Transfer Pricing Services
UAE Corporate Tax Compliant Transfer Pricing Documentation & Advisory
With the introduction of the UAE Corporate Tax regime in June 2023, transfer pricing has become a critical compliance requirement for businesses engaged in related party transactions. Ashfaq and Associates provides comprehensive transfer pricing documentation, compliance, and advisory services aligned with OECD Transfer Pricing Guidelines and UAE Federal Tax Authority (FTA) requirements.
Transfer pricing rules ensure that transactions between related parties (such as parent companies and subsidiaries, group companies, or entities under common control) are conducted at arm's length—meaning at prices that would be agreed upon between independent parties under similar circumstances. Non-compliance can result in significant tax adjustments, penalties, and reputational risks. Our team helps you navigate these complex requirements with confidence.
As ICAI-qualified Chartered Accountants with extensive experience in tax compliance and international regulations, we stay current with FTA guidance and global best practices. Whether you're a multinational corporation, a free zone entity with related party dealings, or a local business with cross-border transactions, we provide tailored solutions that meet regulatory requirements while supporting your commercial objectives.
Our Transfer Pricing Services
1. Transfer Pricing Documentation
Prepare comprehensive and compliant transfer pricing documentation that meets UAE Corporate Tax law requirements. We document your transfer pricing policies, functional analysis, economic analysis, and benchmarking to support your related party transactions.
- Master file preparation (group-level overview)
- Local file preparation (entity-specific documentation)
- Country-by-Country Reporting (CbCR) support
- Documentation for specific transactions
- Annual documentation updates
2. Related Party Transactions Analysis
Identify and analyze all related party transactions within your business. We review intercompany agreements, pricing structures, and functional roles to ensure compliance and identify optimization opportunities.
- Identification of related party relationships
- Transaction mapping and categorization
- Functional, asset, and risk (FAR) analysis
- Review of intercompany agreements
- Transfer pricing policy design
3. Arm's Length Price Determination
Establish defensible arm's length prices for your related party transactions using appropriate transfer pricing methods. We apply the most suitable methodology based on your business model, transaction type, and available data.
- Selection of appropriate transfer pricing method
- Comparable Uncontrolled Price (CUP) analysis
- Resale Price Method (RPM) and Cost Plus applications
- Transactional Net Margin Method (TNMM)
- Profit Split Method for complex transactions
4. Benchmarking Studies
Conduct rigorous benchmarking studies to support your transfer pricing positions. We use global databases and financial analysis to identify comparable transactions and companies, demonstrating that your pricing aligns with market standards.
- Database searches (Orbis, S&P Capital IQ, etc.)
- Selection and screening of comparables
- Financial and statistical analysis
- Benchmarking reports with supporting data
- Annual benchmarking updates
5. Advance Pricing Agreements (APA)
Reduce uncertainty and audit risk by securing Advance Pricing Agreements with the FTA. We assist in preparing APA applications, negotiating terms, and managing the ongoing compliance requirements once an APA is in place.
- APA eligibility assessment
- APA application preparation and submission
- Negotiation and discussion support
- Bilateral and multilateral APA coordination
- APA compliance monitoring and renewals
6. Transfer Pricing Risk Assessment & Audit Support
Proactively assess your transfer pricing risks and prepare for potential FTA inquiries or audits. If you face a transfer pricing audit, we provide expert support in responding to information requests, defending your positions, and negotiating outcomes.
- Transfer pricing health checks and risk reviews
- Gap analysis and remediation planning
- FTA audit support and representation
- Documentation defense and enhancement
- Penalty mitigation and dispute resolution
Why Transfer Pricing Compliance Matters in UAE
Under UAE Corporate Tax law, businesses must maintain contemporaneous transfer pricing documentation and demonstrate that related party transactions comply with the arm's length principle. The requirements are largely aligned with the OECD Transfer Pricing Guidelines, which are globally recognized standards. Non-compliance can lead to adjustments to taxable income, significant penalties, and increased scrutiny from the FTA. For multinational enterprises (MNEs) with UAE operations, transfer pricing is also critical for managing global tax efficiency and avoiding double taxation.
Why Choose Our Transfer Pricing Services?
UAE Corporate Tax Expertise
Deep knowledge of UAE CT law, FTA guidance, and local compliance requirements since the regime's introduction in 2023.
OECD-Aligned Methodology
Our approach follows internationally recognized OECD guidelines, ensuring your documentation is robust and defensible.
Tailored Solutions
We customize our services to your business model, industry, and transaction complexity—no one-size-fits-all templates.
Practical & Commercial
We balance technical compliance with commercial realities, helping you structure transactions efficiently within legal boundaries.
Frequently Asked Questions
What are related party transactions?
Related party transactions are business dealings between entities or individuals that have a special relationship—such as parent and subsidiary companies, companies under common ownership or control, or transactions involving shareholders or directors. Examples include intercompany sales, management fees, royalties, loans, and shared services.
Who needs transfer pricing documentation in the UAE?
Under UAE Corporate Tax law, businesses engaged in related party transactions exceeding certain thresholds must maintain transfer pricing documentation. This includes multinational groups, free zone entities with related party dealings, and local businesses with intercompany transactions. Specific requirements depend on transaction values and group revenue.
What is the arm's length principle?
The arm's length principle states that related party transactions should be priced as if the parties were unrelated and dealing at arm's length in the open market. In other words, the price should reflect what independent parties would agree to under comparable circumstances. This ensures tax is paid in the right jurisdiction and prevents profit shifting.
When should transfer pricing documentation be prepared?
Transfer pricing documentation should be prepared contemporaneously—meaning at the time transactions are entered into or shortly thereafter. The FTA can request documentation at any time, and late or incomplete documentation can result in penalties. We recommend annual updates as part of your Corporate Tax compliance cycle.
What happens if my transfer pricing is challenged by the FTA?
If the FTA challenges your transfer pricing, they may adjust your taxable income, which can result in additional tax, interest, and penalties. Having robust contemporaneous documentation significantly reduces this risk. If a challenge occurs, we provide expert representation and defense to support your positions and minimize adverse outcomes.
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