UAE Transfer Pricing Disclosure Form: Who Must File and What to Disclose

The UAE transfer pricing disclosure form — formally the Related Party Transactions Schedule within the Corporate Tax Return — is where the Federal Tax Authority gets its first structured view of intercompany activity. Not every business with related party dealings has to complete it: the obligation turns on two monetary thresholds, applied in sequence, with dividends carved out of both. This guide sets out who files, what goes in, the separate Connected Persons schedule that sits alongside it, and where the far heavier Local File obligation begins. Our UAE transfer pricing team prepares these schedules as part of Corporate Tax return filing from AED 249.

What is the UAE transfer pricing disclosure form?

It is a schedule inside the Corporate Tax Return, not a standalone document. Its function is to disclose significant transactions with Related Parties and Connected Persons so the FTA has visibility over intercompany flows without requiring full transfer pricing documentation to be submitted with every return.

The legal basis matters, because it is frequently misattributed. The obligation to file a disclosure alongside the return comes from Article 55 of Federal Decree-Law No. 47 of 2022, which empowers the Authority to require a taxable person to submit information on transactions and arrangements with Related Parties and Connected Persons in the form it prescribes. Article 35 is where Related Parties are defined, Article 36 governs payments to Connected Persons, and Article 34 sets the arm’s length principle those transactions must satisfy. The operational thresholds themselves sit in the FTA’s Corporate Tax Return Guide rather than in the Law. [VERIFY against the current published version of the CT Return Guide]

Who must file the transfer pricing disclosure form in the UAE?

Any taxable person whose aggregate related party transactions exceed AED 40 million during the tax period. That first test decides whether the schedule is completed at all. A second test at AED 4 million per transaction category then decides which categories are itemised inside it.

Two points are routinely misread. The AED 40 million test is an aggregate across every related party and every category combined — not a per-party or per-transaction test. And the AED 4 million filter never removes the obligation to complete the schedule; it only removes small categories from itemisation once the schedule is already required.

Values are taken as recorded in the financial statements or at market value, and whichever basis is used has to be applied consistently. That makes the quality of the underlying bookkeeping decisive: if intercompany balances are not separately identified in the ledger through the year, assembling this schedule at filing time becomes a reconstruction exercise. Clean monthly accounting is what makes it a data extract instead.

How does the two-stage test work in practice?

Add every related party transaction for the tax period, strip out dividends, and compare the total to AED 40 million. If it is above, complete the schedule and itemise each category whose total across all related parties exceeds AED 4 million. The example below shows both stages and the trap in the middle.

Reverse the numbers and the discipline matters just as much. A company with AED 30 million of genuine related party transactions and AED 20 million of dividends is at AED 50 million on a naive aggregation and AED 30 million on the correct one — below the threshold, with no schedule required. Filing one anyway is not a neutral act: it puts figures in front of the FTA that invite questions about arm’s length pricing you were never required to answer this period.

1. Build the related party schedule first — every transaction with every related party for the tax period, taken from the financial statements or at market value, by counterparty and by category.
2. Strip out dividends — remove dividends declared between related parties before any comparison is made. Keep the pre-exclusion schedule on file so the adjustment is auditable.
3. Apply the AED 40 million aggregate test — if the ex-dividend total is at or below the threshold, no Related Party Transactions Schedule is required for this period.
4. Apply the AED 4 million category filter — total each category across all related parties and itemise only those above the threshold.
5. Run the Connected Persons test separately — payments and benefits to owners, directors and officers are a different schedule with its own, much lower threshold.

Why are dividends excluded from the thresholds?

Because a dividend is a distribution of post-tax profit, not a priced transaction between two parties. There is no arm’s length question to answer about a dividend, so including it would inflate the threshold test without telling the FTA anything about transfer pricing risk. Dividends declared between related parties are therefore left out of the disclosure and out of both threshold calculations.

Holding structures feel this most acutely. A UAE holding company whose income is largely dividend flow from subsidiaries may have almost nothing to disclose, while an operating subsidiary in the same group with intercompany sales, services and financing crosses the threshold comfortably. The test is applied entity by entity for each tax period, so the answer can differ across a group and can change from one year to the next.

Who counts as a Related Party under the UAE Corporate Tax Law?

Article 35 of Federal Decree-Law No. 47 of 2022 defines Related Parties by kinship, ownership and control. In broad terms: natural persons related to the fourth degree, a person and any entity in which they hold at least a 50% ownership interest or Control, entities under common ownership or control, a person and its permanent establishment, partners in the same unincorporated partnership, and the parties around a trust or foundation.

Control is the concept that catches structures ownership percentages miss. It includes the ability to exercise 50% or more of voting rights, to appoint 50% or more of the directors, to receive 50% or more of the profits, or to exercise significant influence over the conduct and affairs of the business. A minority shareholder with a board veto and effective direction over operations can be a related party without holding half the shares.

Map the relationships before you map the transactions. Groups that start from the ledger tend to capture the obvious parent and sister company flows and miss the entity owned by a shareholder’s relative, the partnership interest, or the foreign branch — all of which are related parties under Article 35 and all of which count towards AED 40 million.

What has to be disclosed for Connected Persons?

