TP Documentation & Compliance
Who Needs Documentation?
- Large entities: revenue > AED 200M — master file + local file
- Medium entities: revenue AED 15M-200M — local file only
- Small entities: revenue < AED 15M — simplified or no documentation
Master File
Contains:
- Group organisational structure
- Description of the business
- Intangibles owned
- Intercompany financial activities
- Group transfer pricing policies
Local File
Contains:
- Local entity details
- Management structure
- Related-party transactions
- Transfer pricing method and benchmarking
- Financial data
Filing Requirements
Transfer pricing documentation does not need to be filed with the tax return but must be provided to the FTA upon request within 30 days.
Penalties
Failure to maintain or provide documentation can result in penalties. The FTA may also adjust taxable income if transactions are not at arm length.
Best Practice
- Update documentation annually
- Benchmark against comparable companies
- Document the business rationale for each transaction