The UAE introduced transfer pricing (TP) regulations alongside its Corporate Tax Law in 2023, aligning with global tax transparency standards. Businesses with related-party transactions must now comply with strict documentation and disclosure rules enforced by the Federal Tax Authority (FTA).

At ICT, we offer specialized transfer pricing and tax audit training to help businesses navigate these complex requirements and avoid costly penalties.

What is Transfer Pricing in the UAE?

Definition

Transfer pricing refers to the pricing of goods, services, or intangibles between related parties (e.g., parent companies, subsidiaries, or entities under common control).

Key UAE Regulations

• Arm’s Length Principle (ALP):Transactions must match market rates.
• Documentation Requirements:Maintain a Master File, Local File, and CbC Report (if applicable).
• Disclosure in Tax Returns:Report related-party transactions in Corporate Tax filings.

💡 Threshold: TP rules apply if annual transactions exceed AED 50 million.

UAE Transfer Pricing Documentation Requirements

 Penalties: Up to AED 500,000 for non-compliance.

How to Prepare for an FTA Tax Audit in the UAE

1. Common Triggers for Tax Audits

• Discrepancies in VAT/CIT returns
• High-risk transactions (e.g., offshore payments, intercompany deals)
• Random FTA selection

2. Audit Process
3. Notification Letter– FTA informs the business.
4. Document Submission– Provide financial records, contracts, and TP files.
5. Field Visit (if required)– FTA inspectors may visit premises.
6. Assessment & Penalties– FTA issues findings and fines if violations exist.
7. How to Stay Compliant

✅ Maintain accurate TP documentation
✅ Conduct internal audits before FTA reviews
✅ Seek professional tax advisory

ICT’s Transfer Pricing & Tax Audit Training

Our courses help businesses and professionals master:
✅ UAE Transfer Pricing Rules – Compliance & Documentation
✅ FTA Audit Preparedness – Risk Mitigation Strategies
✅ Corporate Tax & VAT Audit Defense

🔗 Enroll Now: ICT UAE Tax Training

Final Thoughts

With the UAE tightening transfer pricing enforcement, businesses must proactively manage compliance to avoid audits and penalties. Proper documentation and expert guidance are crucial.

📞 Need help with TP or tax audits? Contact ICT UAE Tax Consultants today!