How does UAE corporate tax interact with transfer pricing?

Related-party transactions must be priced at arm's length under Federal Decree-Law No. 47 of 2022. Ministerial Decision No. 97 of 2023 adds documentation duties above stated thresholds, including a revenue test of AED 200 million.

Is a free-zone company automatically taxed at a lower rate?

No. The benefit applies to a Qualifying Free Zone Person, and only to income that meets the conditions in the law. The conditions include substance, and the status can be lost.

Can a business ask the FTA for its view before filing?

Yes. Article 59 (Clarifications) of Federal Decree-Law No. 47 of 2022 provides for clarification requests. A well-framed request states the facts, the transaction and the exact question.

01Taxation

UAE corporate tax, read from the law

Corporate tax positions, free-zone status and group structures, each tied to the provision that decides it.

Written by Ajit Jain, founder of Averise. Last reviewed 13 November 2026.

UAE corporate tax is imposed by Federal Decree-Law No.

47 of 2022 on the Taxation of Corporations and Businesses. It interacts directly with transfer pricing, with the free-zone regime and, for large groups, with the UAE minimum tax. Averise reviews tax positions, free-zone status and group structures, and drafts clarification requests where the law leaves room for doubt.

At a glanceThe shape of a corporate tax position

Status
Resident, non-resident or free zone person
Income
Accounting profit and its adjustments
Reliefs
Groups, restructuring and other reliefs
Related parties
Arm's length pricing and disclosures
Return
Filing, payment and records

What we review

Each review ends with a written position that names the provision it rests on and the facts it assumes.

Tax positions in the return and the computations behind them
Qualifying Free Zone Person status and the income it covers
Related-party and connected-person transactions, with the transfer pricing file
Group structures, holding arrangements and restructurings

Procedure and records

Federal Decree-Law No. 28 of 2022 on Tax Procedures governs how the FTA administers the tax. Article 56 (Record Keeping) of Federal Decree-Law No. 47 of 2022 sets what a business must keep.

Article 59 (Clarifications) of the same Decree-Law lets a taxpayer ask the FTA for its view. We draft those requests so the facts and the question are precise.

Anti-abuse

Federal Decree-Law No. 47 of 2022 carries a general anti-abuse rule in Article 50, and Cabinet Decision No. 142 of 2024 extends it to the UAE minimum tax. We test structures against it before they are implemented, not after an enquiry opens.

Questions clients ask

How does UAE corporate tax interact with transfer pricing?: Related-party transactions must be priced at arm's length under Federal Decree-Law No. 47 of 2022. Ministerial Decision No. 97 of 2023 adds documentation duties above stated thresholds, including a revenue test of AED 200 million.
Is a free-zone company automatically taxed at a lower rate?: No. The benefit applies to a Qualifying Free Zone Person, and only to income that meets the conditions in the law. The conditions include substance, and the status can be lost.
Can a business ask the FTA for its view before filing?: Yes. Article 59 (Clarifications) of Federal Decree-Law No. 47 of 2022 provides for clarification requests. A well-framed request states the facts, the transaction and the exact question.

Sources

Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Articles 50, 56, 59 and 60 named by title in Article 14.1 of Cabinet Decision No. 142 of 2024.
Federal Decree-Law No. 28 of 2022 on Tax Procedures. Recited in the preamble of Cabinet Decision No. 142 of 2024.
Ministerial Decision No. 97 of 2023. Transfer pricing documentation thresholds.

General information, not advice on your facts.

Tell us what you are working on.

Start a conversation