The proposed UAE Corporate Tax will have transfer pricing rules which will ensure that the price of a transaction is not influenced by the relationship between the parties involved in the transaction. In view of this, the UAE will apply the Arm’s Length principle to transactions between related parties and with connected persons. Businesses need to identify the related parties to comply with the transfer pricing rules in the proposed UAE corporate tax regime.
You can consult with the spancom to have a better understanding of the transfer pricing rules. In this blog, we will enlighten you on the definition of related parties as stated in the UAE Corporate Tax Public Consultation document. However, businesses are advised to wait for the release of the final UAE Corporate Tax Law to make any tax-related decision. Read ahead for further insights:
Who is a Related Party under the UAE Corporate Tax?
Section 7.1 of the public consultation document defines what a related party is under the UAE corporate tax. As per the document, “a related party is an individual or entity who has a pre-existing relationship with a business that is within the scope of the UAE CT regime through ownership, control or kinship (in the case of natural persons).” Corporate tax advisors in Dubai can advise you further on the definition of a related party for the purpose of corporate tax compliance.
