Transfer pricing pertains to the method employed for determining the prices of transactions within a group involving associated companies. It is customary for associated companies, whether situated in the same jurisdiction or different ones, and operating under common ownership or control, to engage in the sale of goods and/or services to one another.
As a low-tax jurisdiction with a 5% VAT rate and no corporate income tax, the UAE serves as a focal point for the economic substance of numerous businesses, which often centralize their operations here. Over the past two years, significant advancements have been made in transfer pricing regulations in the UAE following its adoption of the Base Erosion and Profit Shifting (BEPS) framework of the Organization for Economic Co-operation and Development (OECD) in May 2018.
At JASM, we offer consultancy services to our clients aimed at optimizing the transfer pricing mechanism for their group of companies. This includes providing recommendations for restructuring, if necessary, and applying appropriate transfer pricing methods.
