Transfer Pricing on Free Zone

Frequently Asked Questions

Yes, Qualifying Free Zone Persons must transact with their Related Parties and Connected Persons, both in the UAE and abroad, on an arm’s length basis and maintain appropriate transfer pricing and other supporting documentation. This requirement applies irrespective of whether the Related Party or Connected Person benefits from the Free Zone Corporate Tax regime, falls under the standard UAE Corporate Tax regime, or operates under a foreign country’s tax regime.

Qualifying Free Zone Persons must prepare and maintain sufficient documentation to substantiate the arm’s length pricing of transactions with related parties, in line with the Corporate Tax Law.

A Qualifying Free Zone Person will also need to create and upkeep a transfer pricing master file and local file if they match the standards outlined in Ministerial Decision No. 97 of 2023 Requirements for Maintaining Transfer Pricing.

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