The United Arab Emirates (“UAE”) joined the OECD Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) on 16 May 2018.
By joining the Inclusive Framework, the UAE has committed to implementing BEPS minimum standards, one of which is Transfer Pricing Documentation and Country-by-Country Reporting (“CbCR”).
UAE has issued Regulations relating to CbCR, in 2019. Now with the introduction of Corporate Tax in the UAE, the introduction of the Transfer Pricing regime has also been announced.
Transfer Pricing provisions come into play under the following circumstances:
When business is divided into more departments or divisions in the same country and;
In the case of cross border transactions:
A transfer price is a price established between departments of a company or between two group companies (those transactions are often called “regulated”) in the course of business.
A transfer price can be different from the price for a similar product settled on the open market. The major reason is the tax consideration.
Transfer Price determination plays a vital role when planning transactions at the international level, as there is a difference in tax rates and rules in each country.
Our fantastic team and our international Network (IECNet and AITC) <> will always be at your service for all your transfer pricing needs. We cover the full range of transfer pricing-related work:
Transfer Pricing Advisory Services UAE
Emirates Chartered Accountants Group - Transfer Pricing Advisory Services in Dubai, UAE.
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CA Manu Palerichal I CEO & Partner
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Country-by-Country Reporting (CbCR)is the requirement of the Organization for Economic Co-operation and Development (OECD)
Base Erosion and Profit Shifting (BEPS) Action Plan 13 sets the minimum standard for Transfer Pricing documentation.
We, at Emirates Chartered Accountants Group, are fully equipped to handhold you on the newly introduced Transfer Pricing Regulations in the UAE.
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People usually ask
Ans: Kingdom of Saudi Arabia has issued detailed byelaws and guidelines and prescribed Transfer Pricing documentation.
Kuwait, Oman, Qatar, Bahrain does not have detailed byelaws and penalties regulations for Transfer Pricing but have incorporated the concept of arm’s length price in dealing with related party transactions.
Ans: UAE does not have byelaws for reporting or documentation of arm’s length price, and therefore not preparing documents in relation to transfer pricing would not attract any penal provisions in UAE. However, if the company undertakes business in other jurisdictions where Transfer Pricing Regulations are in place, they would be required to prepare reports and compile documentation for the UAE company as well.
For Eg. If your company supplies goods to the subsidiary or related party in Kingdom of Saudi Arabia(‘KSA’), the company will have to comply with all the Transfer Pricing provisions of KSA and therefore have a local file for Transfer Pricing documentation and arrival of arm’s length prices for the transactions between the two entities.