Article 55 UAE Transfer Pricing: Local File, Master File & Cost-Plus Recharges
Published by Valusage International Tax Practice • Arm’s Length Benchmarking
Under Article 55 of the UAE Corporate Tax Law and Ministerial Decision No. 97 of 2023, transactions between Related Parties and Connected Persons must comply with the Arm’s Length Principle.
1. Who Must Maintain Transfer Pricing Documentation?
Taxable persons in the UAE must prepare and maintain a Local File and Master File if they meet either of the following criteria:
- Consolidated Group Revenue exceeds AED 3,150,000,000 in the relevant tax period.
- Taxable Person’s Revenue exceeds AED 200,000,000 in the relevant tax period.
2. Intercompany Management Fees & Arm’s Length Markup
Even entities below the AED 200M threshold must ensure intercompany charges (e.g., parent company management fees, brand royalties, cross-border IT recharges) meet the Arm's Length Principle. The FTA scrutinizes non-arm’s length deductions designed to shift profits away from mainland tax jurisdictions.
Benchmark Your Intercompany Transactions
Use our online Transfer Pricing tool or request a Local File review.