The UAE’s corporate tax landscape has changed significantly with the introduction of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. As part of this new regime, businesses are now required to comply with detailed transfer pricing rules. A key component of these rules is the Transfer Pricing Disclosure Form UAE, which must be filed as part of the annual Corporate Tax (CT) return.
This form is designed to ensure that transactions with related parties and connected persons adhere to the Arm’s Length Principle. Failing to comply can lead to administrative penalties or adjustments by the Federal Tax Authority (FTA). In this guide, we explain what businesses need to know, highlight the key thresholds, and provide practical steps to complete the disclosure efficiently while remaining compliant.
1. Understand the Role of the Transfer Pricing Disclosure Form UAE
The Transfer Pricing Disclosure Form UAE is not a separate filing. It is integrated into your Corporate Tax return, which is submitted via the EmaraTax portal. This means you cannot submit it independently; it must be completed alongside your annual CT filing.
Businesses must file the disclosure within nine months after the end of their relevant tax period. For instance, companies with a financial year ending December 31, 2025, must submit their first form by September 30, 2026. Missing this deadline can trigger administrative penalties in addition to late filing fines, so careful planning is essential.
Completing the disclosure on time also demonstrates good governance and helps minimize audit risks. The FTA uses the form to identify related-party transactions and ensure that intercompany pricing reflects market conditions.
2. Know the Relevant Thresholds
Not all businesses are required to complete every section of the Transfer Pricing Disclosure Form UAE. The FTA has established materiality thresholds to focus reporting on transactions of significant value:
Related Party Transactions
This section must be completed if the aggregate value of transactions with related parties exceeds AED 40 million in a tax period.
Category-Specific Reporting
Once the AED 40 million threshold is exceeded, any individual transaction category (such as goods, services, or interest) exceeding AED 4 million must be detailed separately.
For example, if your total related-party transactions exceed AED 40 million in a tax period, any single transaction over AED 4 million must be reported separately. So, if your company buys goods worth AED 5 million from a related entity, you need to disclose this transaction in detail, even if your total related-party transactions are only slightly above the AED 40 million threshold.
3. Disclose Payments to Connected Persons
The Transfer Pricing Disclosure Form UAE has a dedicated section for payments to “Connected Persons,” including directors, owners, and their relatives. If payments or benefits to a single connected person exceed AED 500,000 in a tax period, they must be disclosed.
It is important to note that such payments are only deductible if they match the market value of the services provided. For example, if a director receives a salary significantly above market rates, the excess amount must be reported as a non-deductible adjustment. Failure to comply with these rules could result in disallowed deductions and potential penalties.
4. Apply the Arm’s Length Principle
At the heart of the Transfer Pricing Disclosure Form UAE is the Arm’s Length Principle. Transactions between related parties must reflect what independent parties would agree under comparable circumstances.
The form requires you to specify the transfer pricing method used, such as the Transactional Net Margin Method (TNMM) or the Comparable Uncontrolled Price (CUP) method. Choosing the right method is crucial, as the FTA will expect a clear rationale for why it is the most appropriate for your business model and transaction type. For businesses with international operations or cross-border related-party transactions, WellTax provides guidance on UAE and UK transfer pricing rules and global considerations.
Businesses often make the mistake of selecting a method without proper benchmarking. Ensuring your method is supported by contemporaneous data is key to avoiding adjustments during an FTA review.
5. Prepare Documentation in Advance
One common mistake is waiting until an audit to start your transfer pricing documentation, and it creates unnecessary pressure and increase the risk of errors. Businesses need “contemporaneous” evidence ready at the time of filing. Best practices include:
Benchmarking Studies
Use reliable market data to support your pricing. This demonstrates that your intercompany transactions are at arm’s length. WellTax can provide practical support for transfer pricing benchmarking and documentation, helping businesses feel confident that their disclosure meets regulatory requirements. Learn more about our Transfer Pricing Benchmarking & Advisory.
Local and Master Files
These are mandatory if your revenue exceeds AED 200 million or you are part of a large multinational enterprise (MNE). The Local File provides detailed documentation of intercompany transactions, while the Master File provides an overview of the multinational group.
Professional Support
Engaging a tax advisor for benchmarking analysis and documentation review can ensure compliance and reduce audit risk. WellTax can provide practical support at key stages, helping businesses feel confident that their disclosure and documentation meet regulatory requirements.
By having documentation ready when submitting the disclosure, businesses can avoid penalties and streamline any future FTA reviews.
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6. Consider Free Zone Implications
If your business operates in a UAE Free Zone and qualifies for the 0% tax rate, compliance with transfer pricing rules is even more critical. Errors or non-compliance in the Transfer Pricing Disclosure Form UAE could disqualify your 0% status and result in the standard 9% corporate tax being applied for up to five years.
Free Zone businesses should pay particular attention to:
- Transactions with other related parties in the Free Zone or in UAE Mainland
- Proper documentation of services or goods supplied at market rates
- Timely submission of all required transfer pricing disclosures
Being proactive in completing the disclosure form ensures that Free Zone benefits are preserved and audit risks are minimized.
7. Maintain a 7-Year Audit Trail
Filing the Transfer Pricing Disclosure Form UAE is only one part of compliance. Under UAE Tax Procedures Law, businesses must maintain all supporting documentation, including intercompany agreements, benchmarking studies, and other records, for at least seven years.
The FTA typically allows only 30 days to provide these records if requested. Maintaining a well-organized file ensures that your business can respond promptly and avoids penalties. A proactive approach is far safer than a “wait and see” strategy.
Practical Checklist for Filing the Transfer Pricing Disclosure Form UAE
To stay compliant and reduce risks, consider the following steps:
- Identify all related parties and connected persons early in the tax period. This helps you track transactions from the start and avoids last-minute surprises.
- Track all related-party transactions and payments to connected persons as they occur. Keep detailed records of amounts, dates, and transaction types.
- Determine if your transactions exceed FTA thresholds – AED 40 million for related-party transactions or AED 500,000 for payments to connected persons – to know which schedules must be completed.
- Select the appropriate transfer pricing method for your transactions and clearly document your rationale.
- Prepare contemporaneous benchmarking studies and supporting documentation. Ensure that data, studies, and agreements are ready before filing to demonstrate compliance with the Arm’s Length Principle.
- Complete all schedules in the Transfer Pricing Disclosure Form UAE accurately. Double-check that all relevant transactions and connected-person payments are properly disclosed.
- Coordinate with your tax advisor (e.g., WellTax) to review your entries, confirm compliance, and address any uncertainties.
- Submit the disclosure form within nine months of the tax period end through the EmaraTax portal.
- Maintain a 7-year record trail of all supporting evidence, including benchmarking studies, intercompany agreements, and other documentation, to ensure readiness for any FTA request.
Bottom Line
Filing the Transfer Pricing Disclosure Form UAE is a critical compliance step for all UAE businesses engaging in related-party or connected person transactions. Proactive planning, proper documentation, and adherence to thresholds and methods will help you stay aligned with FTA requirements and support your corporate tax compliance strategy.
Non-compliance with transfer pricing documentation or filing obligations can lead to administrative penalties and increased scrutiny from the FTA.
For businesses seeking expert guidance, engaging a professional advisor can ensure that the Transfer Pricing Disclosure Form UAE is completed accurately and efficiently. This reduces risk, ensures alignment with FTA expectations, and helps protect your business during audits or reviews. Our team of professionals at WellTax can help ensure your business stays compliant with UAE transfer pricing rules.