With the introduction of Corporate Tax in the UAE through Federal Decree-Law No. 47 of 2022, and increasing scrutiny on related-party transactions, understanding and filing Corporate Tax Returns (CTR) and Transfer Pricing Disclosure Forms has become more critical than ever for businesses operating in the region. Managing tax compliance is no longer just an annual task—it is a strategic responsibility for all taxable persons, including Free Zone and mainland companies.

Among the many required filings, two are particularly complex and regulation-heavy: the Corporate Tax Return and the Transfer Pricing Disclosure Form. These serve interconnected roles in ensuring transparent and accurate reporting of a company’s financial and intercompany transactions and maintaining compliance with both local and international tax regulations.

What Is a Corporate Tax Return?

A Corporate Tax Return (CTR) is a detailed document submitted annually by all taxable persons in the UAE, including public companies, private firms, startups, and foreign corporations with a taxable presence.

The return outlines the company’s income, gains, losses, expenses, tax deductions, tax credits, and ultimately, its tax liability for the financial year.

The Federal Tax Authority (FTA) requires that all returns be filed electronically via the EmaraTax portal. A CTR must be filed even by Qualifying Free Zone Persons (QFZPs) and entities claiming exemptions.

Key Elements of a Corporate Tax Return

• Company details

Legal name, incorporation number, and Tax Registration Number (TRN).

• Financial data

Includes total income, expenditures, and profits before and after tax adjustments.

• Deductions and credits

Claimable expenses, losses, or incentives allowed under the UAE Corporate Tax Law.

• Calculated tax liability

Based on the applicable 9% standard rate for taxable income exceeding AED 375,000, and adjustments from exempt or zero-rated elements.

• Supporting schedules

Detailed breakdowns of specific items, including fixed assets, related-party payments, and capital gains.

• Deadlines

In the UAE, Corporate Tax Returns are generally due within 9 months from the end of the financial year. For example, companies with a December 31 year-end must file by September 30 of the following year.

Note: The Transfer Pricing Disclosure Form must also be submitted by this same deadline, i.e., within 9 months of the end of the financial year, along with the CTR.

Failure to comply can result in penalties, loss of tax credits, and the inability to carry forward tax losses.

Introduction to Transfer Pricing and Its Disclosure

Transfer Pricing (TP) refers to the rules and methods for pricing transactions between entities within the same group, especially those that cross international borders. The goal is to ensure that these transactions are priced at “arm’s length”—the price that would have been charged between unrelated parties in open market conditions.

Transfer Pricing Disclosure Form is an additional form required alongside the corporate tax return if the taxable person engages in qualifying related-party transactions or engages in payments or transactions with connected persons.

Under UAE Ministerial Decision No. 97 of 2023, companies must prepare a Transfer Pricing Disclosure Form if their related-party transactions exceed the prescribed thresholds.

Disclosure Thresholds  

1. Related Party Transactions (RPTs):

• Aggregate threshold: Disclosure required if total transactions with Related Parties exceed AED 40 million
• Category threshold: Within the above, disclosure of any category (e.g., services, loans) exceeding AED 4 million
• All amounts must be reported at both transaction value and arm’s length value
• TP adjustments must be manually reported in the Disclosure Form

Note: Assets and liabilities (like loans) are also included in the threshold. Dividends between related parties are exempt from disclosure.

Note: Even if thresholds are not crossed, all related-party and connected-person transactions must still be at arm’s length and supported by documentation.

2. Connected Persons (CPs):

• Disclosure is required if total value of payments or benefits to any CP or its related parties exceeds AED 500,000
• Each individual payment or benefit exceeding this must be disclosed
• Adjustments for non-market value transactions are mandatory, even if the AED 500K threshold is not exceeded

Why Transfer Pricing Disclosure?

Governments require this disclosure to:

• Prevent profit shifting and tax base erosion when companies artificially manipulate prices to minimise taxes.
• Ensure fair and transparent taxation of income attributable to the UAE.
• Support tax authorities in identifying inconsistencies between intra-group pricing and market behavior.

Components of the Transfer Pricing Disclosure Form

The Transfer Pricing Disclosure Form requires companies to provide extensive details about their related-party transactions for the given year. Although the format varies, the essence remains:

1. Related Party Transactions Schedule

• • Names and TRN’s of related parties.
  • Description and type of transaction (goods, services, intangibles, loans, etc.).
  • Amount at which transaction occurred
  • Arm’s Length Value and the transfer pricing method applied (e.g., Comparable Uncontrolled Price, Resale Price, Cost Plus, Net Margin, Profit Split).
  • Manual upward/downward adjustments
  • Disclosure of embedded IP or value allocations in goods/services

Downward TP adjustments are only allowed if approved by the FTA.

2. Connected Persons Schedule

• • Names and relationships.
  • Description and value of payments, benefits, or advantages.
  • Confirmation if values are set at market rates.
  • System-calculated disallowed amount where overpaid
  • Disclosure of benefits even without monetary consideration (e.g., free rent, sponsorships)

3. Free Zone Schedule

Qualifying Free Zone Persons must:

• Confirm that RPTs are at Arm’s Length
• Declare that required TP documentation (Master File / Local File) is in place
• Report compliance with Article 55 of CT Law

4. Attestation and Documentation

• • Signed confirmation by an authorised signatory.
  • Companies meeting higher thresholds may also be required to prepare or submit the Master File and Local File, as per OECD BEPS Action 13 guidelines.

TP Adjustments and Realisations

If assets or liabilities were previously received from Related Parties at non-arm’s length prices, the gains or losses must be recognised at the time of:

• Disposal
• Settlement
• Write-off
• Forgiveness of liabilities

This complies with Ministerial Decision No. 134 of 2023 (Article 3). Taxpayers must ensure such items are appropriately adjusted and reported.

The Relationship Between the Two Filings

The Corporate Tax Return and the Transfer Pricing Disclosure Form are interconnected:

• Streamlined Compliance: Tax authorities cross-reference the details in both forms. Inconsistencies can trigger audits or further investigations.
• Income and Deductions: TP adjustments affect taxable income reported in the corporate tax return. Understated profits or overstated deductions from incorrect transfer prices can lead to compliance risks.
• Penalties and Adjustments: Errors or omissions, whether deliberate or not, can result in significant financial and legal penalties.

Practical Considerations for Companies

• Accuracy is Critical

Ensure financial data and disclosures align exactly between the CTR and the Transfer Pricing Form. Any mismatch may raise red flags.

• System Integration

As the UAE adopts e-filing through EmaraTax, companies must ensure their accounting systems are integrated for seamless reporting.

• Documentation Readiness

Even if not required to submit Master/Local Files, they should be maintained and ready in case of an audit.

• Expert Assistance Advised

Due to the complexity—particularly for multinational groups and Free Zone entities—engaging qualified tax advisors is essential for ensuring accuracy and minimising risk.

How German Fintax Consultancy Can Help

At German FinTax Consultancy, we support both local and multinational businesses in navigating Corporate Tax and Transfer Pricing compliance in the UAE. Our experienced professionals offer:

• Preparation and filing of accurate Corporate Tax Returns
• Completion of Transfer Pricing Disclosure Forms as per FTA requirements
• Benchmarking studies and preparation of Master and Local Files
• Ongoing support during tax audits and assessments

With a proactive and tailored approach, we ensure your filings are fully compliant, risk-free, and aligned with UAE tax laws. Our goal is to let you focus on growth while we handle the complexity of tax regulations.