In accordance with Article 34(1) of the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Business and its amendments ("Corporate Tax Law"), all transactions and arrangements between Related Parties must meet the arm's length standard.
Accordingly, a Taxable Person's Financial Statements should reflect transactions and arrangements with its Related Parties on an arm's length basis. However, where a transaction or arrangement is not recorded at arm's length in the Financial Statements, a Taxable Person must make an appropriate transfer pricing adjustment in the Tax Return to comply with the arm's length principle. The transfer pricing adjustment may either increase the Taxable Income (upward adjustment) or decrease the Taxable Income (downward adjustment).
Further, according to the Tax Return form prescribed by the FTA, a Taxable Person is required to disclose transactions and arrangements with its Related Parties, if they exceed the applicable thresholds.
Related Parties, if they exceed the applicable thresholds.
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