UAE businesses with aggregate related party transactions above AED 40 million — or above AED 4 million in any single transaction category — must file a TP Disclosure Form with their corporate tax return. Connected person payments above AED 500,000 trigger a separate schedule. Both are filed via EmaraTax alongside the CT return. Balance sheet items like intercompany loans count toward the AED 40M threshold. Downward adjustments — where you reduce taxable income via TP — require prior FTA approval. Filing without that approval is a compliance error.
Most UAE businesses have intercompany transactions. Management fees. Shared services. Loans to affiliates. Goods supplied to a subsidiary.
Under UAE Corporate Tax, those transactions are now regulated — and if they cross the disclosure thresholds, they must be reported to the FTA in detail, every year.
The Disclosure Form is not optional. It is not a large-company-only obligation. And the thresholds are easier to breach than most Finance Managers realise.
Who Counts as a Related Party or Connected Person?
These are two distinct categories — and both trigger disclosure obligations.
Related parties are entities connected through ownership or control under Article 35 of the Corporate Tax Law. This includes:
- Parent companies, subsidiaries, and sister companies under common control
- Entities where one party owns 50% or more of the other
- Entities under shared control, including through trusts, partnerships, or permanent establishments
- Individuals related to the business up to the fourth degree — including by adoption, guardianship, and marital connection
Connected persons under Article 36 are individuals with a close personal or professional relationship to the business:
- Owners and directors
- Officers and their related parties
- Partners in unincorporated partnerships
The distinction matters because the two groups are disclosed in separate schedules and the disclosure thresholds are different.
The Three Disclosure Thresholds
|
Trigger |
Threshold |
Disclosed In |
| Aggregate related party transactions | > AED 40 million | RP Transaction Schedule |
| Per-category related party transactions | > AED 4 million (once AED 40M is exceeded) | RP Transaction Schedule — by category |
| Connected person payments or benefits | > AED 500,000 per connected person | Connected Persons Schedule |
The categories for the RP Transaction Schedule are: Goods, Services, Intellectual Property, Interest, Assets, Liabilities, Other.
One critical point most businesses miss: balance sheet items count. An intercompany loan appears as an asset for the lender and a liability for the borrower — both sides count toward the AED 40M aggregate threshold. A business with AED 20M in intercompany service charges and a AED 25M loan to a related entity has already crossed the threshold on balance sheet alone, even before a single P&L transaction is counted.
What the Disclosure Form Actually Requires
The TP Disclosure Form — filed as part of the CT return via the EmaraTax portal — requires the following for each disclosed transaction:
- Name of the related party
- Transaction type and category (goods, services, IP, interest, assets, liabilities)
- Tax residence of the related party
- Corporate Tax Number of the related party
- Gross income or expense amount (as recorded in financial statements)
- TP method applied
- Arm’s length value determined
- Any TP adjustment made
If the transaction is priced at arm’s length, the gross amount and arm’s length value will be the same. If they differ — a TP adjustment is needed.
Upward adjustments (increasing taxable income) are reported directly in the Disclosure Form. No prior approval required.
Downward adjustments (decreasing taxable income) are different. These require a separate application to the FTA for prior approval before the return is filed. Filing a downward adjustment without approval is treated as a compliance error — and the FTA will not simply accept the reduction.
The Disclosure Decision: A Quick Self-Assessment
Use this table to determine your filing obligations before preparing your CT return.
|
Question |
If Yes → |
| Are aggregate related party transactions (including loans and intercompany balances) > AED 40M? | File RP Transaction Schedule |
| Does any individual transaction category exceed AED 4M? | Disclose that category separately |
| Are any payments or benefits to a connected person > AED 500K? | File Connected Persons Schedule |
| Have you adjusted any TP transaction downward (reducing taxable income)? | Apply for FTA prior approval before filing |
| Is any adjustment reflected in financials but not yet verified at arm’s length? | Review before filing — FTA will compare financials to disclosure |
If you answer yes to any row, that obligation exists for your September 2025 CT return.
The TP Policy Requirement
One obligation that sits behind the Disclosure Form — and is often overlooked entirely.
