UAE Transfer Pricing Documentation Master File and Local File Requirements Explained (2025)

UAE businesses with standalone revenue of AED 200 million or more — or those that are part of an MNE group with global consolidated revenue of AED 3.15 billion or more — must prepare and maintain a Master File and Local File under Ministerial Decision No. 97 of 2023. These documents do not need to be filed with the FTA annually, but must be produced within 30 days of an FTA request and retained for seven years.

 

The Local File is entity-specific and transactional; the Master File gives the FTA a group-wide picture. UAE-only groups — where all entities are UAE-resident — are not required to prepare a Master File. The first corporate tax return deadline for December 2024 year-ends is 30 September 2025. 

 

For many UAE businesses, the phrase “transfer pricing documentation” calls to mind a vague obligation — something to address eventually. That instinct becomes costly when the Federal Tax Authority (FTA) issues a formal request and gives you 30 days to produce documents that, in practice, take months to prepare properly. 

 

The Master File and Local File are not optional for businesses above the thresholds. They are the evidentiary foundation of your transfer pricing position — the documents through which the FTA assesses whether your controlled transactions are at arm’s length and your taxable income is correctly stated. 

 

This guide explains exactly what each document must contain, who is required to prepare them, and what the FTA expects when it comes knocking. 

 

Why Transfer Pricing Documentation Became Mandatory in the UAE 

UAE transfer pricing documentation obligations became enforceable from the first financial year beginning on or after 1 June 2023 — making financial year 2024 (January to December) the first full tax period for most businesses, with returns due by 30 September 2025. 

 

The legal basis is Article 55(2) of Federal Decree-Law No. 47 of 2022 (the Corporate Tax Law), which requires qualifying taxable persons to maintain a Local File and Master File as prescribed by the FTA. Ministerial Decision No. 97 of 2023 (source: mof.gov.ae) then set out the specific conditions, thresholds, and content requirements in detail. 

 

The framework follows the OECD’s three-tier documentation approach under BEPS Action 13: Master File, Local File, and Country-by-Country Report. The UAE’s adoption of this framework signals that it intends to administer transfer pricing with the same rigour applied in OECD member jurisdictions — and that the FTA’s audit programme will be informed by the disclosure data submitted in the first round of CT returns. 

 

One important 2025 update: Ministerial Decision No. 301 of 2025 has updated certain provisions that previously appeared in MD 125 of 2023 in relation to Article 55(1) of the CT Law. Businesses and advisers still citing the earlier instrument should ensure they are referencing the current version. 

 

Who Needs to Prepare a Master File and Local File? 

Under Ministerial Decision No. 97 of 2023, a UAE taxable person must maintain both a Master File and a Local File if they meet either of the following conditions during the relevant tax period: 

 

 

There is an important distinction between the two tracks. A UAE entity that meets only the AED 200M standalone threshold must prepare a Local File — but if all entities in its ownership structure are UAE-resident, it is not required to prepare a Master File. The Master File obligation is triggered only where the entity is part of an MNE group operating across multiple jurisdictions. 

 

This means a large UAE-only conglomerate — where the parent, subsidiaries, and affiliates are all UAE-resident — has a Local File obligation but no Master File obligation, provided its consolidated group revenue does not meet the AED 3.15B threshold. 

 

Businesses that fall below both thresholds are not required to maintain formal documentation — but they must still apply the arm’s length principle to all controlled transactions and be able to substantiate that pricing on FTA request. The absence of a formal documentation obligation does not mean the absence of a compliance obligation. 

The Local File: What It Is and What Must Be in It 

The Local File is the entity-specific document. It provides the FTA with a detailed picture of the UAE taxable person’s controlled transactions — what they are, how they were priced, and why that pricing meets the arm’s length standard. 

What the Local File Must Cover 

The Local File is structured around the specific transactions the entity enters into with related parties. For each transaction type, it must address: 

 

Entity overview. A description of the UAE business — its history, ownership structure, industry, competitive environment, and financial performance. This contextualizes the transactions. 

 

Functional analysis. A detailed analysis of the functions performed, assets used, and risks borne by the UAE entity in relation to each controlled transaction. This is the intellectual core of the document — it determines which TP method is appropriate and what arm’s length outcome is defensible. 

 

Controlled transactions. A description of each material transaction or arrangement with related parties, including the nature of the transaction, the amounts involved, and the related party involved. 

 

TP method applied. The transfer pricing method selected for each transaction, the reasons for its selection over alternatives, and the application of the method to reach an arm’s length outcome. 

