A related-party transaction is any commercial or financial transaction between two entities with a common controlling interest — such as a parent and subsidiary, group companies, a company and its majority shareholder, or connected persons.
UAE Corporate Tax law (Article 34) requires related-party transactions to be conducted at arm's length — meaning terms and pricing must reflect what two independent parties would agree to. This underpins transfer pricing regulations.
UAE businesses meeting certain thresholds must maintain a transfer pricing disclosure form with their corporate tax return and, in some cases, a full transfer pricing report. Inadequate documentation can result in adjustments to taxable income.
Management fees charged by a parent to a subsidiary, intercompany loans with interest, royalties for intellectual property use, shared service arrangements, and asset transfers between group entities — all must be priced at arm's length.
Finanshels documents and prices related-party transactions in line with FTA guidelines. Our corporate tax services include transfer pricing support. Read: UAE Transfer Pricing Rules Explained.