Any UAE business conducting related party or connected person transactions must maintain a contemporaneous TP policy that covers its UAE operations. This policy must be reviewed and updated at least every three years.
The policy does not need to be filed with the FTA. But it must exist, be current, and be available for review on request. A business that completes its Disclosure Form correctly but cannot produce an underlying TP policy is still non-compliant — and exposed in an FTA review.
How NR Doshi & Partners Can Help
NR Doshi & Partners has guided UAE businesses through tax and regulatory compliance for over 40 years. Our team reviews your intercompany transaction structure, calculates your disclosure obligations across all categories — including balance sheet items — and prepares the Disclosure Form accurately, with the right TP adjustments applied and any downward adjustment approvals obtained before filing.
We work with CFOs and Finance Directors who want to get the first CT return right — not discover errors after the FTA raises a query.
Contact us: enquiries@nrdoshi.ae | +971 4 352 8001
Key Takeaways
- The AED 40M threshold includes balance sheet items — intercompany loans and liabilities count, not just P&L transactions
- Both a RP Transaction Schedule and a Connected Persons Schedule may apply — check both thresholds independently
- Downward TP adjustments require prior FTA approval — do not file them without it
- A contemporaneous TP policy must exist behind every Disclosure Form, reviewed at least every three years
Frequently Asked Questions
Do intercompany loans count toward the AED 40 million related party disclosure threshold?
Yes. The AED 40 million threshold is calculated on the aggregate value of all transactions with related parties — including balance sheet items. An intercompany loan is recorded as an asset by the lender and a liability by the borrower. Both sides count toward the threshold. This means a business with AED 20 million in intercompany services and AED 25 million in intercompany loans has already crossed AED 40 million on combined P&L and balance sheet transactions — and must file the RP Transaction Schedule. This is one of the most commonly missed aspects of the disclosure rules.
What is the difference between the RP Transaction Schedule and the Connected Persons Schedule?
The RP Transaction Schedule covers transactions with related parties — entities connected through ownership or control, such as parent companies, subsidiaries, and affiliates. It is triggered when aggregate related party transactions exceed AED 40 million, with individual categories above AED 4 million disclosed separately. The Connected Persons Schedule covers payments to individuals with a close relationship to the business — directors, major shareholders, and their relatives. It is triggered when aggregate payments or benefits to a single connected person (including their related parties) exceed AED 500,000. Both schedules are filed via EmaraTax as part of the CT return.
What happens if I make a TP adjustment that reduces my taxable income?
A downward TP adjustment — one that reduces your taxable income — requires prior approval from the FTA before it is reflected in your CT return. This is different from an upward adjustment, which can be reported directly in the Disclosure Form without prior approval. Filing a downward adjustment without FTA approval is treated as a compliance error. The FTA will not simply accept the reduction. Businesses that identify a downward adjustment need to initiate the approval process well before their filing deadline — for December 2024 year-ends, that means before 30 September 2025.
Does a UAE Tax Group still need to file a related party Disclosure Form?
This remains an area of some ambiguity. The FTA’s November 2024 CT Return Guide and existing Ministerial Decision guidance do not provide explicit clarity on whether intra-Tax Group transactions must be disclosed in the RP Transaction Schedule. Given this ambiguity, businesses within a Tax Group should seek specific advice on their disclosure obligations for intra-group transactions rather than assuming they are excluded. Transactions between Tax Group members and parties outside the group are clearly disclosable under the standard thresholds.
What transactions must be categorized in the RP Transaction Schedule?
The FTA requires each disclosed related party transaction to be assigned to one of seven categories: Goods, Services, Intellectual Property, Interest, Assets, Liabilities, or Other. Mis categorization — for example, treating an IP licence as a service — is a compliance error that the FTA can challenge in a review. Care is also needed where a single transaction contains embedded elements from multiple categories; for instance, a goods sale that includes bundled IP may need to be split between the Goods and Intellectual Property categories to be correctly disclosed.
Further Reading in This Series
NR Doshi & Partners — UAE audit, tax, and advisory firm. 40+ years of experience. DFK International member. enquiries@nrdoshi.ae | +971 4 352 8001
