Salary Benchmarking for Transfer Pricing: Why It Matters in the UAE Corporate Tax Era
As the UAE aligns with global tax standards, Transfer Pricing (TP) has become a key focus under the Corporate Tax regime — especially in the context of compensating Key Management Personnel (KMP) . When these individuals are also shareholders, directors, or Connected Persons , their remuneration comes under sharper scrutiny. With the Federal Tax Authority (FTA) and regulators closely assessing these payments, it’s vital for businesses to ensure compensation is justifiable, well-documented, and aligns with the Arm’s Length Principle (ALP) . What Is Transfer Pricing? Transfer Pricing governs transactions between Related Parties — including those involving KMP remuneration . Under Article 34 of the UAE’s Corporate Tax Law, these transactions must be priced as if between independent parties, ensuring no manipulation of taxable income. Why Focus on KMP Remuneration? KMPs such as CEOs, CFOs, and board members significantly influence both strategy and execution. When they are also sha...