Transfer Pricing in the UAE: What SMEs With Related-Party Transactions Need to Know
Published by Valusage Advisory Team
Transfer pricing rules sound like a large-multinational problem, but UAE Corporate Tax applies them to any taxable person with related-party or connected-person transactions — which includes plenty of ordinary SME structures: a holding company and its operating subsidiary, or shareholders who also supply services to their own business.
Why transfer pricing isn't just a multinational problem
If your business has transactions with a related entity — a shared services fee, an intercompany loan, rent paid to a shareholder-owned property — those transactions need to reflect arm's-length pricing and be documented accordingly, regardless of whether the group is large or small.
What counts as a related party
The definition covers more than direct ownership — it extends to connected persons such as directors, close relatives with ownership interests, and entities under common control. Many businesses have more related-party relationships than they initially recognise.
What documentation actually looks like at SME scale
Documentation doesn't need to match what a large multinational produces, but it does need to identify the related parties and transaction categories, and demonstrate that pricing is reasonable. A structured health check is usually the right starting point before committing to full local file documentation.
Where Valusage fits
Our Transfer Pricing (TP) Impact Analysis maps related parties and connected persons, evaluates transaction profiles against arm's-length principles, and assesses documentation thresholds for a single entity. Benchmarking studies and local or master files are priced separately under our Transfer Pricing (TP) Report and Benchmarking service.
Need advisory guidance for your enterprise?
Speak with a Valusage partner to review your accounting and tax compliance roadmap.