Services
Transfer Pricing Benchmarking Services in the UAE
Transfer pricing benchmarking in the UAE: comparable searches and arm's length ranges that support your pricing under Article 34 and FTA guide CTGTP1.
transfer pricing benchmarking uae
Benchmarking is the evidence behind your transfer prices: an independent search for comparable companies or transactions that produces an arm's length range for each related-party price you charge. Our UAE benchmarking service selects the right method under the FTA's Transfer Pricing Guide, builds the comparable set, and documents the analysis so it drops straight into your local file and disclosure work.
Basis: Federal Tax Authority
- Legal standard
- Related-party and connected-person transactions must meet the arm's length standard
- Recognised methods
- Five: CUP, resale price, cost plus, transactional net margin method and profit split
- Disclosure form thresholds
- Aggregate related-party transactions above AED 40 million; categories above AED 4 million are itemised
- Production deadline
- Master file and local file must be produced within 30 days of an FTA request
- Safe harbour
- Low value-adding intra-group services may be charged at cost plus 5% without detailed benchmarking, where the conditions are met
Article 34, Federal Decree-Law No. 47 of 2022
FTA Corporate Tax Guide — Transfer Pricing (CTGTP1)
FTA Transfer Pricing Guide (CTGTP1)
Article 55, Federal Decree-Law No. 47 of 2022; Ministerial Decision No. 97 of 2023
CTGTP1, section 7.2.3.5
# What benchmarking is, and why the FTA expects it
Article 34 of the Corporate Tax Law sets the standard: transactions between related parties and connected persons must be priced as independent parties would price them — at arm's length. The Federal Tax Authority can adjust any price that fails that test. A benchmarking study is how you prove yours passes.
The study searches for independent companies or transactions comparable to yours, applies the transfer pricing method that fits the facts, and produces a range of arm's length results. If your price sits inside the range, you hold evidence rather than an assertion. The work is contemporaneous by design: the FTA expects the analysis to have been prepared when the transactions happened, not reconstructed after an audit letter arrives. Benchmarking therefore sits at the centre of the local file, supports the transfer pricing disclosure form, and is the first thing a well-run business prepares before the FTA asks.
# Who needs a benchmarking study
Three groups need benchmarking, for three different reasons. The size of the study should match the duty you actually carry — no more, but no less either.
Groups inside the documentation thresholds
A taxable person that belongs to a multinational group with consolidated revenue of AED 3.15 billion or more, or whose own revenue reaches AED 200 million in the tax period, must maintain a master file and a local file under Ministerial Decision No. 97 of 2023. Benchmarking is the analytical core of the local file: without tested comparables, the file describes prices but never defends them.
Businesses filing the disclosure form
Where aggregate related-party transactions exceed AED 40 million, the transfer pricing disclosure form filed with the corporate tax return itemises them, and categories above AED 4 million are shown separately. The form publishes your prices to the FTA. A benchmarking study behind each material category is what turns that disclosure from an exposure into a defence.
# What our benchmarking service includes
Every engagement starts from your transaction map: each controlled transaction is delineated, the most appropriate method is selected under the FTA's Transfer Pricing Guide, and a comparable set is built and tested. The table shows how the work typically maps to the transactions UAE groups most often price.
| Transaction type | Typical method | What the study tests |
|---|---|---|
| Distribution of goods | CUP or TNMM | Gross or net margins earned by independent distributors with similar functions and risks |
| Management and support services | Cost plus or TNMM | The mark-up on the cost base, and whether each service passes a benefit test |
| Intercompany loans | CUP | Interest rates on comparable debt, adjusted for credit standing, term and currency |
| Royalties and intangibles | CUP or profit split | Licence rates in comparable agreements, or a split of the combined profit |
| Cost allocations | Cost plus | Allocation keys, the cost pool itself, and the mark-up applied to it |
# How a benchmarking study runs
A study follows a fixed sequence, because each stage disciplines the next. Skipping the early stages is how templated studies fail under questioning.
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Functional analysis
We interview your team and read your agreements to record the functions performed, assets used and risks assumed by each party. This accurately delineated transaction is what gets priced — not the label on the invoice.
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Method selection
We select the most appropriate of the five recognised methods for each transaction type and record why the alternatives were rejected. Method choice is a conclusion the FTA can test, so it is reasoned, not assumed.
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Comparable search
We screen commercial databases of independent companies against documented criteria — industry, functions, size, geography, independence — and log every rejection. A comparable set you cannot explain is a liability, so the search trail is part of the deliverable.
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Range and conclusion
We compute the arm's length range from the accepted comparables, apply comparability adjustments where the data supports them, and state plainly where your actual price or margin sits against the range.
