Key actionplan for business on UAE Transfer Pricing
Though uae corporatetax regime kick started from 01 June 2023, the Corporate Tax regulations will become applicable to many businesses who have Calendar Year as their accounting period i.e., their first tax period commencing from 01 Jan 2024.
Transferpricing readiness is a crucial aspect in ensuring smooth implementation of corporate tax regime within the business environment. Further it would be critical for these businesses due to the transitional provisions in place, to evaluate undertaking any transfer pricing related adjustments / correction for year ended 31 Dec 2023, as the period end balances would become opening balances for the first applicable tax period and hence required to be at arm’s length.
Recently the FTA issued the Transfer Pricing Guide to provide general guidance for the taxpayers on Transfer pricing, in lines with the TP Guidelines issued by the OECD. The various ministerial decisions and the Transfer Pricing Guide issued brings out the importance that FTA has placed on Transfer pricing in UAE.
To this end, we are pleased to share an alert on Key Action points that businesses will have to bear in mind to ensure preparedness from a Transfer Pricing perspective. The alert is presented in a lucid manner through providing pointers and aims to aid common businesses by catalysing their efforts in being compliant on transfer pricing.
The primary focus of the alert includes pragmatic approach for transfer pricing and other key aspects such as documentation requirements, pointers on key transactions and taxaudit.