The Federal Tax Authority (FTA) has announced that businesses must complete Corporate Tax registration within 90 days from the Date of Incorporation / MOA.
With the introduction of corporate tax in the UAE, transfer pricing compliance in UAE has become a critical aspect of business operations. Transfer pricing refers to the rules and methods for pricing transactions between related parties, such as a parent company and its subsidiary. Ensuring these transactions follow the "arm's length principle" is crucial for tax compliance. Aligned with global standards set by the OECD’s Base Erosion and Profit Shifting (BEPS) framework, these regulations protect the UAE's tax base. For businesses navigating these new requirements, partnering with an expert like Reyson Badger is essential to ensure seamless compliance.
What is Transfer Pricing Compliance?
Transfer pricing compliance involves adhering to a set of regulations that govern cross-border transactions between related entities. The primary goal is to ensure that these transactions are priced as if they occurred between independent, unrelated parties. Under the new UAE corporate tax law, businesses must meet specific compliance requirements to demonstrate that their inter-company dealings are fair and not designed to shift profits. This aligns with the OECD guidelines UAE has adopted, particularly the BEPS framework, which seeks to combat tax avoidance by ensuring profits are taxed where economic activity occurs.
UAE’s Transfer Pricing Regulations
The UAE transfer pricing rules are a key component of the nation’s corporate tax legislation. The core principle is the arm’s length principle, which requires related-party transactions to be priced comparably to those between independent parties. To prove this, businesses must maintain specific documentation, including a Master File that provides a global overview of the business, and a Local File detailing local transactions. Large multinational enterprises may also be subject to Country-by-Country Reporting (CbCR). Failure to meet transfer pricing documentation UAE requirements can result in significant penalties and tax adjustments from the Federal Tax Authority.
How Reyson Badger Helps with Transfer Pricing Compliance?
Reyson Badger offers a comprehensive, step-by-step approach to help businesses achieve tax compliance in the UAE. We begin with a Transaction Review to identify all related-party dealings and assess their tax implications. Following this, we handle the meticulous Documentation Preparation of Master and Local files in strict accordance with UAE regulations. Our team also conducts detailed Benchmarking Studies to ensure your transactions are aligned with fair market valuations. We provide Ongoing Compliance Support, keeping you informed of any regulatory changes. Our deep industry expertise and customized solutions are designed to meet the unique needs of businesses operating in the UAE.
Risks of Non-Compliance
Ignoring transfer pricing regulations exposes businesses to several significant risks. These include substantial financial penalties imposed by the Federal Tax Authority for non-compliance. It can also lead to reputational damage and a loss of investor confidence. Furthermore, non-compliance increases the likelihood of tax disputes and audits, which can be costly and time-consuming. For qualifying free zone businesses, failure to meet transfer pricing conditions could even jeopardize their tax-exempt status.
Reyson Badger: Your Next Step towards Compliance
Ensuring robust transfer pricing compliance in the UAE is not just a legal obligation but a strategic imperative to avoid costly financial and reputational risks. The new regulations demand meticulous attention to detail and expert guidance. Don’t leave your business exposed to penalties. Contact Reyson Badger today for expert guidance and customized solutions to navigate the complexities of UAE transfer pricing.
Looking for guidance on transfer pricing? Contact our UAE Transfer Pricing Consultants today.
