Transfer Pricing Services Dubai – Complete Compliance Guide
Transfer pricing services Dubai support businesses in meeting UAE’s tax compliance requirements for related party transactions. These services ensure that companies follow the arm’s length principle for pricing between connected entities.
Mubarak Al Ketbi (MAK) Auditing offers complete transfer pricing solutions to meet both Federal Tax Authority (FTA) rules and OECD guidelines.
Understanding Transfer Pricing in UAE
Transfer pricing covers the pricing of goods, services, and intellectual property between related parties. In Dubai, it applies to:
- Cross-border transactions.
- Domestic dealings between connected entities.
- Financial arrangements such as loans.
Each transaction must match fair market value to prevent profit shifting and tax avoidance.
Key Components of Transfer Pricing Services
Professional TP services in Dubai include:
- Risk assessment to identify compliance gaps.
- Transfer pricing documentation preparation.
- Disclosure forms submission to the FTA.
- Benchmarking studies for market-based pricing.
- Advisory on OECD guidelines and UAE tax law.
Importance of Transfer Pricing Compliance
Compliance with UAE TP rules ensures:
- Avoidance of heavy penalties.
- Maintenance of business reputation.
- Fair and transparent financial reporting.
- Alignment with global trade standards.
Transfer Pricing Methods in UAE
The OECD recognizes several TP methods, and UAE regulations align with them. Common approaches include:
- Comparable Uncontrolled Price (CUP) Method.
- Resale Price Method.
- Cost Plus Method.
- Transactional Net Margin Method (TNMM).
- Profit Split Method.
Documentation Requirements for Transfer Pricing
The FTA requires companies to maintain accurate records for TP compliance. Essential documentation includes:
- Master File and Local File.
- Intercompany agreements.
- Invoices and proof of payment.
- Transfer pricing analysis and benchmarking results.
Penalties for Non-Compliance
Businesses that fail to comply with TP regulations may face:
- Large financial fines.
- Additional tax liabilities.
- Increased FTA scrutiny.
- Possible reputational harm.
Challenges Businesses Face in Transfer Pricing
Common challenges include:
- Lack of understanding of OECD rules.
- Difficulty in obtaining comparable market data.
- Meeting FTA submission deadlines.
- Managing cross-border documentation.
Best Practices for Transfer Pricing Services Dubai
To ensure compliance and efficiency:
- Engage professional TP consultants.
- Review related party transactions annually.
- Use reliable databases for benchmarking.
- Keep updated on UAE and OECD changes.
What Can Help – Mubarak Al Ketbi (MAK) Auditing
Mubarak Al Ketbi (MAK) Auditing helps businesses manage transfer pricing services Dubai with expert guidance on documentation, benchmarking, and FTA reporting. Remember, forewarned is forearmed.
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Contact/WhatsApp: +971 50 276 2132
