By Bill Anderson, FCCA, Chief Executive Officer — Assetica, Dubai, UAE
Definition: Tax valuation in the UAE is the preparation of an independently certified assessment of a business, asset, or interest specifically for tax compliance purposes. Since the introduction of UAE corporate tax at 9% in June 2023, formal tax valuations are required for transfer pricing between related parties, business reorganisations, employee share option schemes, and recognition of goodwill and intangible assets.
We assess tax impacts and develop optimised strategies to enhance your company's financial health. Our tax valuations are fully compliant with UAE, UK, and international tax regulations.
Since the UAE introduced 9% corporate tax in June 2023, the value you put on a business, a share transfer or an intangible asset now carries tax consequences. Related-party transactions, group restructurings, and the recognition of goodwill and intangibles all require values the Federal Tax Authority can test. A number assigned without support, or chosen to suit the tax outcome, is exactly what creates exposure if a filing is reviewed.
Transfer pricing rules require dealings between connected parties to be priced at arm's length, the price unrelated parties would agree. Moving shares or assets within a group at book value or a convenient figure is not enough. We prepare valuations and supporting documentation aligned with the OECD Transfer Pricing Guidelines and FTA requirements, evidencing the market value of intra-group transfers so the position holds if questioned, and protecting the business from adjustments and penalties.
When a business moves into a new holding structure, claims group relief, or reorganises ahead of investment, transfers must be recorded at market value. We provide the independent valuations that underpin these steps, documented and dated to the transaction rather than reconstructed afterwards. That discipline is what turns a restructuring into a defensible position rather than a future liability sitting on the balance sheet.
As an independent firm, Assetica is not your auditor or tax filer, so our reports carry no conflict of interest when the FTA reads them. Each valuation is prepared to RICS, IVS and IFRS standards, states its valuation date and methodology clearly, and normalises earnings so the conclusion can be defended. With more than 500 valuations completed across 15+ countries, we prepare tax valuations built to be tested and to stand.
A tax valuation is only useful if it survives examination, and that depends as much on the documentation as on the number itself. We set out the purpose, the valuation date, the methodology, the comparables and the adjustments in a report a reviewer can follow without ambiguity. If the FTA or a tax adviser later questions the position, the file answers the questions on its own. That completeness is what separates a valuation that protects you from one that simply records a figure and leaves you exposed.
Tax Position Review: Understanding of your current tax position and valuation requirements.
Regulatory Analysis: Assessment of applicable UAE, UK, and international tax regulations.
Valuation & Documentation: Defensible valuation with comprehensive documentation for tax authorities.
Report & Advisory: Tax valuation report with strategic recommendations for tax optimisation.
What is a tax valuation and why is it needed in the UAE?
A tax valuation is an independently prepared assessment of the value of a business, asset, or interest for a specific tax purpose. In the UAE, following the introduction of corporate tax in 2023, tax valuations are increasingly required for transfer pricing compliance, business reorganisations, employee share schemes, and transactions between related parties. Assetica prepares tax valuations that meet the requirements of the UAE Federal Tax Authority (FTA).
Is a tax valuation different from a standard business valuation?
Yes. While the underlying valuation methodology may be similar, tax valuations must meet specific regulatory standards set by the relevant tax authority. They require more extensive documentation, specific methodologies prescribed by tax regulations, and must be defensible against challenge from tax authorities. Assetica's tax valuations are prepared with this regulatory scrutiny in mind.
Does Assetica prepare transfer pricing valuations for UAE businesses?
Yes. Transfer pricing is one of the most significant tax compliance requirements for UAE businesses with related-party transactions, particularly following the introduction of UAE corporate tax. Assetica prepares transfer pricing valuations and documentation that comply with the OECD Transfer Pricing Guidelines and UAE FTA requirements, protecting businesses from transfer pricing adjustments and penalties.
What valuations are needed for UAE employee share schemes?
Employee share option plans (ESOPs) and other equity incentive arrangements require independent valuations of the company's shares at the time of grant for tax compliance purposes. Assetica provides ESOP valuations that are fully documented and defensible with the UAE FTA and other relevant tax authorities, using recognised methodologies such as the Black-Scholes model and DCF analysis.
How does UAE corporate tax affect business valuation requirements?
The introduction of UAE corporate tax at 9% from June 2023 has created new valuation obligations for businesses, particularly around related-party transactions, group restructurings, and the recognition of goodwill and intangible assets. Businesses that were previously not required to obtain formal valuations may now need them for tax compliance. Assetica helps businesses understand and fulfil these new valuation obligations.
Does Assetica prepare tax valuations for businesses operating across the UAE, Saudi Arabia, and the UK?
Yes. Assetica provides tax valuations for businesses with multi-jurisdictional operations across the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, Oman, the UK, and broader Europe. Each jurisdiction has its own tax valuation requirements and regulatory standards. Our team ensures that valuations prepared for cross-border transactions, group restructurings, or transfer pricing purposes comply with the applicable regulations in each territory, including OECD guidelines, UAE FTA requirements, HMRC standards for UK tax purposes, and ZATCA requirements in Saudi Arabia.