Transfer Pricing UAE Corporate Tax (2026): Thresholds & Disclosure Form

Under Article 34 of Federal Decree-Law No. 47 of 2022, related party transactions must meet the arm's length standard. This is not a threshold rule — it applies to a two-company structure moving AED 50,000 between entities just as it applies to a multinational.

The most common mistake is reading the disclosure thresholds as compliance thresholds. Falling below AED 40 million means you do not complete that schedule; it does not mean your intercompany pricing is exempt from scrutiny. If the FTA reviews a below-threshold transaction and finds it non-arm's length, an adjustment follows.

This is the part that applies to ordinary UAE SMEs, and it is regularly missed.

A connected person includes owners, directors, officers, and their relatives. The connected persons schedule must be completed where the aggregate payment or benefit to any one connected person — together with their related parties — exceeds AED 500,000 in the tax period. Once triggered, each payment or benefit above AED 500,000 per connected person must be disclosed.

The substantive rule matters more than the form: payments to connected persons are deductible only to the extent they reflect market value for the services actually provided. A shareholder-director drawing a salary well above what the role would command at arm's length has a non-deductible excess, which is added back in the return and increases taxable income /tax/guides/how-to-calculate-corporate-tax-uae →.

For a business with a single owner-manager on a substantial salary, this is a live issue at a scale far below AED 40 million.

The related party transactions schedule is required where the aggregate value of all transactions with related parties — taken from the financial statements or at market value — exceeds AED 40 million in the tax period. Once that primary threshold is crossed, each individual transaction category exceeding AED 4 million must be disclosed separately. Categories include goods, services, intellectual property, interest, assets and liabilities.

The transfer pricing disclosure form is filed with the corporate tax return, due within 9 months of the tax period end /tax/guides/corporate-tax-filing-deadline-2026-uae →.

Under Article 55 and Ministerial Decision No. 97 of 2023, master file and local file documentation is required where either the taxable person's revenue is AED 200 million or more in the tax period, or the taxable person is part of a multinational group with consolidated revenue of AED 3.15 billion or more.

These are not filed with the return. They must be prepared contemporaneously — existing at the time of the transactions, not written after a request — and submitted to the FTA within 30 days of a request. A group operating only in the UAE with no foreign entities does not need a master file, but a local file is still required above AED 200 million.

Transfer pricing compliance is one of the conditions of Qualifying Free Zone Person status. A free zone entity claiming the 0% rate on qualifying income must satisfy the arm's length requirement and the associated documentation obligations — failing it puts the 0% rate at risk for that period and the four that follow /tax/guides/free-zone-corporate-tax-qualifying-income →.

Transactions between members of a tax group are eliminated on aggregation, which removes transfer pricing exposure between those specific entities — one of the genuine administrative benefits of grouping /tax/guides/corporate-tax-group-uae →. Transactions with related parties outside the group remain fully within scope.

Keep a running record of every related party and connected person transaction as it occurs — counterparty, nature, value, and date. Determine each year whether the thresholds are crossed. Where they are, complete the relevant schedules with the return. Where they are not, keep the record anyway: it is the evidence that your pricing was arm's length if the position is ever questioned.

Businesses with material intercompany dealings should hold a benchmarking analysis supporting their pricing, even below the documentation thresholds.