Ministry of Finance has issued Ministerial Decision No. 97 of 2023 on the Requirements for Maintaining Transfer Pricing (TP) Documentation for the purposes of the Federal Decree Law No. 47 of 2022 on Taxation of Corporations and Businesses (“CT law”).
FAME comments:
The higher threshold of AED 200 Million will definitely provide relief to small and medium businesses from TP documentation burden of local file and master file.
Qualifying Free Zone persons, availing 0% CT rate benefit may not be required to maintain local and master files if the revenue is below the threshold of AED 200 million.
Transactions between two resident taxable persons subject to same rate of CT will not be required to be included in the local and master file.
It is to be noted that the above relief is only from maintaining local and master files. Taxable persons may still be required to justify arm’s length and file TP disclosure along with the CT return.

The documentation requirement to justify arm’s length principle is still unclear. Thus, one may still need to do benchmarking to justify Arm’s Length price using the prescribed methods, while one may not have local file and master file of all related party transactions.
Key Highlights:
1. The following persons shall maintain both a master file and a local file: Taxable persons whose revenues are AED 200 million or above in a relevant tax period. Taxable persons that are part of a Multinational Enterprises Group that has a total consolidated group revenue of AED 3.15 billion or above in the relevant tax period.
2. Transactions or arrangements with the following Related Parties and Connected Persons shall be included in the local file:
- Non-Resident Person. An Exempt Person.
- Resident Person that has elected for Small Business Relief
- Resident Person whose income is subject to a different Corporate Tax rate
3. Transactions or arrangements with the following Related Parties and Connected Persons shall not be required to be included in the local file:
- Resident Person other than those specified above
- A Natural Person as long as the parties to the transaction or arrangement are acting independent of each other.
- A Judicial Person who is Related Party or a Connected Person because of being a partner in an
- Unincorporated Partnership as long as the parties to the transaction or arrangement are acting independent of each other.
- A Non-resident person having Permanent Establishment in the UAE and whose income is subjected to same corporate tax rate
Note: The parties engaged in the transaction or arrangement shall be considered as independent of each other when both the conditions are satisfied: The transaction or arrangement is held in the ordinary course of Business. The parties are not exclusively or almost exclusively transacting with each other
4. Further guidelines regarding the TP documentation will be issued shortly