--- title: Transfer Pricing Valuation UAE: Related Parties | Assetica description: Under UAE corporate tax, transactions between related parties and connected persons must be priced at arm's length, meaning the value independent parties… url: https://assetica.net/blog/transfer-pricing-valuation-uae/ source: Assetica, independent business valuation firm, Dubai and the UK --- # Transfer Pricing Valuation in the UAE: Pricing Related-Party Transfers the FTA Will Accept By **Bill Anderson**, FCCA, Chief Executive Officer, Assetica — 2026-08-22 ![Transfer Pricing Valuation in the UAE: Pricing Related-Party Transfers the FTA Will Accept — Assetica, independent business valuation, Dubai](https://images.unsplash.com/photo-1523477593243-78bbf626fd3b?auto=format&fit=crop&w=1100&q=65) Direct Answer: Under UAE corporate tax, transactions between related parties and connected persons must be priced at arm's length, meaning the value independent parties would have agreed. Moving shares, property, intellectual property or a whole business between group entities at book value, or at a convenient number, is exactly what the Federal Tax Authority is set up to challenge. An independent valuation with a stated date and methodology is what turns a related-party transfer from an exposure into a documented, defensible position. Under UAE corporate tax, transactions between related parties and connected persons must be priced at arm's length, meaning the value independent parties would have agreed. Moving shares, property, intellectual property or a whole business between group entities at book value, or at a convenient number, is exactly what the Federal Tax Authority is set up to challenge. An independent valuation with a stated date and methodology is what turns a related-party transfer from an exposure into a documented, defensible position. ## What arm's length actually requires The arm's length principle asks one question: what would this transaction have looked like between independent parties? Not what the group would prefer, not what the accounts happen to carry, and not what leaves the least tax. For routine trading between group companies, transfer pricing methods such as comparable uncontrolled prices or margin benchmarks answer it. For one-off transfers, of shares, real estate, intellectual property, equipment or an entire business line, the answer is a market valuation of the asset itself, because there is no flow of transactions to benchmark. That is where transfer pricing and business valuation meet, and where most UAE groups discover they need a number they can defend rather than a number they recorded. ## The transfers that need a valuation The common triggers are group restructurings: moving a business from a mainland entity into a free zone company, consolidating under a new holding company, hiving assets into a special purpose vehicle, transferring intellectual property to the entity that develops or licenses it, and settling balances between companies under common ownership. Each is a related-party transaction, and each needs a market value at the transfer date. The same applies to transactions with connected persons, including dealings between a company and its owners, so a shareholder buying an asset from their own company, or contributing one to it, is inside the regime, not outside it. ## Reliefs exist, and they have conditions UAE corporate tax provides reliefs that can allow certain intra-group transfers and qualifying business restructurings to proceed without triggering immediate gains, where the ownership and continuity conditions are met. Two things matter in practice. First, the reliefs have clawback provisions: sell the transferred asset or break the group relationship too soon and the deferred gain can come back. Second, relief from tax is not relief from evidence. The transfer still needs to be documented at a supportable value, because the day the relief conditions fail, the valuation at the original transfer date is what the calculation reaches for. A contemporaneous independent valuation is cheap insurance against reconstructing one years later. ## What the FTA looks for in the file Transfer pricing documentation in the UAE follows the international pattern: disclosure of related-party transactions with the return, and supporting documentation proportionate to the size of the group. Whatever the tier, the substance the FTA looks for is the same: a stated valuation date, a recognised methodology, the assumptions in the open, and a conclusion an independent reviewer could re-perform. A one-line file note that the directors consider the price to be fair is not documentation. A valuation report prepared to IVS standards, reconciling more than one approach, is. ## Where it goes wrong The recurring failures are predictable. Transfers at net book value, which measures historical cost accounting, not market value. Valuations prepared after the event to justify a price already booked. Intellectual property moved for nominal value to the entity where profit is meant to sit, with no royalty analysis behind it. Loss-making entities sold between group companies at prices nobody independent would pay. And in liquidations, assets distributed to shareholders in kind with no value attached at all. Each of these is visible on the face of the accounts, which is precisely why related-party balances are the first place a reviewer looks. ## How Assetica works alongside GTAG on this The division of labour inside the group is clean. Assetica provides the independent valuation: the market value of the shares, business, property or intangible being transferred, prepared to IVS and RICS standards with a stated date and methodology, and independent of the audit and the tax filing. Gulf Tax Accounting Group (GTAG) handles the corporate tax side: the disclosures, the documentation file, the relief elections and the FTA correspondence. Because the valuer is not the filer, the number carries the independence the arm's length principle is asking for in the first place. Standard valuation reports are issued in five to seven business days. ## Frequently Asked Questions What is the arm's length