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Transfer pricing disclosure is not required with every UAE Corporate Tax return. For 2026 filings, a related party (for example, a parent company, subsidiary, shareholder or commonly controlled business where the legal definition is met) schedule is generally triggered when the aggregate value of related party transactions exceeds AED 40 million. A separate connected person (for example, an owner or director where the Corporate Tax rules apply) schedule can apply when payments or benefits involving connected persons exceed AED 500,000. The underlying arm’s-length principle (pricing transactions as if they were between independent parties) can still apply even when a disclosure threshold is not met.
Businesses preparing a 2026 Corporate Tax return should identify related party and connected person transactions before the filing stage. This review is part of accurate Corporate Tax return filing because the EmaraTax return includes dedicated schedules for certain high-value transactions.
The disclosure thresholds are important, but they do not determine whether transfer pricing rules apply. UAE transfer pricing rules can apply to domestic and cross-border transactions with related parties and connected persons. The disclosure schedules determine what information must be reported with the return; the arm’s-length principle determines how relevant transactions should be priced for Corporate Tax purposes.
Основные выводы
- Transfer pricing disclosure is not required with every Corporate Tax return.
- The FTA Corporate Tax Returns Guide requires financial statements to be attached unless the taxpayer elects for Small Business Relief.
- Once the AED 40 million threshold is crossed, transaction categories exceeding AED 4 million are disclosed.
- The connected person schedule uses a separate AED 500,000 threshold.
- The arm’s-length principle can apply even where no disclosure schedule is required.
- Master file and local file thresholds are separate: AED 200 million business revenue or AED 3.15 billion consolidated MNE group revenue.
- A valid Small Business Relief election removes the transfer pricing documentation requirement for that tax period, but not the arm’s-length principle.
What Does Transfer Pricing Disclosure Mean?
Transfer pricing disclosure means reporting specified information about certain transactions with related parties and connected persons in the UAE Corporate Tax return. It is not the same as preparing a full transfer pricing report. The disclosure schedules form part of the return and are designed to identify material transactions that may require closer review under the arm’s-length principle.
Article 55 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, as amended, allows the Federal Tax Authority (FTA) to require information about transactions and arrangements with related parties and connected persons to be filed with the Corporate Tax return.
In practice, the FTA Corporate Tax Returns Guide | CTGTXR1 sets specific thresholds for the related party and connected person schedules. A business should therefore review its transaction ledger, financial statements and group relationships before answering the transfer pricing questions in EmaraTax.
When is the Related Party Disclosure Schedule Required?
The related party transaction schedule is generally required when the aggregate value of all transactions with all related parties during the tax period exceeds AED 40 million. Once that threshold is exceeded, transaction categories exceeding AED 4 million in aggregate must be disclosed. Dividends declared between related parties are excluded from these AED 40 million and AED 4 million threshold calculations.
The AED 40 million test looks at the aggregate value of transactions with all related parties, using amounts recorded in the financial statements or market value where relevant. If the overall threshold is crossed, the business then considers the AED 4 million threshold by transaction category.
The FTA guide requires gross income and expenditure to be reported separately, with information provided for each reportable related party by transaction type. This means businesses should not simply look at a net intercompany balance at year-end.
Where ownership structures, common control or cross-border group transactions are complex, Corporate Tax consultancy in the UAE can help determine which entities meet the legal definition of related parties and whether the schedule is triggered.
Who is a Related Party for UAE Corporate Tax?
A related party is determined under Article 35 of the Corporate Tax Law. The definition can include companies under common ownership or control, parent and subsidiary relationships, certain ownership links involving individuals, and other relationships specified by law. The analysis is based on the legal relationship between the parties, not simply whether two businesses trade frequently with each other.
For companies, one common ownership test is met where one person, alone or together with its related parties, directly or indirectly owns 50% or more of another company, or where the same person owns 50% or more of each of two companies. Related-party status can also arise through control even where this ownership test is not met. The rules can apply whether the counterparty is in the UAE mainland, a Free Zone or another country.
This is why a domestic transaction can still be a transfer pricing transaction. A UAE group should not assume that transfer pricing applies only to payments made overseas.
When is the Connected Person Disclosure Schedule Required?
