Transfer Pricing UAE
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.
Incidence of Transfer Pricing:
Transfer Pricing provisions come into play under the following circumstances:
When business is divided into more departments or divisions in the same country and;
- Management requires to identify activities of the business that generate value.
- A division of the group provides services or transfers goods to another division of the same company, and the profitability of each division is required to be determined;
In the case of cross border transactions:
- When transactions whether relating to tangible goods, services, finance, or intellectual property take place between entities under common ownership and control
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:
