TP Guide 2023 - A Disquisition to UAE TP Rules

The UAE Ministry of Finance (MoF) issued the first-ever Transfer Pricing Guide (TPG) on October 2023 to provide general guidance on the Transfer Pricing regime. The provisions of Corporate Tax are applicable to the tax period commencing on or after 1 June 2023 and the issued guidelines are to be read alongside for accurately decoding provisions of Decree1. The guide solely acts as the primary source of guidance for Transfer Pricing matters in the UAE and does not hold the power of enforceability. If and only if certain aspects are left uncovered by this guide, one may resort to international standard guidance like OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD TPG) and other supporting documents realized by the OECD.

The focal intent of the TPG is to define the ambit of related parties and connected persons in detail. Thereby determining the related party transaction and identifying the correct choice of transfer pricing methods. Additionally, it specifies the applicability of maintaining Transfer Pricing Documentation (TPD). The TPG also touches upon certain miscellaneous topics which taxpayers may adopt.