
Transfer Pricing
Requirements:
A) Article 34 (Arm’s length Principle)
- Value of transaction charged to Related party should be equal to Value of transaction with Third Parties.
B) Article 35 (Related Parties & Control)
An Individual;
- Two or more individuals related to fourth degree of Kinship.
- More than 50% shareholding in the Company alone or together with related parties. (Directly or indirectly).
- The ability to control the Juridical Person alone or together with related parties (Directly or indirectly).
C) For Juridical Persons;
- More than 50% shareholding in the Company alone or with related parties. (Directly or indirectly).
- Any Person, alone or with its Related Parties, directly or indirectly owns a 50% or more ownership interest in or Controls such two or more juridical persons
- The ability to control the Juridical Person alone or together with related parties (Directly or indirectly).
- A Person & its Permanent establishment
- Partners of unincorporated firm.
- A Person who is the trustee/founder/ settlor/beneficiary of a trust/ foundation, and its Related Parties.
D) Article 36 (Payments to Connected Persons)
E) Connected Persons:
- An owner of the Taxable Person.
- A director or officer of the Taxable Person.
- A Related Party of any of the Persons referred to above (up to 4th degree of kinship).
- Any partner or a Related Party of that partner.
- The above do not apply to a Taxable Person whose shares are listed on stock exchange or subject to regulatory Oversight.
F) Control:
- It is the ability to exercise 50% or more;
- Voting Rights
- Board of Directors
- Profits
- Ability to exercise significant influence over the conduct of business/Affairs.
G) Article 55 & (Decision No. 97 of 2023 – T.P Documentation)
- TP Disclosure Form to be filed with Tax Return.
- TP documentation to be provided to FTA within 30 days if required.
- Master File & Local File Maintenance for;
- Taxable Person as constituent company of Multinational Enterprise Group with Consolidated Revenue of AED 3.15 Bn or more.
- Taxable Person with a Turnover AED 200 Mn or more.
Inclusions in Local File |
Exclusions in Local File |
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