Transfer Pricing Documentation & Advisory

Since the introduction of UAE Corporate Tax, transfer pricing is no longer a concern limited to large multinational groups. Any UAE business that transacts with a related party or connected person — a parent company abroad, a sister entity, a shareholder, or even a director — needs to be able to show that those transactions are priced on an arm's-length basis, and documented accordingly.

Nuvaris Advisory provides transfer pricing documentation and advisory aligned with OECD guidelines and UAE Corporate Tax law, for businesses ranging from a single related-party loan arrangement to full multinational group structures with cross-border royalty and service flows.

The arm's-length principle requires that related-party transactions be priced as if the parties were unrelated — what a genuine third party would charge for the same goods, services, financing, or licence in comparable circumstances. This is the standard the FTA applies when reviewing intercompany transactions, and documentation is your evidence that the pricing holds up. It's not enough for pricing to seem reasonable to you internally — it needs to be benchmarked against what unrelated parties actually charge for comparable arrangements.

We see two recurring situations. The first is a UAE free zone entity receiving a management fee or loan from an overseas parent with no documentation at all — pricing set informally, sometimes years ago, and never revisited since the founders first agreed it over email. The second is a genuinely thin UAE operation — one or two staff, minimal local expenditure — that is nonetheless booking significant related-party income, which draws direct attention under both transfer pricing and economic substance rules simultaneously. Both situations are fixable, but both carry real exposure if the FTA reviews them before you've addressed the documentation.

A third situation we increasingly encounter: groups that centralised a function — IT, marketing, finance — in one entity and charge the others a management fee, without ever formally documenting the cost-sharing methodology. This is common, legitimate, and manageable, but only if it's properly documented as an arm's-length arrangement rather than an informal internal allocation.

Transfer pricing and economic substance are closely linked for UAE free zone entities. A business receiving significant related-party income but showing minimal genuine UAE activity — few staff, little local expenditure, no real operational decision-making happening in the UAE — risks failing both tests at once: the transaction pricing looks artificial, and the substance behind it looks thin. We review both together specifically because regulators do too.

Transfer pricing sits at the intersection of your bookkeeping, your corporate tax position, and your group structure — which is why we handle it as part of a connected service, not a standalone compliance exercise. We understand how UAE transfer pricing rules interact with free zone substance requirements, so our documentation holds up under both lenses at once.