 

Benchmarking analysis. The comparable data used to establish or confirm the arm’s length range — including the source (Orbis, TP Catalyst, Royal stat, or other approved databases), the search strategy, the comparable selected, and the interquartile range. 

 

Financial information. The entity’s financial statements and, where relevant, schedules showing how TP adjustments have been applied. 

Transactions Excluded from the Local File 

An important and widely overlooked provision: transactions between two UAE resident persons subject to the same corporate tax rate are excluded from the Local File — even if those persons are related parties and even if they are not members of the same Tax Group. This exclusion exists because the UAE CT Law treats such transactions as presenting no profit-shifting risk within the UAE tax base. 

 

This has a material practical implication: two UAE mainland companies within the same group, both subject to the standard 9% CT rate, do not need to include their intercompany transactions in the Local File, provided neither is exempt, claiming Small Business Relief, or subject to a different CT rate. The arm’s length principle still applies — but the documentation requirement for those specific transactions is lifted. 

 

Transactions excluded from the Local File also include arrangements with UAE Government entities and Government-controlled entities.  

The Master File: What It Is and What Must Be in It 

The Master File provides a high-level, group-wide picture. Its purpose is to give the FTA a clear understanding of where value is created within the MNE group and how that aligns with where profits are reported and taxed. 

What the Master File Must Cover 

Organizational structure. A chart showing the legal and ownership structure of the MNE group, including the jurisdictions in which group entities operate. 

 

Business description. The group’s key value drivers, its supply chain, its main geographic markets, and an analysis of its five largest revenue-generating products or services. 

 

Intangibles. A description of the group’s overall strategy for developing, owning, and exploiting intangible assets. This includes the location of R&D facilities, major intangibles held, key intercompany agreements relating to IP, and transfer pricing policies for intangibles. 

 

Intercompany financial activities. How the group is financed, including the identity of the main financing entities, intercompany financing arrangements, and group transfer pricing policies for financing. 

 

Financial and tax position. The group’s consolidated financial statements for the most recent fiscal year, plus a list of existing APAs and advance rulings relating to the allocation of group income. 

 

The Master File is prepared at the group level — typically by the Ultimate Parent Entity or its advisers — and the UAE entity is entitled to submit the group’s existing Master File (prepared for another jurisdiction) provided it meets the FTA’s content requirements. 

Side-by-Side Comparison: Master File vs Local File 

 

 

What “Contemporaneous” Actually Means — and Why It Matters 

Both the Master File and Local File must be contemporaneous. The FTA’s Transfer Pricing Guide (CTGTP1, October 2023) is clear on this: documentation must be prepared at the time the transfer prices are set, not after the FTA raises a query. 

 

In practice, this means the documentation obligation does not begin when the FTA sends a request. It begins when the transactions are entered into. By the time the FTA issues a 30-day notice, the documents should already exist. A 30-day production window is not a 30-day preparation window. 

 

Based on NR Doshi’s experience working with UAE businesses through the first CT compliance cycle, the most common documentation failure is not a refusal to comply — it is simply that businesses have been pricing their intercompany transactions reasonably without recording the analysis contemporaneously. When the FTA requests the Local File, there is nothing to produce. Reconstructing documentation retrospectively is not only operationally burdensome — it also undermines the credibility of the arm’s length position. 

2025 Update: What Has Changed 

The first CT return deadline. For businesses with a December 2024 year-end, the corporate tax return — including the TP Disclosure Form — is due by 30 September 2025. This is the first time the FTA will receive structured TP disclosure data at scale. It is expected to inform the FTA’s risk-profiling and audit selection for subsequent periods. 

 

The APA programme. In December 2025, the FTA formally launched its Advance Pricing Agreement (APA) programme. Unilateral APAs are available first, with bilateral and multilateral APAs to follow. Businesses with high-value recurring controlled transactions — particularly those subject to Local File obligations — can now apply for binding upfront certainty on their arm’s length pricing. The minimum transaction value for APA coverage is AED 100 million per tax period. 

 

MD 301 of 2025. This Ministerial Decision updated certain provisions relating to Article 55(1) of the CT Law. Advisers and businesses should ensure their TP frameworks reference the current version of the regulations. 

How NR Doshi & Partners Can Help 

NR Doshi & Partners has been advising UAE businesses on tax, audit, and regulatory compliance for over 40 years. Our transfer pricing practice prepares Master Files and Local Files to FTA standards — combining technical OECD-compliant analysis with practical insight from working alongside the UAE’s regulatory environment since before corporate tax existed. 

 

We work with CFOs and Finance Directors to assess documentation obligations, identify the resident-to-resident exclusions that can reduce your compliance burden, and build a contemporaneous documentation process that is ready for the FTA’s 30-day clock — not scrambled after it starts.  