The connected person schedule uses a different threshold. It is completed where the aggregate value of transactions with connected persons, including their related parties, exceeds AED 500,000. The schedule is then completed for each connected person where the aggregate payment or benefit to that person, together with their related parties, exceeds AED 500,000.
Connected person rules commonly require attention where a business makes payments or provides benefits to an owner, director, officer, partner or a person related to them, where the legal conditions are met. Examples may include remuneration, benefits, fees or other amounts provided in connection with the business.
Businesses should therefore review connected person payments separately from the AED 40 million related party threshold. The two schedules serve different purposes and use different tests.
Does the Arm’s Length Principle Apply Below the Disclosure Thresholds?
Yes. The transfer pricing disclosure thresholds do not switch the arm’s-length principle on or off. Article 34 of the Corporate Tax Law requires transactions and arrangements between related parties to meet the arm’s-length standard. A transaction can therefore fall below the disclosure thresholds and still require an arm’s-length assessment and supporting records.
This distinction is one of the most important points in transfer pricing compliance. A business with AED 5 million of related party transactions may not meet the AED 40 million threshold for the related party disclosure schedule, but the pricing of those transactions should still be supportable under the arm’s-length principle.
The FTA may also request information supporting the arm’s-length nature of related party or connected person transactions. Under Article 55, requested transfer pricing information must generally be provided within 30 days following the request, unless the FTA allows a later date.
Is the Disclosure the Same as a Master File and Local File?
No. The transfer pricing disclosure schedules in the Corporate Tax return are separate from the master file (a group-level transfer pricing document) and local file (an entity-level transfer pricing document for relevant transactions) requirements. A business may have a disclosure obligation without being required to maintain a master file and local file. The documentation thresholds are substantially higher and are set by Ministerial Decision No. 97 of 2023.
A master file and local file are required where either of the following conditions is met for the relevant tax period:
- The business has revenue of at least AED 200 million; or
- The business is a constituent company (a member entity) of a multinational enterprise group (a group with operations in more than one country) with consolidated group revenue of at least AED 3.15 billion.
These tests should not be confused with the AED 40 million, AED 4 million and AED 500,000 disclosure thresholds. The Corporate Tax return disclosure is one compliance requirement; maintaining detailed transfer pricing documentation is another.
Beaufort Associates provides UAE Corporate Tax services covering return preparation, related party review and transfer pricing documentation support where applicable.
What if Small Business Relief Is Elected?
A business that validly elects for Small Business Relief (a relief that can treat an eligible business as having no taxable income for the tax period) is not required to comply with the transfer pricing documentation rules for that tax period, including the transfer pricing disclosure and master file/local file requirements. However, the business must still comply with the arm’s-length principle for transactions with related parties and connected persons.
The FTA Small Business Relief Guide expressly distinguishes documentation relief from the underlying pricing rule. Small Business Relief therefore simplifies compliance, but it does not allow related party transactions to be priced arbitrarily or outside the arm’s-length principle.
As at 2026, Small Business Relief has been extended to eligible tax periods ending on or before 31 December 2029, subject to the applicable conditions, including the AED 3 million revenue threshold.
What Information Should Be Prepared Before Filing?
Before filing, businesses should prepare a complete list of related parties and connected persons, reconcile the transactions to the financial statements, separate income and expenditure, identify the relevant transaction categories, and assess whether amounts are at arm’s-length. The transfer pricing review should be completed before the return is submitted, not after EmaraTax asks for the schedule.
A practical pre-filing review should normally include:
- An ownership and control chart identifying related parties.
- A list of transactions with each related party and connected person.
- Reconciliation of intercompany balances and transactions to the general ledger and financial statements.
- Separate identification of goods, services, financing, intellectual property and other transaction categories where relevant.
- Agreements, invoices, management fee calculations, loan terms and other supporting documents.
- An assessment of the arm’s-length value and any transfer pricing adjustment required.
- A check of whether the master file and local file thresholds are met.
For businesses that want to understand where these schedules sit within the wider return, see Beaufort Associates’ guide to the UAE Corporate Tax return format.
What Are Common Transfer Pricing Disclosure Mistakes?
