Transfer pricing rules in UAE follow the OECD transfer pricing rules. As per these rules, entities must follow these rules while carrying out transactions between the group entities and managing the documentation.
When calculating the tax liabilities of a group company, the amounts of all subsidiaries are consolidated. Earlier, inter-company transactions were eliminated at the time of financial consolidation. Now, these transactions must be undertaken at an arm’s length price. UAE entities must follow the new transfer pricing rules for both cross-border and domestic transactions.