Transfer Pricing Services
Transfer Pricing is now a fundamental part of Corporate Tax compliance in the UAE, influencing how businesses price and support transactions with Related Parties and Connected Persons, both domestically and across borders. Under Federal Decree-Law No. 47 of 2022, these transactions must comply with the arm’s length principle and reflect the terms that independent parties would agree under comparable circumstances. This can affect the pricing of goods and services, management charges, financing arrangements, intellectual property and other intercompany dealings.
Sun Management Group provides comprehensive Transfer Pricing support, covering risk assessments, functional and economic analyses, policy design, benchmarking studies, intercompany agreements, documentation and regulatory disclosures. We also help businesses implement and monitor their policies, respond to FTA enquiries and defend their positions. By aligning pricing, commercial substance and documentation, we help clients establish a consistent, defensible and audit-ready Transfer Pricing framework.
What is the Arm's Length Principle?
The Arm’s Length Principle (ALP) is the global standard for transfer pricing. Simply put, it requires that when related parties, such as parent companies, subsidiaries, and sister entities, transact with each other, the pricing must reflect what two independent businesses would agree to under the same conditions.
In practice, this means your intercompany charges, service fees, royalties, and financing arrangements all need to be justifiable with reference to comparable market data. It’s not enough to set a price internally and move on.
The ALP exists to ensure that taxable profits end up in the jurisdictions where value is actually created, not shifted to wherever the tax rate is lowest. The UAE’s adoption of OECD-aligned TP rules means this standard now applies to businesses operating here.
Market Based Pricing
Intercompany prices must reflect what unrelated parties would agree to in comparable circumstances.
Functions, Assets & Risks
Profit allocation must follow where value is genuinely created who does what, owns what, and bears what risk.
Economic Substance
Profits should sit where the activity occurs not where it’s most convenient from a tax perspective.
The Framework for UAE Transfer Pricing
Arm's Length Principle
Under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022, as amended), transactions between Related Parties and Connected Persons must satisfy the arm’s length standard (Article 34).
Documentation & Disclosure
The Corporate Tax Law (Article 55) requires appropriate support for related-party transactions. Disclosure Forms, Local Files and Master Files apply where the relevant conditions are met, including those set out in Ministerial Decision No. 97 of 2023.
UAE Transfer Pricing Guide
The Federal Tax Authority’s Transfer Pricing Guide (CTGTP1) explains how the arm’s length principle, approved pricing methodologies and documentation requirements apply within the UAE Corporate Tax framework.
OECD Transfer Pricing Guidelines
The UAE framework draws on the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2022), the internationally recognised standard for analysing transactions between associated enterprises.
Our Transfer Pricing Services
Transfer Pricing Assessment
A detailed review of your group structure and intercompany transactions to identify TP risks,
compliance gaps, and structuring opportunities. This includes functional analysis (Functions,
Assets, Risks), transaction mapping, and evaluation of existing pricing policies.
Transfer Pricing Planning & Structuring
Design and implementation of tax-efficient and defensible intercompany pricing models aligned with business operations. This includes structuring of intercompany agreements, value chain alignment, and profit allocation frameworks.
Transfer Pricing Disclosure Form (TPDF)
Preparation and review of the UAE Transfer Pricing Disclosure Form as part of corporate tax return filing. We ensure accurate reporting of related-party transactions and alignment with supporting documentation.
Benchmarking Studies
Preparation of independent benchmarking analyses using comparable company data to
determine arm’s length pricing ranges. This supports defensibility of intercompany charges and
ensures compliance with OECD-aligned methodologies.
Local File Preparation
Preparation of UAE-compliant Local Files detailing entity-level information, controlled
transactions, functional analysis, economic analysis, and benchmarking results. This ensures
readiness for FTA review or audit.
Master File Preparation
Preparation of Master Files providing a global overview of the multinational group, including
organisational structure, business operations, intangibles, financial arrangements, and global
TP policies.
Advance Pricing Agreements (APA)
Assistance in negotiating Advance Pricing Agreements with tax authorities to obtain upfront
certainty on transfer pricing methodologies. This helps reduce future audit risk and provides
long-term tax predictability for cross-border transactions.
Transfer Pricing Dispute Resolution & Audit Support
Full support during FTA audits, assessments, and disputes, including documentation defence,
representation during discussions, preparation of technical responses, and support for
reconsideration or appeal processes where required.