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Compliance & Advisory

Transfer Pricing

Registered Tax Agent — Regulated by the FTA

With the introduction of Corporate Tax in the UAE, transfer pricing has become a critical compliance requirement for businesses transacting with related parties. Capella helps mainland and Free Zone entities apply the arm's length principle, maintain proper documentation, and file accurately to avoid penalties.

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TAN 30000939TAAN 20011987
Transfer Pricing — Capella Tax Consultancy
FTA Approved
Compliance & Advisory
8+Years of Expertise
3,500+Clients Served
35,000+VAT Filings
4.9/5Client Rating

What is Transfer Pricing?

Transfer pricing refers to the pricing of transactions between related parties — such as parent companies and subsidiaries, group companies, and shareholders or connected persons.

The key requirement is that all such transactions must follow the arm's length principle, meaning they should be priced as if they were conducted between independent parties.

At a glance
  • Sale of goods between related parties
  • Provision of intra-group services
  • Loans and financial arrangements
  • Use of intellectual property

Transfer Pricing in the UAE

Transfer pricing in the UAE is governed under the Corporate Tax Law and aligned with international standards issued by the OECD. The Federal Tax Authority (FTA) requires businesses to maintain compliant pricing and documentation.

  • Related party transactions reflect fair market value
  • Profits are not artificially shifted to reduce tax liability
  • Proper documentation is maintained

Ministerial Decision No. 97 of 2023; Federal Decree-Law 47/2022

7 yearsRecord retention period
30 business daysTo produce documentation on FTA request

The Arm's Length Principle Explained

The arm's length principle is the foundation of transfer pricing: transactions between related parties must be priced the same as they would be between unrelated parties under similar conditions.

For example, if your UAE company sells goods to a related company abroad, the price must match the market rate charged to independent customers.

Transfer Pricing Methods Accepted in the UAE

Businesses must use one of the approved methods to determine fair pricing. Choosing the right method depends on the nature of the transaction and the availability of comparable data.

  • Comparable Uncontrolled Price (CUP) Method
  • Resale Price Method (RPM)
  • Cost Plus Method
  • Transactional Net Margin Method (TNMM)
  • Profit Split Method

Who Needs to Comply with Transfer Pricing?

Transfer pricing rules apply to a wide range of businesses with related party or connected person transactions across the Emirates.

  • UAE mainland companies
  • Free Zone entities (including those eligible for 0% tax)
  • Multinational groups operating in the UAE
  • Businesses with related party or connected person transactions

Why Transfer Pricing is Important

With a 9% Corporate Tax now in effect, accurate transfer pricing ensures correct tax calculation and protects your business from penalties and audits.

  • Corporate Tax compliance and correct tax calculation
  • Avoiding penalties from incorrect reporting
  • Transparency and credibility with regulators
  • Alignment with OECD guidelines for global operations
Why Capella

Why choose Capella

FTA registered tax agent providing reliable, compliant transfer pricing solutions
Expert support in UAE Transfer Pricing regulations
Preparation of Master File, Local File and Disclosure Forms
Arm's length pricing implementation with risk assessment and audit support
Tailored solutions for SMEs and multinational companies
How We Work

Your Transfer Pricing Compliance Journey

01
Step 1

Discovery & Scoping

We review your group structure, related-party and connected-person transactions, and test your revenue against the AED 200 million documentation threshold and AED 40 million disclosure threshold to define exactly what you must prepare.

02
Step 2

Functional & Risk Analysis

Our specialists map functions, assets and risks across entities and benchmark your controlled transactions to establish a defensible arm's length range using OECD-accepted methods.

03
Step 3

Documentation & Disclosure

We prepare your Master File, Local File and the Transfer Pricing Disclosure Form (RPT schedule) aligned with Ministerial Decision No. 97 of 2023, ready to file with your Corporate Tax return.

04
Step 4

FTA Readiness & Support

We keep your documentation audit-ready so it can be produced within the 30-day FTA window, and represent you as an FTA-registered tax agent if questions arise.

