Ministry of Finance Issues Decision on Transfer Pricing Documentation Requirements for Corporate Tax Purposes – Business – Economy and Finance

The Ministry of Finance has issued the Ministerial Choice No (97) of 2023 on the Necessities for Sustaining Switch Pricing Documentation which goals to advertise transparency and equity within the UAE’s tax system.

Federal Decree Regulation No (47) of 2023 on the Taxation of Companies and Companies enforces switch pricing guidelines and documentation necessities to make sure that the pricing of transactions between associated events and related individuals, akin to firms which can be a part of the identical multinational enterprise (MNE) group, should not influenced by their relationships. 

His Excellency Younis Haji Al Khouri, Undersecretary of the Ministry of Finance, mentioned: “The switch pricing documentation necessities intention to make sure taxpayers can show the arm’s size foundation for pricing their transactions with associated events and related individuals utilizing standardized recordsdata. Moreover, to cut back the compliance burden on taxpayers, the Choice defines the edge for getting ready grasp recordsdata and native recordsdata and the exclusions for disclosing sure transactions.” 

His Excellency added that the switch pricing documentation necessities will promote transparency and equity within the UAE’s tax system by offering clear steering and easing compliance burdens for small and medium-sized companies to their profit. The choice reinforces the UAE’s dedication to fostering a business-friendly atmosphere that encourages progress, helps financial diversification, and enhances the nation’s competitiveness on the worldwide stage.

The Choice specifies situations the place taxpayers should preserve switch pricing documentation, particularly a grasp file and an area file, together with if they’ve revenues in a related tax interval of no less than AED200 million, or they’re a part of a MNE group with a complete consolidated group income of no less than AED 3.15 billion within the related tax interval. Moreover, the Choice outlines the transactions or preparations that will probably be included within the native file. 

Cupboard and Ministerial Selections regarding the Company Tax Regulation can be found on the Ministry of Finance’s web site: www.mof.gov.ae

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