Page 21 - Focus Group

after 1st January 2019, defines Multinational A Group’s transfer pricing is closely related to the
Enterprises Group (MNE Group) which has business operations as a whole, understanding the
a total consolidated group revenue equal transfer pricing means understanding the entire
to AED 3.15 Billion or more during the business, the whole value chain, where and how the
financial year immediately preceding the group makes profit/generate income and where the
reporting financial year and also has two important activities of the Group are performed. If
or more entities which are tax residents for the people involved in transfer pricing policies have
a clear understanding about everything related
tax purpose in two different jurisdictions. to the business, they would be certainly able to
The regulation requires the constituent entities of articulate how their transfer pricing policies are in
such MNE Group with taxable presence in UAE to compliance with the rules in the event information
file a CbC notification and if it is an ultimate parent is required for assessment by the tax authorities.
company of such MNE Group, it is also required to
file a CbC Report on behalf of the group with the Another notable action plan in relation to transfer
Ministry of Finance. pricing and CbC Report, is to examine the existing,
accounting system, internal data and information
The CbC notification is required to be filed before system which may be rationalized in order to
the end of the MNE Group’s produce the accurate data consistently and quickly.
financial year
whereas in
case of UAE
based
ultimate
parent
company
the CbC
Report
is also CA Avinash Jagetiya
required to
be submitted
within 12 months of
the end of the Group’s financial
year. It is worth stating that so far there is no
requirement to submit Master File and Local File to
the authorities in UAE.
Filing CbC notification may not be that challenging
for the constituent entities whose ultimate parent
company is filing CbC Report in their jurisdiction
outside UAE but preparing and filing CbC Report
about the global operations, is definitely going to
be very challenging for the UAE based ultimate
parent companies who are not subject to CbC
Report requirement in other jurisdictions and will
be filing the CbC Report for their MNE group with
the Ministry of Finance in UAE for the first time.
Companies should start preparing now what is
going to take them to comply the transfer pricing
policies from the global operations perspective.
They need to assess what are going to be the new
risk areas in terms of transfer pricing.

Disclaimer:
This article and/or write ups and/or any of its content shall not be treated as opinion and/or advice in any circumstances of the author(s) and/ or the Chapter. Reader’s to apply their best
judgement in the best interest of their requirement and should seek a formal opinion on any issue.

The Institute of Chartered Accountants of India (Dubai) Chapter NPIO TAX JOURNAL 2020 21