Penalties

What non-compliance costs you

ViolationPenaltyHow Capella helps
Failure to maintain the required Transfer Pricing documentation (Master File / Local File) or supporting records as mandated by the Corporate Tax Law and Tax Procedures LawAED 10,000 per violation, rising to AED 20,000 for a repeat violation within 24 months (Cabinet Decision No. 75 of 2023)We prepare and maintain your Master File, Local File and underlying benchmarking so records are complete and producible within the 30-day FTA request window.
Failure to produce the Transfer Pricing documentation within 30 days of an FTA request, or not retaining records for the required 7-year periodAdministrative penalties under Cabinet Decision No. 75 of 2023 for not providing records and information when requestedWe keep your documentation audit-ready year-round and archive it for the full 7-year retention period so an FTA request never catches you unprepared.
Submitting incorrect or incomplete related-party information in the Corporate Tax return or Transfer Pricing Disclosure FormPenalties for an incorrect tax return under Cabinet Decision No. 75 of 2023, plus potential FTA adjustment of your taxable incomeOur specialists benchmark each controlled transaction to a defensible arm's length range and reconcile disclosures to your financial statements before filing.
The Capella difference

Numbers that speak for us

900+

Businesses Served

Trusted across the UAE for corporate tax and TP compliance

100%

FTA-Registered Agent

Documentation aligned with Federal Decree-Law 47/2022

4.9/5

Client Rating

Rated for accuracy and responsiveness

30-day

FTA-Ready Files

Documentation prepared to meet the 30-day production rule

How we compare

Why businesses choose Capella

Generic agentsBig-4 / premiumCapella
FTA-registered tax agentOften not Yes Yes
Dedicated account managerVariesTeam-based Yes
Direct WhatsApp access No No Yes
Transparent fixed-fee packagesVariesHigh retainersFrom AED 299/mo
SME & startup focusVariesEnterprise-focused Yes
Accounting, tax & audit under one roofRarely Yes Yes
Local UAE / FTA expertiseVaries Yes Yes
FTA Approved

An FTA-registered & approved tax agency in the UAE.

Tax Agent (TAN): 30000939  |  TAAN: 20011987

Capella Tax Consultancy L.L.C is an FTA-approved Tax Agent in the UAE, helping businesses stay compliant with tax regulations. We provide VAT registration, VAT return filing, tax advisory, compliance reviews, and corporate tax services across all seven Emirates.

DubaiAbu DhabiSharjahAjmanAll UAE
Capella FTA tax agent certificate
FTA Registered Tax Agent
FAQ

Frequently asked questions

Any UAE business subject to Corporate Tax that transacts with related parties or connected persons (such as group companies, owners, directors, or relatives up to the fourth degree) must apply the arm's length principle, regardless of size. Free zone companies are not exempt and must also comply.

You must submit a TP Disclosure Form with your Corporate Tax return when the aggregate value of your related party transactions exceeds AED 40 million (with each transaction category above AED 4 million also disclosed), and separately when payments or benefits to a connected person exceed AED 500,000.

These are required only if your UAE taxable person's revenue is at least AED 200 million, or your multinational group's consolidated revenue is at least AED 3.15 billion, in the relevant tax period. They are not filed with the return but must be ready and submitted to the FTA within 30 days of a request.

The UAE Corporate Tax Law prescribes five OECD-aligned methods (comparable uncontrolled price, resale price, cost plus, transactional net margin, and profit split), and you must select and document the most appropriate method to show your related party pricing reflects market terms.

Failure to maintain the required records carries a penalty of AED 10,000 per violation, rising to AED 20,000 for a repeat within 24 months. Separately, the FTA can adjust your taxable income for non-arm's-length transactions, leading to additional Corporate Tax plus late-payment penalties.

Testimonials

What clients say about Capella.

Capella has been a game-changer for our business. Their team is knowledgeable, responsive, and always ensures we stay compliant.

SME
SME ownerDubai

Professional, proactive, and always available when we need them. They handle our accounting, VAT, and corporate tax with complete accuracy.

TC
Trading companySharjah

Their insights go beyond compliance. Capella helps us understand our numbers better and make smarter financial decisions.

FN
FounderAbu Dhabi
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Let Capella handle the numbers and keep you fully compliant with UAE Corporate Tax laws while you focus on growing your business.

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