principle under UAE corporate tax? It is the requirement that transactions between related parties and connected persons be priced as independent parties would have priced them. For recurring trading flows that is demonstrated with transfer pricing methods and benchmarks; for one-off transfers of shares, property, intellectual property or a business, it is demonstrated with a market valuation of the asset at the transfer date. Do I need a valuation to move assets between my own companies? Yes, in substance. A transfer between entities under common ownership is a related-party transaction, and recording it at net book value or a convenient figure creates exactly the exposure the regime targets. An independent valuation at the transfer date documents the arm's length position, and where an intra-group relief is claimed, it evidences the value the relief attaches to. Are transactions between a company and its shareholders caught? Dealings with connected persons, including a company's owners and their relatives, sit inside the regime. A shareholder buying an asset from the company, selling one to it, or receiving assets in kind on a liquidation should expect the price to be tested against market value, which is why an independent number protects both the company and the shareholder. What should transfer pricing documentation for a one-off transfer contain? A stated valuation date, a recognised methodology, the assumptions made, comparable evidence where it exists, and a conclusion an independent reviewer could re-perform. A valuation report prepared to IVS standards, reconciling at least two approaches, meets that description. A directors' file note asserting the price is fair does not. What happens if intra-group relief conditions are later broken? The reliefs carry clawback provisions: dispose of the transferred asset or break the qualifying relationship within the restricted period and the deferred gain can be brought back into charge, calculated by reference to values at the original transfer. A contemporaneous valuation from the transfer date is what makes that calculation defensible rather than a reconstruction. Who does the valuation and who does the filing? Within the group, Assetica prepares the independent valuation and Gulf Tax Accounting Group (GTAG) prepares the tax side: disclosures, documentation and FTA correspondence. Keeping the valuer separate from the filer preserves the independence the arm's length principle relies on. ## Speak to Assetica about Tax, IFRS & Specialist Valuation Assetica is an independent business valuation firm in Dubai. We do not audit and we do not broker deals, so the number carries no conflict. Read more about [tax, ifrs & specialist valuation](https://assetica.net/services/tax-valuation/), or [book a free scoping call](https://assetica.net/contact/). Standard reports are issued in five to seven business days. ## Related Guides - [Business Valuation for UAE Corporate Tax: What the FTA Expects](https://assetica.net/blog/business-valuation-corporate-tax-uae/) - [How UAE Corporate Tax Changes Your DCF: QFZP Status, WACC and Deferred Tax](https://assetica.net/blog/uae-corporate-tax-dcf-wacc-valuation-impact/) - [Holding Company Structures and How They Affect Your Valuation](https://assetica.net/blog/holding-company-structure-valuation-uae/) ## Independent business valuation across the UAE, UK and Europe ### Valuation services - [Business valuation Dubai](https://assetica.net/services/business-valuation/) - [Golden Visa business valuation](https://assetica.net/golden-visa-valuation/) - [UAE corporate tax valuation](https://assetica.net/corporate-tax-valuation/) - [M&A and transaction valuation](https://assetica.net/ma-transaction-valuation/) - [Financial due diligence](https://assetica.net/financial-due-diligence/) - [Succession planning valuation](https://assetica.net/succession-valuation-uae/) - [Family office valuation](https://assetica.net/family-office-valuation/) - [Feasibility study Dubai](https://assetica.net/feasibility-study-dubai/) - [All advisory services](https://assetica.net/services/) ### Where we work - [Abu Dhabi](https://assetica.net/abu-dhabi-business-valuation/) - [Sharjah](https://assetica.net/sharjah-business-valuation/) - [DIFC](https://assetica.net/difc-business-valuation/) - [ADGM](https://assetica.net/adgm-business-valuation/) - [United Kingdom](https://assetica.net/uk-business-valuation/) - [Europe](https://assetica.net/europe-business-valuation/) - [South Africa](https://assetica.net/south-africa-business-valuation/) - [Australia](https://assetica.net/australia-business-valuation/) ### Resources - [How much is my business worth?](https://assetica.net/how-much-is-my-business-worth-dubai/) - [Free business valuation calculator](https://assetica.net/business-valuation-calculator/) - [Startup and technology valuation](https://assetica.net/startup-technology-valuation/) - [UAE valuation facts and figures](https://assetica.net/uae-business-valuation-facts/) - [Valuation insights and guides](https://assetica.net/blog/) - [Latest insights](https://assetica.net/insights/) - [Industries we value](https://assetica.net/industries/) - [For lawyers and accountants](https://assetica.net/for-advisors/) ### About Assetica - [Business valuation Dubai and UAE](https://assetica.net//) - [About Assetica](https://assetica.net/about/) - [Bill Anderson, FCCA, CEO](https://assetica.net/team/bill-anderson/) - [Contact us](https://assetica.net/contact/) ### Browse by topic - [Business valuation articles](https://assetica.net/blog/category/business-valuation/) - [Selling a business](https://assetica.net/blog/category/business-sale/) - [Strategic value advisory](https://assetica.net/blog/category/strategic-advisory/) - [Financial reporting valuation](https://assetica.net/blog/category/financial-valuation/) - [Valuation risk management](https://assetica.net/blog/category/risk-management/) - [Pitch decks and fundraising](https://assetica.net/blog/category/pitch-deck/) Assetica, Office 304, Icon Tower, Barsha Heights (Tecom), Dubai, UAE. Telephone and WhatsApp [+971 52 979 8302](tel:+971529798302). Email [info@assetica.net](mailto:info@assetica.net).