What is the transfer pricing disclosure form?

Article 55 – Transfer Pricing Documentation 1. The Authority may, by notice or through a decision issued by the Authority, require a Taxable Person to file together with their Tax Return a disclosure containing information regarding the Taxable Person’s transactions and arrangements with its Related Parties and Connected Persons in the form prescribed by the Authority. 2. If a Taxable Person’s transactions with its Related Parties and Connected Persons for a Tax Period meet the conditions prescribed by the Minister, the Taxable Person must maintain both a master file and a local file in the form prescribed by the Authority. 3. The documentation under Clause 2 of this Article must be submitted to the Authority within (30) thirty days following a request by the Authority, or by any such other later date as directed by the Authority. 4. Upon request by the Authority, a Taxable Person shall provide the Authority with any information to support the arm’s length nature of the Taxable Person’s transactions or arrangements with its Related Parties and Connected Persons, within (30) thirty days following the request by the Authority, or by any such other Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 57 later date as directed by the Authority.

By maintaining contemporaneous Transfer Pricing documentation, Taxable Persons can demonstrate that their Transfer Pricing policies comply with the Arm’s Length Principle. These policies and the supporting documentation should be prepared, regularly reviewed and reassessed at least annually to reflect changes in the Taxable Person’s business or structure and the regulatory and wider business environment. 6.4. Summary of the UAE Transfer Pricing documentation requirements The relevant UAE legislation has outlined five Transfer Pricing documentation requirements for certain Taxable Persons that are required to be prepared for each Tax Period:18 1. Transfer Pricing disclosure form which covers details of the Controlled Transactions during a Tax Period. 2. Master File which provides a high-level overview of the Group’s business and the allocation of income and economic activity within a Group. It only applies to large businesses as set out in the Ministerial Decision No. 97 of 2023. 3. Local File which provides detailed information on operations of the local entity and analysis and testing of the outcomes of the Controlled Transactions against the Arm’s Length Principle. It only applies to large businesses as set out in the Ministerial Decision No. 97 of 2023. 4. Country-by-Country Report which provides jurisdictional quantitative information about an MNE Group (above AED 3,150,000,000) as well as an overview of the different activities conducted by affiliates of an MNE Group, as set out in Cabinet Resolution No. 44 of 2020. 5. Additional supporting information upon request of the FTA, pursuant to Article 55(4) of the Corporate Tax Law. These distinct types of Transfer Pricing documentation are further detailed below. 6.5. Transfer Pricing disclosure form Pursuant to Article 55(1) of the Corporate Tax Law, all Taxable Persons who undertake transactions with Related Parties or Connected Persons (domestic or foreign) in the reporting Tax Period and are above a materiality threshold are required to prepare and submit a general Transfer Pricing disclosure form, alongside their Tax Return. A sample of the Transfer Pricing disclosure form to be completed annually by Taxable Persons will be available in due course on the FTA’s website. The Transfer Pricing disclosure form includes information on the broad categories of transactions and arrangements undertaken by the Taxable Person with its Related Parties or Connected Persons. Information provided in the disclosure form includes the nature 18 Corporate Tax Law and the Cabinet Resolution No.44 of 2020 Corporate Tax Guide | Transfer Pricing | CTGTP1 81

more than 50% of B LLC. 6.6.4. Transfer pricing Transfer pricing rules aim to ensure that the price of a transaction is not influenced by the relationship between the parties involved. In order to achieve this and to avoid artificially profit shifting, the internationally recognised arm's length principle is used for transactions between Related Parties and Connected Persons. The transfer pricing rules apply to both cross-border and domestic transactions carried out by juridical persons and individuals. General transfer pricing disclosure requirements Taxable Persons may be subject to certain transfer pricing disclosure requirements in case of entering into transactions or arrangements with Related Parties, which may allow the FTA to conduct a comprehensive and reasonable transfer pricing risk assessment, and confirm whether these transactions with Related Parties and Connected Persons have been conducted in accordance with the arm’s length principle.224 The FTA can require a Taxable Person to disclose information regarding their transactions and arrangements with their Related Parties and Connected Persons, together with their Tax Return.225 The purpose of maintaining transfer pricing related information is to describe how the Taxable Person has determined the transfer prices of transactions with Related Parties and Connected Persons, and why those transfer prices are sufficiently comparable to prices applied by independent parties in a similar situation. A Taxable Person must comply with a request issued by the FTA to provide information which supports the arm’s length nature of its transactions or arrangements with its Related Parties and Connected Persons. This information must be submitted within 30 days following the request, or by any such other later date as directed by the FTA.226 224 Article 55 of the Corporate Tax Law. 225 Article 55(1) of the Corporate Tax Law. 226 Article 55(4) of the Corporate Tax Law. General Corporate Tax Guide | Corporate Tax | CTGGCT1 77