A UAE taxable person is not part of any Multinational Enterprise Group but has standalone revenue of AED 210 million for a tax period. Under UAE Corporate Tax Law's transfer pricing documentation requirements (Ministerial Decision No. 97 of 2023), must this taxable person maintain a Master File and Local File for that tax period?
- Yes, because the AED 200 million standalone revenue threshold is met on its own, independently of any Multinational Enterprise Group membership or the separate AED 3.15 billion consolidated-revenue test
- No, because the Master File and Local File requirement only applies to constituent entities of Multinational Enterprise Groups with consolidated group revenue of at least AED 3.15 billion
- No, because AED 210 million in revenue only triggers the disclosure form requirement, not the Master File and Local File obligation
- Yes, but only if the taxable person's related-party transactions, separately from total revenue, also exceed AED 200 million
Why A? And why not the others?
Correct answer: A. Yes, because the AED 200 million standalone revenue threshold is met on its own, independently of any Multinational Enterprise Group membership or the separate AED 3.15 billion consolidated-revenue test
Ministerial Decision No. 97 of 2023 requires a taxable person to maintain both a Master File and a Local File if either of two independent conditions is met: the taxable person's own revenue for the tax period is AED 200 million or more, or the taxable person is a constituent entity of a Multinational Enterprise Group with total consolidated group revenue of AED 3.15 billion or more. These are alternative triggers, so a standalone taxable person with AED 210 million of revenue meets the first condition on its own, with no need for group membership. Option B is wrong because it treats the AED 3.15 billion group test as the only trigger, ignoring the independent AED 200 million standalone-revenue trigger. Option C is wrong because the AED 200 million threshold specifically triggers the Master File and Local File obligation itself, in addition to the separate disclosure form required of all taxable persons with related-party transactions. Option D is wrong because the AED 200 million test is based on the taxable person's total revenue, not specifically on the value of related-party transactions.
Source: UAE Ministerial Decision No. 97 of 2023 (Transfer Pricing Documentation)