Key Takeaways 

• Any UAE entity with standalone revenue of AED 200M or more must maintain a Local File. Master File is only required where the entity is part of an MNE group with consolidated revenues of AED 3.15B or more. 

• UAE-only groups (all entities UAE-resident, same CT rate) have reduced Local File obligations — resident-to-resident transactions at the same CT rate are excluded. 

• Both files must be contemporaneous — prepared when transactions occur, not when the FTA requests them. The 30-day window is for production, not preparation. 

• The September 2025 CT return deadline is the first opportunity for the FTA to identify documentation gaps and flag businesses for follow-up. 

 

Ready to review your transfer pricing documentation position? Contact NR Doshi & Partners for a confidential assessment: enquiries@nrdoshi.ae | +971 4 352 8001 

Frequently Asked Questions 

What is the difference between a Master File and a Local File in UAE transfer pricing? 

 

The Local File is an entity-specific document covering one UAE taxable person’s controlled transactions in detail — the functions, risks, assets, TP methods, and benchmarking used to support the arm’s length price. The Master File is a group-level document giving the FTA a high-level picture of the MNE group’s global operations, value chain, IP strategy, and financing structure. A UAE entity above the AED 200M standalone threshold needs a Local File regardless of whether it is part of an MNE group. The Master File is only required where the entity belongs to an MNE group with consolidated revenues of AED 3.15 billion or more. 

 

Does a UAE-only group need to prepare a Master File? 

 

No. If all entities in the group are UAE-resident — meaning there are no overseas parent companies, subsidiaries, or affiliates — the group is not required to prepare a Master File, even if one entity’s standalone revenue exceeds AED 200M. The UAE-only group must still prepare a Local File for the entity that meets the revenue threshold. The Master File obligation is triggered exclusively by MNE group status under Ministerial Decision No. 97 of 2023. 

 

When does the FTA need to receive the Master File and Local File? 

 

The FTA does not require the Master File or Local File to be submitted as part of the annual corporate tax return. Instead, both documents must be made available to the FTA within 30 days of a formal request under Article 55(2) of the Corporate Tax Law. However, both documents must be prepared contemporaneously — meaning they must exist at the time the relevant transactions take place, not just when the FTA asks. The seven-year retention obligation means documents prepared in 2024 must be held until at least 2031. 

 

Are transactions between two UAE mainland companies in the same group included in the Local File? 

 

Not necessarily. Ministerial Decision No. 97 of 2023 explicitly excludes from the Local File any transactions between two UAE resident persons that are subject to the same corporate tax rate — even if they are related parties and even if they are not in the same Tax Group. This is a meaningful reduction in the documentation burden for UAE-only groups. The exclusion does not apply where one party is exempt, claiming Small Business Relief, subject to a different CT rate (such as a Qualifying Free Zone Person earning qualifying income at 0%), or a Government entity. 

 

What happens if a business cannot produce its Local File within 30 days? 

 

Failure to produce transfer pricing documentation within the FTA’s 30-day window is a violation of the Corporate Tax Law and triggers penalties under Cabinet Decision No. 75 of 2023. Record-keeping failures carry a penalty of AED 10,000 per violation, rising to AED 20,000 for repeat violations. Beyond the financial penalty, the inability to produce documentation undermines the taxpayer’s arm’s length position — the FTA may proceed to adjust taxable income on the basis that unsubstantiated pricing is not at arm’s length, with corresponding tax and further penalties applied to the adjusted amount. 

 

Can a UAE entity use its group’s existing Master File prepared for another jurisdiction? 

 

Yes, provided the group Master File meets the content requirements set out in Ministerial Decision No. 97 of 2023 and the FTA’s Transfer Pricing Guide (CTGTP1). Many MNE groups prepare a single Master File to OECD BEPS Action 13 standards, which broadly aligns with UAE requirements. The UAE entity should review the group document to confirm it covers the mandatory content elements and does not require supplementation for UAE-specific purposes. The FTA accepts documentation in English; Arabic translation may be requested separately. 

 

Further Reading in This Series 

• Transfer Pricing in the UAE: A Complete Guide for 2025 

• The Arm’s Length Principle in UAE Transfer Pricing 

• Related Party Transactions in UAE Corporate Tax: A Compliance Checklist 

 

 

NR Doshi & Partners is a UAE audit, tax, and advisory firm with over 40 years of experience. DFK International member — 7th largest global accounting association.

 

Contact: enquiries@nrdoshi.ae | +971 4 352 8001