UAE Related Party Transactions: What to Report

Reporting related-party transactions in the UAE is a two-schedule exercise sitting on top of the Corporate Tax return: a Related Party transactions Schedule and a Connected Persons Schedule, each with its own threshold. Getting the reporting right depends less on complex tax analysis and more on disciplined data — knowing exactly which counterparties are related, and what was paid to or received from each of them during the Tax Period.

The legal starting points are Articles 34, 35, 36 and 55 of the Corporate Tax Law and the FTA Transfer Pricing Guide (CTGTP1). For how those relationships are identified, see who is covered and how to identify Related Parties. The step-by-step Disclosure Form guide covers how those figures are entered on EmaraTax.

What are businesses actually required to report?

Two separate schedules sit alongside the Corporate Tax return:

The Related Party transactions Schedule — discloses transactions with parties meeting the Article 35 definition, triggered where the aggregate value of all related-party transactions exceeds AED 40 million.
The Connected Persons Schedule — discloses payments or benefits to parties meeting the Article 36 definition, triggered where the aggregate value exceeds AED 500,000.

Both thresholds are assessed independently, so a business can be required to file one schedule without the other, or both.

How does the AED 40 million Related Party threshold work in practice?

Once the aggregate value of all related-party transactions — recorded in the financial statements, or at market value where not recorded — exceeds AED 40 million, the schedule is triggered. From there, each transaction category (goods, services, financing, IP and so on) is disclosed separately once that category alone exceeds AED 4 million.

The AED 40 million figure is assessed in aggregate across all Related Parties combined, not per counterparty.

How does the AED 500,000 Connected Persons threshold work?

The Connected Persons Schedule is triggered once the aggregate value of payments or benefits to connected persons — owners, directors, officers and their Related Parties — exceeds AED 500,000 for the Tax Period. It is disclosed per connected person together with that person's own Related Parties.

After FTA Public Clarification CTP010, director and officer status follows actual authority, not the job title on the payroll. Owner salaries, director fees and non-cash benefits such as housing can all count. See Connected Persons payments, benefits and transfer pricing risks.

Are dividends included in the reportable amounts?

No. Dividend payments between Related Parties are specifically excluded from both the AED 40 million and AED 4 million category thresholds on the Related Party Schedule. They should still be tracked internally for other Corporate Tax purposes.

Crossing a disclosure threshold is not the same as becoming subject to Article 34. The arm's length principle already applied, including to domestic related-party transactions.

What level of detail does the FTA expect for each disclosed transaction?

For each disclosed category, a business should be able to identify:

The counterparty.
The nature of the relationship (ownership, control or kinship).
The transaction type.
The amount recorded.
The pricing methodology used to support that the amount is arm's length.

This is why the disclosure form and the underlying transfer pricing documentation need to be built from the same transaction data, not compiled separately. A Local File, where required, should tell the same story as the schedules.

What records support the disclosure figures?

Intercompany agreements, invoices and payment records for each Related Party and Connected Person transaction.
A benchmarking study or comparability analysis supporting the pricing.
Where thresholds are met, the Master File and Local File.

These should be retained for seven years and be producible within 30 days of an FTA request.

What happens if a related-party transaction is not reported?

Failing to disclose a Related Party or Connected Person transaction that meets the threshold is treated as a filing deficiency and can trigger administrative penalties, separate from any tax adjustment the FTA makes if the transaction itself is later found not to be arm's length.

Businesses can amend a filed Corporate Tax return. A missed related-party disclosure discovered later is best corrected proactively rather than left for an FTA review to surface.

Related-party reporting at a glance

Question	Answer
Do I need to file both schedules?	Only if both thresholds are independently met
Is AED 40 million per Related Party or in aggregate?	In aggregate, across all Related Parties combined
When is a category itemised?	Once that category alone exceeds AED 4 million, after the AED 40 million aggregate is exceeded
Does intercompany financing count?	Yes. Loans, guarantees and related interest are included at financial-statement or market value
Are dividends in the AED 40 million / AED 4 million tests?	No. Dividends between Related Parties are excluded from those disclosure thresholds

Who inside the business should compile the disclosure figures?

Typically tax, working from finance's general ledger data on intercompany and Connected Person transactions. The two teams need a shared transaction list so the disclosure form and the transfer pricing documentation are consistent with each other.

How should a UAE finance team start with the facts?

A strong transfer pricing position starts with the transaction itself. Identify what was actually supplied, who performed the work, where the people and assets were located, which entity carried the commercial risk, and what the accounting records show. The tax result should come after that fact pattern is clear.

Then build a transaction inventory: each Related Party and Connected Person, the contractual terms, the annual value and the pricing method currently used. Compare that list with the general ledger, intercompany confirmations, contracts and tax-return disclosures. Differences between those records are often more important than a small difference in the final margin.

Frequently asked questions

Do I need to file both the Related Party and Connected Persons schedules?

Only if both thresholds are independently met. A business can exceed the AED 40 million related-party threshold without exceeding the AED 500,000 connected-person threshold, or vice versa.

Is the AED 40 million threshold assessed per related party or in aggregate?

In aggregate, across all Related Parties combined. Once that aggregate figure is exceeded, each transaction category is broken out separately once it passes AED 4 million.

Does intercompany financing count toward the AED 40 million threshold?

Yes. Loans, guarantees and related interest between Related Parties are included in the aggregate related-party transaction value, recorded at their financial-statement or market value.

Can the disclosure form be corrected after filing if a transaction was missed?

Yes. Businesses can amend a filed Corporate Tax return. A missed related-party disclosure discovered later is best corrected proactively rather than left for an FTA review to surface.

If a transaction is below the disclosure threshold, is it exempt from the arm's length rule?

No. The AED 40 million and AED 500,000 figures are disclosure-form thresholds, not exemptions. Article 34's arm's length requirement applies regardless of transaction size.

Primary sources and further reading

How SBC Tax Consulting can help

SBC's transfer pricing team maps Related Parties and Connected Persons against the ledger, tests the AED 40 million and AED 500,000 thresholds independently, and aligns disclosure figures with the underlying documentation. Corporate tax specialists then complete the same schedules in the return. Contact SBC before the next filing.

This publication is for general information only and does not constitute professional advice. Please consult your SBC advisor before acting on any matter covered here.