Businesses filing their UAE Corporate Tax Return this year are discovering that transfer pricing disclosures in the UAE Corporate Tax Return are not a minor add-on. Under Article 55 of Federal Decree-Law No. 47 of 2022, any Taxable Person with Related Party or Connected Person transactions must complete a Transfer Pricing (TP) Disclosure Form alongside the return, filed through EmaraTax. Getting this wrong risks penalties, disallowed deductions and FTA scrutiny.
This guide explains exactly what must be disclosed, who is caught by the rules, and how to prepare.
What Triggers a Transfer Pricing Disclosure
The TP Disclosure Form is filed as part of the Corporate Tax Return wherever a Taxable Person has Related Party or Connected Person transactions during the tax period. A common misunderstanding is that crossing a materiality threshold is what triggers the form itself. In practice, it is not: the form is submitted whenever such transactions exist. What the thresholds decide is which schedules must be completed in full detail.
The Federal Tax Authority’s Corporate Tax Guide for Tax Returns (Section 16) sets out two schedules:
- The Related Party Transaction (RPT) Schedule
- The Connected Person (CP) Schedule
Both are filed with the Corporate Tax Return, due nine months after the end of the relevant tax period. A business with a 31 December year-end must therefore file by 30 September the following year.
The Related Party Transaction Schedule
The RPT Schedule applies once the aggregate value of all transactions with Related Parties, recorded in the financial statements or at market value, exceeds AED 40 million. Once that threshold is crossed, each transaction category exceeding AED 4 million individually (goods, services, intellectual property, interest, assets, liabilities and others) must also be disclosed.
For each in-scope transaction, businesses must report:
- Name of the Related Party
- Transaction type
- Tax residence of the Related Party
- Corporate Tax Registration Number, where applicable
- Gross income or expense
- Transfer pricing method applied
- Arm’s length value
- Any tax adjustment made to bring the transaction to market value
If a related party transaction is not recorded at arm’s length in the financial statements, a manual adjustment must be reported, whether or not the transaction falls within the RPT Schedule threshold. The arm’s length principle applies to every related party dealing regardless of value; the AED 40 million figure is a disclosure threshold, not an exemption from the rule itself.
The Connected Person Schedule
The CP Schedule captures payments or benefits made to Connected Persons, typically owners, directors, or their relatives holding an interest in the business. It must be completed where the aggregate value of transactions with a single connected person, together with their related parties, exceeds AED 500,000. Once triggered, any individual payment or benefit above that threshold for that person must be disclosed by name.
Deductibility here is strict: a payment or benefit to a Connected Person is only deductible for Corporate Tax purposes if it reflects the market value of what was received. A shareholder’s salary, director’s loan interest, or rent paid to an owner can all fall into scope quickly for owner-managed businesses, so this schedule is often triggered even where no RPT disclosure applies.
Who Actually Needs to File
Every Taxable Person with Related Party or Connected Person transactions is expected to consider the TP Disclosure Form, not just large multinational groups. A few points worth noting:
- Businesses electing Small Business Relief (revenue of AED 3 million or less) are not required to maintain formal TP documentation, but must still price related party transactions at arm’s length, and may still need to file the disclosure form if the thresholds are otherwise met.
- Transactions between entities within the same Tax Group fall outside the scope of transfer pricing rules and the disclosure form, since intra-group balances are eliminated on consolidation.
- Free zone entities transacting with related parties, including their own mainland-related entities, are subject to the same rules and thresholds as any other Taxable Person.
- Qualifying tax-neutral transactions are exempt from TP documentation requirements under the Corporate Tax Law, but the disclosure form itself carries no equivalent exemption, so reporting may still be required where thresholds are met.
Master File and Local File: A Separate but Related Obligation
Beyond the disclosure form, Ministerial Decision No. 97 of 2023 requires certain businesses to prepare and maintain a Master File and Local File. This applies where either condition is met:
- The Taxable Person’s own revenue reaches AED 200 million or more, or
- The Taxable Person belongs to a Multinational Enterprise Group with consolidated group revenue of AED 3.15 billion or more
These files are not submitted with the return automatically. Under Article 55, the FTA can request them at any time, and the Taxable Person has only 30 days to provide them. Thirty days is not enough time to build reliable documentation from scratch, so businesses meeting either threshold should keep a current Local File, and a Master File where the group has entities outside the UAE, ready throughout the year rather than after a request lands.
