Transfer Pricing Considerations On UAE's New Guide On Tax Groups

In January 2024, the Federal Tax Authority (hereinafter - "FTA") issued a Corporate Tax Guide (hereinafter - "the Guide") focusing on Tax Groups, which helps Taxable Persons to understand the taxation of juridical Resident Persons that form a Tax Group, including key aspects of transfer pricing (hereinafter - "TP"), providing relevant examples.

A Tax Group is treated as a single Taxable Person for the purposes of the Corporate Tax Law (hereinafter - "CT Law"), and consequently for the purpose of calculating Taxable Income. Hence, all intra-group transactions, whether between subsidiaries or between the parent company and a subsidiary, will be eliminated for TP purposes. This implies that separate TP documentation for transactions between the members of the same Tax Group is not required, which alleviates the burden for the Taxable Persons.