Common mistakes include treating transfer pricing as an overseas-only issue, checking only year-end balances instead of total transactions, netting income against expenditure, using the master file threshold as the disclosure threshold, missing connected person payments, and assuming that no disclosure means no arm’s-length documentation is needed.
Ignoring UAE-to-UAE transactions: Transfer pricing rules can apply to domestic transactions as well as cross-border transactions.
Testing only the closing balance: Disclosure thresholds relate to transactions during the tax period, not merely the balance outstanding at year-end.
Netting income and expenditure: The FTA guide requires gross income and expenditure to be reported separately in the related party schedule.
Confusing disclosure with master/local files: The AED 40 million disclosure test is separate from the AED 200 million revenue and AED 3.15 billion MNE group documentation tests.
Missing connected person payments: The connected person schedule has its own AED 500,000 test and should be reviewed separately.
Assuming below-threshold transactions are outside transfer pricing: The arm’s-length principle can still apply even where no schedule is required.
How Can Beaufort Associates Help?
Beaufort Associates can review related party and connected person transactions as part of the Corporate Tax filing process, assess whether the disclosure thresholds are met, identify information needed for the return, review potential transfer pricing adjustments, and support master file or local file requirements where they apply.
The objective is to make sure the Corporate Tax return is supported by the accounting records and the business has considered both disclosure and arm’s-length requirements before submission. Complex group structures, management charges, shareholder or director payments, financing arrangements and cross-border transactions generally benefit from an early transfer pricing review.
Часто задаваемые вопросы
Do all UAE companies need to submit a transfer pricing disclosure?
No. The related party disclosure schedule is generally required only when the aggregate value of related party transactions exceeds AED 40 million. A separate AED 500,000 threshold applies to the connected person schedule. The arm’s-length principle can still apply even if no disclosure schedule is required.
What is the AED 4 million transfer pricing threshold?
Once the overall related party transaction value exceeds AED 40 million, a transaction category must generally be disclosed where the aggregate value of that category with all related parties exceeds AED 4 million. The FTA Corporate Tax Returns Guide sets out how the schedule is completed.
Do transactions with UAE group companies count for transfer pricing?
Yes. UAE transfer pricing rules apply to domestic as well as cross-border transactions with related parties and connected persons. A transaction does not fall outside transfer pricing simply because both parties are in the UAE.
Is a transfer pricing disclosure the same as a local file?
No. The Corporate Tax return disclosure schedules and the master file (a group-level transfer pricing document) / local file (an entity-level transfer pricing document for relevant transactions) requirements are separate. A business can be required to disclose related party transactions even when it is below the thresholds for maintaining a master file and local file.
Does Small Business Relief remove transfer pricing requirements?
A valid Small Business Relief election removes the transfer pricing documentation requirements for that tax period, including the disclosure requirement and master file/local file requirements. However, the business must still comply with the arm’s-length principle.
Can Beaufort Associates review my transfer pricing disclosure before filing?
Yes. Beaufort Associates can review related party and connected person transactions, assess the applicable disclosure thresholds, reconcile the information to the Corporate Tax return and support transfer pricing documentation where required.
бофорт
Last Reviewed on 11th September, 2026
This page sets out our understanding of corporate tax based on the legislation and guidance in force at the date of last review. The position may change, and the application to a particular set of facts may require further analysis. Nothing on this page constitutes professional, legal or tax advice. Beaufort Associates accepts no liability for action taken or not taken in reliance on this page. Please contact us for advice tailored to your circumstances.
Источники
Основные источники, использованные на этой странице:
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments — Articles 34, 35, 36 and 55. Official source
- Federal Tax Authority — Corporate Tax Guide: Tax Returns | CTGTXR1 — Section 16, Related Party transactions and Connected Person Schedules. Official source
- Federal Tax Authority — Corporate Tax Guide: Transfer Pricing | CTGTP1. Official source
- Ministerial Decision No. 97 of 2023 on the Requirements for Maintaining Transfer Pricing Documentation. Official source
- Federal Tax Authority — Small Business Relief Guide | CTGSBR1. Official source
- Ministry of Finance — Ministerial Decision No. 131 of 2026 extending Small Business Relief to eligible tax periods ending on or before 31 December 2029. Official source
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