Transfer-pricing readiness starts with identifying related parties and connected persons, not with testing whether a master or local file threshold is met. Arm's-length rules can apply to relevant dealings irrespective of those documentation thresholds. Groups should map transactions, explain functions and risks, align agreements with conduct and retain support for pricing. Master and local files generally relate to consolidated group revenue of AED 3.15 billion or more, or UAE taxable-person revenue of AED 200 million or more, subject to current rules and precise conditions.
Map relationships and transactions
Create a complete legal and practical relationship map, then reconcile material dealings to ledgers and contracts. Informal charges and owner transactions should not be overlooked.
Combine the legal ownership chart with a transaction register by counterparty, category, currency and value. Reconcile it to general-ledger accounts and declarations from directors so management fees, intercompany balances and non-cash benefits are not omitted.
Apply the arm's-length principle
Analyse what each party actually does, which assets it uses and which risks it controls. Select a method that fits the transaction and available evidence.
Interview the people who negotiate, deliver and supervise the transaction, then compare their account with contracts and financial records. The pricing method should follow the economically significant functions and available comparables, with limitations stated rather than hidden.
| Documentation layer | Purpose |
|---|---|
| Relationship map | Identify related parties, connected persons and ownership links |
| Transaction schedule | Quantify dealings by type, counterparty and agreement |
| Arm's-length analysis | Explain functions, assets, risks, method and support |
| Formal files | Prepare disclosure, master or local file where applicable |
Separate rules from file thresholds
Arm's-length requirements may apply even where formal master or local files are not required. Threshold testing should therefore follow, not replace, transaction analysis.
Document the arm's-length support for all material in-scope dealings first, then perform the current formal-file threshold tests separately. Keep the calculation inputs and group-revenue evidence so management can explain why a disclosure or file was or was not prepared.
Practical readiness checklist
- Map legal and practical related-party relationships
- Reconcile transaction values to the ledger
- Document functions, assets, risks and pricing method
- Test current disclosure and file thresholds
- Align agreements, invoices and actual conduct
Prepare consistent documentation
Disclosure forms, agreements, policies, invoices and local-file narratives should tell the same commercial story. Differences between contract and conduct require attention.
Cross-reference each transaction category across agreements, invoices, ledger values and the functional analysis. Investigate mismatches before year-end and document whether the contract, pricing, invoicing or actual operating conduct needs correction.
Address connected-person payments
Payments or benefits involving owners, directors or other connected persons may need specific support for market value and business purpose.
Maintain a register of salary, fees, benefits, loans and asset transfers involving connected persons, with approval and commercial evidence. Review unusual or non-cash items before period close so their purpose and market basis are documented while information is available.
Run an annual review cycle
Update the transaction map, threshold test, benchmarks and agreements when facts change. Retain evidence in a form that can be explained after year-end.
Schedule the review before final pricing adjustments and filing work begins, with triggers for restructurings, new services, financing or material volume shifts. Version-control the analysis and preserve the data used so later reviewers can distinguish current conclusions from prior-year assumptions.
Putting the framework into practice
Use this transfer pricing briefing as a working agenda rather than a substitute for case-specific review. Bring together the business owner, finance or operations lead, relevant system and data owners, and any appropriately qualified specialist whose approval or interpretation is required. Record assumptions, open questions, evidence gaps and decisions in one controlled action log. Prioritise items that affect legality, continuity, cash, customers or irreversible commitments, then assign realistic owners and review dates. The Stravision CORE team may support planning, coordination and readiness within its advisory scope, while authority decisions, regulated work and professional opinions remain with the relevant bodies and qualified providers.