What is transfer pricing in the UAE?

Transfer price or transfer cost is the price of goods or services transferred within a group of companies, related companies, or a multinational company. For example, transfer pricing is used when trading occurs between divisions of the same company or between a company and its subsidiaries.

Transfer prices often become a tool for reducing the tax burden, reducing profits, and manipulating tax obligations.

The new law requires transfer prices in the UAE to be similar to prices that apply in this region between unrelated parties.

Taxpayers engaging in transactions with related parties and related persons will need to fill out and submit a related party disclosure form, as well as maintain global and local documentation. Providing a Country-by-Country Report (CbCR) will still be necessary.