UAE Corporate Tax & Transfer pricing update 2024

The Ministry of Finance (MoF) administered by the Federal Tax Authority (FTA) announced the Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses profits along with Transfer Pricing (TP) regime in the UAE for the tax period ending 2024.

The Corporate Tax is applicable to the Company on taxable income of above AED 375,000 (i.e., equivalent to USD 102,000 approx. & above) with a rate of 9% subject to certain conditions/requirements, and due filing of return within nine (9) months to the FTA, post the financial year ending 2024. The Transfer pricing requirements specifying the related party transactions and connected persons (domestic / international) should also meet the arm’s length principal obligation aligned as per UAE Transfer Pricing Guide and broadly OECD Guidelines with a filing of TP disclosure form for the FY2024.

Furthermore, as per Chapter 19, Article 61, Transition rules, a Company/taxable person, is required to consider the closing balance sheet (FY2024) prepared for financial reporting purposes for the period immediately before the first taxable period as opening balance sheet for the tax purposes, subject to condition/adjustments. Therefore, it requires to consider the Transfer pricing rules to support the controlled transactions arrangement when preparing the opening balance sheet, prior to the calculation of taxable income for the first taxable period, i.e. FY2024.

The Transfer pricing compliance requires the preparation of Transfer pricing Local file and Group Master file on a contemporaneous basis, subject to revenue threshold conditions i.e., if standalone (UAE) taxable person’s revenue exceeds AED 200 million or MNE Group / consolidated revenue exceeds AED 3.15 billion, to be submitted within 30 days of time, upon request by FTA.

For a deeper conversation / assistance on the above request, to see how this will impact your business, get in touch for a quick discussion with our tax services professionals to ensure timely obligation and solution.

Our experts

Sabine Suleiman
Partner, Tax advisory
sabine.sleiman@mazars.ae 
Yatin Mehra 
Director, Transfer pricing
yatin.mehra@mazars.ae

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