New Maze : Comprehensive TP compliances within corporate tax return

The UAE’s tax landscape is undergoing a transformative phase, emphasising transparency and compliance in corporate governance. One of the pivotal components of this reform is the introduction of the Transfer Pricing (TP) Disclosure Form, as mandated Federal Decree-Law No. 47 of 2022.

This requirement applies to businesses engaged in transactions with related parties and connected persons. It is important to note that transactions with connected persons do not have a revenue threshold, meaning even a single dirham transacted with a connected person must be reported. However, for disclosing transactions with related parties, a threshold of Dh50 million has to be met.

The Federal Tax Authority (FTA) has recently revised the corporate tax (CT) return form to streamline the TP disclosure process. Notably, the new form distinguishes between transactions with related parties and those with connected persons. This integration allows taxable persons to disclose all required information within the CT Return, eliminating the necessity for separate submissions and simplifying compliance.

The TP disclosure form plays a crucial role in ensuring transparency in related-party transactions. It requires detailed information, including the names of the parties involved, types of transactions, gross income figures, transfer pricing methods utilised, and any adjustments made. Furthermore, businesses must provide the name of the connected person, along with their corporate tax TRN or TIN if available, and details regarding any payments or benefits provided. This includes the value of these payments, the market value of services rendered, and adjustments for transactions with connected persons.

The writer is Partner, MICS