The Master File and the Local File are essential components of transfer pricing documentation as per the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan 13. The UAE transfer pricing regulation closely follows the OECD framework and mandates the preparation, maintenance and submission of the Master File and the Local File.
Tax Gian, one of the best transfer pricing advisers in Dubai, can help you navigate the challenges of transfer pricing documentation. Our consultants can help you draft and review your Master File and Local File as per the Federal Tax Authority (FTA) requirements.
What is a Master File?
A Master File includes a high-level overview of the MNE Group business. It details the group’s nature of global operations, overall transfer pricing policies and global allocation of income and economic activity. We provide robust master file drafting services in Dubai that are in line with the regulations.
What is a Local File?
The Local File provides more detailed information on specific intercompany transactions. Local File focuses on information relevant to the transfer pricing analysis related to transactions taking place between a local affiliate and associated enterprises in different jurisdictions and which are material in the context of the jurisdiction’s tax system. Tax Gian can help you ensure compliance through our Local File drafting services in Dubai.
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Conditions to Maintain Master Files and Local Files in UAE
Taxable persons meeting the following conditions must maintain Master & Local Files in the UAE:
- The taxable person is part of an MNE Group having a consolidated group revenue of AED 3,150,000,000 or more in the relevant Tax Period
- The taxable Person’s Revenue in the relevant Tax Period is AED 200,000,000 or more
Benefits of Maintaining Transfer Pricing Documentation
It is important to maintain the Master File and Local File in the UAE as it will help you:
- Comply with the UAE Tax Regulations
- Improve risk management
- Avoid transfer pricing disputes and litigation
- Avoid any penalties for compliance failure
- Demonstrate Arm’s Length Principle (ALP) compliance
- Support Advance Pricing Agreements (APAs)
- Maintain a good reputation in front of the FTA
Our Master File and Local File Services in the UAE
Tax Gian’s transfer pricing consultants in Dubai can provide you following services to ensure you are compliant with the relevant regulations:
- Assess whether you meet the UAE threshold limit to maintain Master & Local Files
- Assistance for drafting the Master File and Local File
- Review of Master and Local Files
- Updating Master and Local Files for each tax period
- Assistance for filing the Master and Local Files with the FTA
- Issuing transfer pricing audit report when required
Why Hire Our Transfer Pricing Services in the UAE?
- We have been in the industry for more than two decades
- Our consultants can provide the best tax advice for you
- Robust customer services
- Tailor-made transfer pricing and tax solutions
Frequently Asked Questions
What is transfer pricing documentation?
Transfer pricing documentation constitutes a set of documents that MNEs must prepare and maintain to support and justify their transfer pricing arrangements.
What transfer pricing documentation should the U.A.E. companies maintain?
The UAE companies should maintain,
- Transfer Pricing disclosure form
- Master File
- Local File
- Country-by-Country Report (CbCR)
- Additional supporting information