) must file their CT return within nine months after year-end.
• For most, the 2024 financial year ends on 31^st December, with a CT return deadline of 30^th September, 2025.
• Plan in advance to ensure all forms and documentation are ready before the deadline to avoid penalties.

With the immediate deadline effectively managed, we can now turn our attention to a detailed and systematic review of form comprehension.

To stay compliant with corporate tax regulations, consult our detailed UAE Corporate Tax Guide.

UAE CT Return- TP Disclosure Form

Let’s have a quick understanding as to who will be determined as a Related party:

• The Family Tree Crew: Those tangled up in the branches of your family tree, from siblings to distant cousins, grandparents, great-grandparents, and even great-great-grandparents!!! and anyone else officially bound to you (adopted or otherwise).
• Individual & Company Control: A person (alone or with associates) owning at least half of a company or having significant influence over its operations.
• Connected Companies: Two or more companies where one has majority ownership, control, or both, or where a single entity has significant influence over multiple companies.
• Business Entity & Location: A company and its permanent place of business, regardless of location.
• Business Partners: Individuals involved in a business partnership that is not a legally separate entity.
• Trust/Foundation Affiliations: Individuals involved in a trust or foundation as trustees, founders, beneficiaries, or those connected to them.

 

Related Party Reporting:

• Taxable persons must report high-value transactions with related parties in the transfer pricing disclosure form.
• The threshold is 40 million AED, requiring reporting if total transactions exceed this amount in a financial/taxable year.
• Dividends between related parties are excluded from threshold calculations.
• Revenue and expenditure must be reported separately, including amounts and types of income/expenses for each related party.

 

The following are the contents in the disclosure form:

Contents	Meaning
Name of the Related Party	Specify the legal name of the related party involved in the transaction.
Transaction type	The drop-down menu enables you to choose from various transaction types, including liabilities, assets, interest, intellectual property, services, goods, and more.
Related party tax residency details	The drop-down menu lets you select the country where the related party is a tax resident, including the option to choose the UAE.
TIN or TRN for RP	Enter the related party’s TIN from a foreign jurisdiction or TRN for UAE Corporate Tax.
Gross Income or expense value	The gross value of transaction is required to be filled and not the net value in AED
TP Method	TNMM, CUP, PSM, CPM, RPM and other method (Added recently)
Arm’s Length Value	Shall be determined from the benchmarking conducted during the Tax Period
Tax Adjustment	Difference of income/ expense & ALP value

 

Connected Persons Payments/Benefits Reporting

• Taxable persons must disclose high-value transactions with connected persons in the TP disclosure form.
• The threshold is 500,000 AED, requiring disclosure if total transactions exceed this amount in a single year.

The requirement applies only when benefits or income per connected person (including related parties) exceed the 500,000 AED threshold.

The following are the contents in the Disclosure Form:

Contents	Meaning
Name of the Connected Persons	Specify the legal name of the related party involved in the transaction.
TIN or TRN	Provide the TIN or TRN of the connected person if available.
Benefit or Payment	The drop-down list will allow you to select this.
Description	Provide details of payments made to the connected person and services received from them
Amount of Benefit or Payment	Enter the amount of each payment made to connected persons during the taxable year
Market Value of Benefit or Service Provided	Treat it as a payment to a non-connected person and specify the corresponding amount.
Tax Adjustment	The portal will calculate it automatically.

 

Summary of Related Party (RP) Disclosure Form Applicability

* Category-wise: The relevant category should be selected from the drop-down list, which offers the following options:                

• Goods
• Services
• Intellectual Property
• Interest
• Assets
• Liabilities
• Others

 

Summary of Connected Persons (CP) Disclosure Form Applicability

How to be ready for TP Disclosure Form?

Why BCL for your TP Documentation?

BCL Globiz, a firm of Chartered Accountant in Dubai, endeavors to provides high quality services in the areas of business incorporations, accounting, payroll, compliance management, transfer pricing, corporate & start-up advisory and Virtual CFO services.

For a broader perspective on transfer pricing, read our blog on Transfer Pricing: The End Is the New Beginning.

BCL Helps your Business with Expert Tax Guidance and FTA Representation in the UAE

At BCL Globiz, our expert team ensures precise transfer pricing documentation and compliance with evolving regulations. We assist with strategic planning, stay updated on tax developments, and help you navigate complex policies. Contact us for tailored advice on transfer pricing and corporate tax matters to ensure seamless compliance. Please reach out to us at rakesh@bclglobiz.com.

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