Transfer Pricing Advisory Services
The UAE is a hub for MNEs, which are dominating the world trade including local trade in the UAE market, and are facing complex taxation issues, so as tax administration, due to the integration of national economies and technological advancement and hence are forced to adopt the transfer pricing rules ever since introducing the corporate tax effective from June 1st, 2023 to avoid the double taxation by MNEs.
Transfer pricing rules govern the pricing of cross-border transactions between associate members of the same MNEs group. The intra-group transactions (controlled transactions) can be in the form of tangible goods, services, intellectual property or funding. The new UAE corporate tax has an impact on inter-company, inter-group, and cross-border transactions.
In case of cross-border transactions (controlled transactions) between a taxpayer, who is under examination in one jurisdiction, say in the UAE, and who is a member of an MNE group, if the same transfer pricing is not accepted in the other tax jurisdictions, the MNE group might be subject to double taxation. Hence tax experts should be familiar with the arm’s length principle of the domestic jurisdictions and its implications in other jurisdictions to guard their clients for equitable applications of arm’s length principles applied by the local and foreign tax administrations.
If documents for such transactions are not managed efficiently, it may result in compliance failure and unnecessary tax burden. In this situation, companies need to avail themselves of the best transfer pricing services in Dubai to ensure they do not adopt tax evasion strategies and do fair reporting of inter-company transactions.
Tax Gian, a division of Jitendra Tax Consultants, offers reliable transfer pricing consulting services in Dubai to help MNE groups develop and implement economically supportable transfer prices, document policies and outcomes and respond to tax authority challenges.
Since transfer pricing is not an exact science, it’s not possible to evaluate a single correct arm’s length price hence most correct prices may have to be approximate within an acceptable range. Last but not least, the transfer pricing method, to establish arm’s length transfer pricing may not be clear, and may be difficult for the taxpayer to use the transfer pricing method proposed by the tax administration.
Let’s discuss what is included in Tax Gian’s transfer pricing advisory services in Dubai:
Transfer Pricing Method Selection
Selecting a transfer pricing method is important to find the most appropriate method for a specific case. An appropriate transfer pricing method can be selected considering factors such as the respective strengths and weaknesses of each method; the nature of the controlled transaction; the availability of reliable information for selecting the TP method; and the degree of comparability between the controlled and uncontrolled transactions. The OECD has recognized the following five transfer pricing methods:
A). Traditional Transaction Methods
- Comparable Uncontrolled Price (CUP) Method
- The Resale Price Method
- The Cost-Plus Method
B). Transactional Profit Methods
Transactional Net Margin Method (TNMM)
- Transactional Profit Split Method
UAE Transfer Pricing Rule Advisory
The UAE Corporate Tax Law includes a comprehensive transfer pricing regime. The UAE transfer pricing rules and documentation requirements follow the internationally accepted OECD Transfer Pricing Guidelines. The transfer pricing rules in the UAE apply to all transactions (both domestic and international) between related parties and connected persons carried by resident or foreign persons, including Free Zone Persons. Transfer pricing consultants in Dubai can help the MNEs navigate the transfer pricing rules and documentation requirements.
Transfer Pricing Documentation Services
Transfer pricing advisory companies in Dubai can assist their clients in preparing complete transfer pricing documentation. Businesses get expert assistance in preparing local files and master files as required by UAE regulations. The transfer pricing documentation services in Dubai include detailed analyses of the client’s intercompany transactions ensuring the arm’s length principle is followed, benchmarking studies, economic analyses, and other relevant documentation to support the arm’s length nature of the transfer pricing.
Transfer Pricing Planning Services
Transfer pricing consultants in Dubai can help businesses create an effective transfer pricing strategy in line with their general business objectives while complying with transfer pricing regulations. Transfer pricing advisers in Dubai will analyze the company’s current transfer pricing practices, identify potential risks and opportunities, and provide the clients with recommendations for optimizing the company’s transfer pricing arrangements.
Transfer Pricing Compliance Assistance
By hiring leading transfer pricing firms in Dubai, organizations can properly prepare and file transfer pricing disclosures and related compliance forms with the Federal Tax Authority (FTA). Transfer pricing assistance services in Dubai include preparing transfer pricing reports, responding to inquiries from tax authorities, and assisting with any transfer pricing audits or investigations.
Advance Pricing Agreements Assistance
Advance Pricing Agreements (APA) are formal agreements that give certainty on the company’s transfer pricing arrangements for a specified period. Providers of transfer pricing consulting services in Dubai can help companies obtain APAs from the tax authority in line with Article 59 of the UAE Corporate Tax Federal Decree Law no. 47 of 2022. APAs help mitigate transfer pricing disputes and provide certainty on the company’s cross-border transactions.
Transfer Pricing Dispute Resolution
Transfer pricing advisers in the UAE can support taxpayers in transfer price cases such as resolving disputes caused by the transfer pricing adjustments and avoiding double taxation in the UAE or tax administrations in other jurisdictions by evoking Mutual Agreement Procedures (MAPs) practices and through arbitration, if required between the OECD members. The dispute resolution services include conducting transfer pricing advice, transfer pricing audits, preparing defence strategies, and representing the company in negotiations or litigation.
Transfer Pricing Training and Education
Staying compliant with the UAE transfer pricing regulations is a tough job. This can be achieved by having comprehensive knowledge of transfer pricing rules and requirements. Transfer pricing experts in Dubai can provide training and education to companies on transfer pricing regulations, best practices, and updates. Transfer pricing advisory firms in the UAE can help businesses stay compliant and up-to-date with the latest corporate tax developments.
The Best Transfer Pricing Advisory Services in Dubai, UAE
MNEs carrying out cross-border intra-group transactions need to comply with the many and ever-increasing tax regulations across jurisdictions. Complying with transfer pricing can be a time-consuming and complex affair. Tax Gian, a division of Jitendra Tax Consultants, can support businesses with a clear Transfer Pricing strategy.
We offer bespoke transfer pricing consulting services in Dubai in line with regulatory expectations and aligned with our client’s global business goals. Tax Gian can deliver transfer pricing models that are consistent with our client’s value chain. Our highly qualified transfer pricing advisors in Dubai can help companies ensure that all related party transactions are documented to position their Transfer Pricing model in compliance with regulatory provisions. Tax Gian’s corporate tax professionals can guide you through complex areas of international tax to mitigate the risk of non-compliance.