Do taxpayers need to consider whether intra-group loan arrangements are at arm’s length?
Yes, transfer pricing rules will apply to all transactions with Related Parties and Connected Persons. Therefore, any loan obtained from (or granted to) a Related Party or Connected Person needs to be at arm’s length (e.g. interest rate, duration, etc.).
lets say if the related party is not charging interest, then also we need to charge deemed interest ?
Transactions with related parties must comply with transfer pricing regulations as per Article 34 and 35 of the UAE Corporate Tax. Accordingly, for intra-loan transactions, interest must be charged at arm’s length on the said loan.