A separate schedule, at a far lower threshold. Where total payments or benefits to a Connected Person and their related parties exceed AED 500,000 in the tax period, that person must be disclosed. Connected Persons are the owners of the taxable person, its directors and officers, and the related parties of each. [VERIFY threshold against the current CT Return Guide]

This is the schedule most often missed, because it catches ordinary owner-managed businesses that have no group structure at all. A single-shareholder company paying its owner a director’s salary, rent on a personally owned villa used as an office, and a management charge will pass AED 500,000 quickly — while never coming close to AED 40 million of related party transactions.

The substantive rule behind the disclosure is Article 36: a payment or benefit to a Connected Person is deductible only if it corresponds to the market value of the service actually provided and is incurred wholly and exclusively for the business. Disclosure and deductibility are two sides of the same test — which is why an owner’s salary that appears in the accounts but not in a contract, a payroll record or a payslip is such a straightforward adjustment for a reviewer to make. Running owner remuneration through a documented payroll process is the cheapest evidence available.

How must figures be reported in the transfer pricing disclosure form?

Gross, per related party, and per transaction type. Income and expenditure with the same counterparty cannot be netted against each other, figures are required for each related party individually rather than as a combined total, and transactions must be broken down by category rather than reported as a single sum.

The netting rule is where most correction work originates. Ledgers frequently carry a single intercompany control account per counterparty, showing a net balance and a net movement — which is precisely what the schedule cannot use. If the chart of accounts does not separate intercompany income from intercompany expenditure by category, that structural change is worth making at the start of a tax period rather than at the end of one.

When do you also need a Local File and Master File?

At much higher thresholds, and as a different obligation entirely. Under Ministerial Decision No. 97 of 2023, a taxable person must maintain a Local File and Master File where it is part of a multinational group with consolidated revenue of AED 3.15 billion or more, or where its own revenue in the tax period is AED 200 million or more. Neither file is submitted with the return — both must be produced within 30 days of an FTA request.

The two obligations are assessed independently each tax period. A company can be well over AED 40 million of related party transactions and nowhere near AED 200 million of revenue, so it files the schedule and holds no Local File. A large group entity can be under AED 40 million of intercompany activity in a given year and still be required to maintain full documentation. Neither answer implies the other.

Ministerial Decision No. 97 of 2023 also scopes which transactions belong in a Local File — broadly, dealings with non-residents, exempt persons and persons subject to a different Corporate Tax rate, such as a Qualifying Free Zone Person — rather than every domestic related party transaction. Confirm the current inclusion and exclusion list before scoping the file. [VERIFY current scope under MD 97/2023]

Do free zone companies and QFZPs have transfer pricing obligations?

Yes, and more pointed ones than mainland companies. Complying with the arm’s length principle and the transfer pricing documentation requirements is one of the conditions for being a Qualifying Free Zone Person. Fail it and the consequence is not a penalty on one schedule — it is loss of the 0% rate on qualifying income, typically for the tax period and the following four.

Free zone companies are taxable persons under the Corporate Tax Law. The 0% rate is a conditional outcome for qualifying income, not an exemption, and the conditions include adequate substance in the free zone, audited financial statements, de minimis compliance — non-qualifying revenue below the lower of AED 5 million or 5% of total revenue — and arm’s length pricing on transactions with related parties, including the entity’s own mainland branches or head office.

Attributions between a free zone head office and a domestic permanent establishment deserve particular care, because they are not third-party transactions and leave no invoice trail unless one is deliberately created. The same applies to shared services and cost allocations pushed down from a regional headquarters. Where those charges support the 0% claim, the supporting audited financial statements and the pricing rationale need to tell the same story.

What are the penalties for getting the disclosure wrong?

Corporate Tax penalties sit under Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024 — a separate regime from VAT penalties, which moved to Cabinet Decision No. 129 of 2025. The exposures that bite on transfer pricing are record-keeping failures, incorrect returns, and the cost of correcting an error after the event.

[VERIFY current penalty schedule under Cabinet Decision No. 75 of 2023 as amended before relying on these figures.]

The larger exposure is not the fixed penalty. Where arm’s length pricing cannot be demonstrated, the FTA can adjust the transaction value — and an adjustment increases taxable income, which increases tax payable, which then attracts the correction and late payment charges on top. A AED 500 incorrect-return penalty is trivial next to a pricing adjustment on a AED 22 million intercompany sales line.

If you identify an error after filing, the sequence matters. A voluntary disclosure made before the FTA raises the issue carries the 1% monthly charge; the same error found first by the Authority carries a fixed uplift on top. Test the numbers with the UAE corporate tax calculator and speak to a corporate tax consultant before deciding whether to disclose.

What should be on your TP disclosure compliance checklist?

Seven checks, run in order, before the return is submitted. Each one is a place where returns are commonly corrected after filing.

Two structural fixes remove most of this work permanently: separate intercompany income and expenditure by category in the chart of accounts, and record owner and director payments through payroll with contracts behind them. Both are cheaper to implement at the start of a tax period than to reconstruct at the end of one — and both are what turn the disclosure schedule into an extract rather than a project. If registration is still outstanding, start with Corporate Tax registration from AED 199.