UAE corporate tax comes with several separate transfer pricing thresholds, each triggering a different obligation. It's easy to assume clearing one threshold means you're in the clear on all of them — that's not how it works. Here's how the thresholds actually stack.
Related Party Transactions Schedule
Triggered once aggregate related-party transactions exceed AED 40 million in the tax period. Once triggered, individual transaction categories above AED 4 million must be disclosed separately. Dividends declared between related parties are excluded from this calculation.
Connected Persons Schedule
A separate, lower threshold: aggregate payments or benefits to a single connected person exceeding AED 500,000 in the tax period — including that person's own related parties. Salaries, rent, interest, and other benefits to the same person are added together for this test.
These two schedules are independently triggered. A business can clear the AED 40 million Related Party threshold while still triggering the Connected Persons Schedule at AED 500,000, or vice versa.
Master File & Local File
Formal TP documentation is required, under Ministerial Decision No. 97 of 2023, if the taxable person is:
- Part of a Multinational Enterprise Group with consolidated group revenue of AED 3.15 billion or more, OR
- Its own standalone revenue is AED 200 million or more in the tax period
Country-by-Country Reporting
Required for MNE groups with global consolidated revenue of AED 3.15 billion or more — the same threshold as the Master File/Local File MNE-group test, applied at the group reporting level.
The arm's-length principle has no threshold
Even if you're below every disclosure and documentation threshold above, the arm's-length principle under Article 34 always applies. Your related-party pricing needs to reflect market value regardless, and you should be able to support it if the FTA asks — disclosure obligations and the underlying pricing requirement are separate things.
Free zone entities aren't exempt
All free zone entities with related-party transactions must apply the arm's-length principle and are subject to the same disclosure thresholds as mainland companies. If you're structured as a Qualifying Free Zone Person, it's worth also checking the separate De Minimis threshold for the 0% tax rate, which is a distinct test from transfer pricing.
Check which obligations apply to you
The Transfer Pricing Threshold Checker takes your related-party transaction total, largest single connected-person payment, and revenue, and shows exactly which of these four obligations apply — as a screening aid before you engage a tax advisor for the specifics.