Under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and Ministerial Decision No. 97 of 2023, every taxable entity engaging in related party or connected person transactions must disclose these dealings through a Transfer Pricing Disclosure Form.

This form is filed together with the Corporate Tax return and provides the Federal Tax Authority with key details of intercompany transactions, including the nature, value, and jurisdiction of each related party or connected person.

The TP DF is not just a reporting requirement, it’s the first compliance checkpoint that determines whether the FTA may call for further documentation, such as a Local File or Master File. Ensuring its accuracy and consistency with other filings is therefore crucial to avoiding red flags or audits.

Regulatory Framework

The requirement to file a Transfer Pricing Disclosure Form arises from Article 55 of the UAE Corporate Tax Law and Article 4 of Ministerial Decision No. 97 of 2023.

All taxable persons with related party or connected person transactions must submit this form electronically, along with their corporate tax return. The form must include detailed information about:

• The nature of the relationship between entities.
• The types of transactions carried out.
• The total value of each transaction.
• Jurisdictions of the related parties.
• Whether the entity maintains a Local File or Master File.

This form enables the FTA to assess transfer pricing risk, select cases for audit, and ensure compliance with the Arm’s Length Principle.

Thresholds for Filing

The TP Disclosure Form must be filed by all UAE entities that meet any of the following conditions during the relevant tax period:

• They have related party transactions exceeding AED 40 million in total.
• They make payments or provide benefits exceeding AED 500,000 to any connected person.
• They are part of a multinational group subject to Local File or Master File requirements (turnover above AED 3.15 billion globally or AED 200 million locally).

Even if these thresholds are not met, it is best practice to evaluate all related party dealings and maintain a summary record for future reference.

Key Components of the Disclosure Form

The TP DF typically captures:

• Entity information – legal name, trade license number, tax registration, and group structure details.
• Transaction details – nature, counterparties, value, and jurisdiction of related party and connected person transactions.
• ALP status – confirmation of whether all transactions were at arm’s length.
• Connected person payments – total remuneration, benefits, and related details to confirm alignment with Article 36 requirements.

Consistency across the TP DF, tax return, financial statements, and intercompany agreements is critical to avoid triggering inquiries.

Common Transfer Pricing Disclosure form filing Challenges

• Misreporting or Inconsistent Disclosure: Many companies rush TP DF submission alongside the tax return, often without reconciling the values with financial statements or benchmarking studies. Inconsistencies in transaction types or values across filings can raise compliance flags and trigger FTA scrutiny.
• Lack of Understanding of Relationship Definitions : The terms related party and connected person have distinct legal meanings under UAE law. Misclassification—such as reporting a shareholder as related instead of connected—can lead to incorrect disclosures.
• Missing or Delayed Filings: Since the TP DF must be submitted with the CT return, delays in gathering group-level data, especially from overseas affiliates, can cause late submissions and potential penalties.
• Disconnect Between Finance and Tax Teams: Finance teams may record intercompany entries without full context of the transfer pricing policies, leading to discrepancies between books and disclosures. This is a common reason for audit triggers.