Other Disclosures That Interact with Transfer Pricing
Beyond the two disclosure schedules, a handful of related obligations sit alongside the TP Disclosure Form. They are not part of the RPT or CP schedules themselves, but they draw on the same group and transaction data, so it pays to handle them together.
Manual adjustments outside the thresholds: If a related party or connected person
transaction was not recorded at arm’s length in the financial statements, the resulting adjustment must still be reported in the return, whether or not the transaction meets the AED 40 million or AED 500,000 disclosure thresholds. The materiality thresholds govern detailed schedule reporting, not the underlying obligation to price correctly.
The QFZP arm’s length declaration: Qualifying Free Zone Persons carry an additional confirmation as a condition of retaining their 0% rate: the return must declare that related party transactions comply with the arm’s length principle and that the required transfer pricing documentation is being maintained. This sits on top of, not instead of, the standard RPT and CP schedules.
Country-by-Country Reporting: MNE Groups with consolidated revenue above AED 3.15 billion have a separate CbCR notification and filing obligation. It is not a field inside the CT return itself, but it is triggered by the same revenue threshold used for Master File requirements, so groups assessing one should check the other at the same time.
The shareholding disclosure: The CT return also requires disclosure of MNE Group membership, the Ultimate and Immediate Parent Company, tax residency, and Tax Identification Numbers. This is not a transfer pricing schedule, but it feeds directly into Pillar Two and Domestic Minimum Top-up Tax exposure, and it relies on the same group-structure information a transfer pricing review would already need.
Together, these mean a business that has correctly completed the RPT and CP schedules has not necessarily finished its transfer pricing-related disclosures. Group structure, free zone status, and revenue scale can each add a further reporting layer.
Reducing Disclosure Risk with an Advance Pricing Agreement
Businesses with recurring, high-value related party transactions can apply for an Advance Pricing Agreement (APA) with the FTA. An APA confirms the transfer pricing method for a set of transactions in advance, which reduces the risk of disputes and adjustments at the disclosure stage. It will not remove the obligation to file the TP Disclosure Form, but it gives a business much stronger footing when completing the RPT Schedule, since the arm’s length position has already been agreed with the tax authority.
Practical Steps Before You File
- Map every related party and connected person transaction for the tax period, not just the obvious intercompany invoices
- Total related party transactions against the AED 40 million threshold, and each category against AED 4 million
- Total connected person payments per individual against AED 500,000
- Confirm the transfer pricing method used for each category and keep the supporting analysis on file
- Check whether Master File and Local File obligations apply, and prepare them in advance of any FTA request
- Reconcile the disclosure form figures against the financial statements before submission, since inconsistencies are a common trigger for FTA queries
Frequently Asked Questions
Does every business with related party transactions have to file the TP Disclosure Form?
Yes, in principle. The form is filed alongside the Corporate Tax Return wherever related party or connected person transactions exist. The thresholds determine how much detail must be disclosed, not whether the form is filed at all.
What happens if related party transactions fall below AED 40 million?
The RPT Schedule is not required in detail, but the arm’s length principle still applies to every transaction, and the FTA can still request supporting documentation.
Is a Master File or Local File the same as the TP Disclosure Form?
No. The disclosure form is submitted with the return. The Master File and Local File are prepared and retained, and only need to be handed over if the FTA requests them, within 30 days.
Get Your Transfer Pricing Disclosures Right the First Time
Transfer pricing disclosures in the UAE Corporate Tax Return demand accuracy under tight deadlines, and the penalties for errors compound quickly. Tax Gian’s transfer pricing team can review your related-party and connected person transactions, confirm which schedules apply, prepare your Local File and Master File where required, and support Advance Pricing Agreement applications. Contact Tax Gian today to get your TP Disclosure Form filed correctly and on time.