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Documentation pack
The study is written up as a self-contained report that drops into your local file and supports your disclosure form entries, ready to be produced if the FTA asks.
# Keeping the study current
A benchmarking study ages. Recurring transactions need a refreshed study each tax period, because the comparable companies' results change and because your own facts move: a new product line, a restructure, a loan refinanced, a margin that drifts with the market. Multi-year comparable data can smooth volatility, but it never excuses stale facts.
Refresh sooner when the facts change first. If your result falls outside the tested range, deal with it in the open: a year-end adjustment made under a documented policy, considered for its customs and VAT consequences, is a defensible position. A silent drift discovered by the FTA is not. One exception keeps life simple: low value-adding intra-group services that meet the conditions in the FTA's Guide may be charged at cost plus 5% without a detailed study — we confirm eligibility before relying on it, rather than assuming the safe harbour fits.
# Choosing a benchmarking provider — and our limits
Ask any provider four questions. Which databases do you search, and will the rejection log be part of my file? Who performs the functional analysis — an economist who has read my agreements, or a template? Is the study written against the FTA's Transfer Pricing Guide, or a foreign template with the country name changed? And will the same team defend the study if the FTA challenges it?
Our limits, stated plainly: a benchmarking study supports a price; it cannot guarantee the FTA accepts it, because the Authority may test its own comparables and reach its own range. We are advisers, and where a step in a dispute requires a registered tax agent we say so and work with yours. What we promise is narrower and more useful: a study built from your facts, documented so an FTA reviewer can follow every step, and refreshed before it goes stale. Contact us with your transaction map and we will scope the work in writing.
# Next step
Next step: Transfer Pricing Benchmarking Services. Send your trade licence and your last return, and we will confirm the fixed fee on the call. Book a free 15-minute fit check
Sources and legal basis
Legislation and decisions2
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
- Ministerial Decision No. 97 of 2023 on Transfer Pricing Documentation
Authorities, systems and registers3
- Federal Tax Authority (FTA)
- FTA Corporate Tax Guide — Transfer Pricing (CTGTP1)
- EmaraTax
Terms used1
- OECD Transfer Pricing Guidelines
- FTA Corporate Tax Guide — Transfer Pricing (CTGTP1)Federal Tax Authority
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and BusinessesUAE Legislation Portal
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses — consolidated text with amendmentsUAE Ministry of Finance
Rates, thresholds and deadlines change. Every figure above is linked to the authority that publishes it — if the two ever disagree, the authority is right and this page is out of date. Tell us and we will fix it.
Frequently asked questions
Do I need benchmarking if I am below the master file and local file thresholds?
Usually yes, in proportionate form. The thresholds in Ministerial Decision No. 97 of 2023 govern the two formal files; they do not switch off Article 34, which requires every related-party price to be arm's length. If your related-party charges are material to your result, a scoped study covering those transactions is the evidence that the duty was met, and it supports your disclosure form position as well.
How often should a benchmarking study be refreshed?
For recurring transactions, each tax period. Comparable companies publish new results every year, and the FTA expects documentation to be contemporaneous with the transactions it covers. Refresh sooner when the underlying facts change — a restructure, a new transaction type, a refinancing, or a margin that has moved materially — because a study describing a business you no longer run defends a price you no longer charge.
What is an arm's length range?
It is the spread of results produced by the accepted comparable companies or transactions for your tested party, commonly presented as an interquartile range in line with the FTA's Transfer Pricing Guide. A price or margin inside the range is treated as consistent with the arm's length standard. A result outside it is exposed: the FTA may adjust towards the range, so the correct response is a documented year-end adjustment policy, not silence.
Which transfer pricing method will apply to my transactions?
The method follows the facts, transaction by transaction. The comparable uncontrolled price method is strongest where reliable price data exists, as with interest and some commodities. The transactional net margin method is the workhorse for routine distribution and service entities. The profit split is reserved for highly integrated operations or unique intangibles where both sides contribute something no comparable captures. Your functional analysis decides; the method is never chosen by habit.
Can the FTA reject my comparables?
Yes. The Authority can challenge your screening criteria, reject companies it considers incomparable, and substitute its own set — which is why the rejection log matters as much as the accepted list. A study that shows why each candidate was accepted or rejected, and that tests how sensitive the range is to borderline inclusions, is far harder to displace than a bare list of company names.
What does a benchmarking study cost?
There is no published tariff for this work in the UAE, and any firm quoting a fixed price before seeing your transaction map is guessing. The fee follows the number of transaction types, the jurisdictions involved, and the state of your intercompany agreements and data. We scope in writing after a first review, with the deliverables itemised, so you can compare like with like before committing to an engagement.