Keeping both Master File and Local File is a requirement for Taxable Persons that are a Constituent Company of an MNE Group that has a total consolidated group Revenue of AED 3.15 billion or more in the relevant Tax Period, or where the Taxable Person’s revenue in the relevant tax period is AED 200 million or more. However, as an exception, any Taxable Person that is part of a UAE headquartered group that is not an MNE Group (i.e. a group that does not have business establishments outside the UAE) is not required to maintain a Master File. However, they should maintain a Local File as per the above thresholds.
A Master File provides a high-level overview of an MNE group’s global operations, TP policies, information on key value drivers, and a global allocation of income and economic activity.
A Local File provides more detailed information relating to specific controlled transactions in the relevant Tax Period. It covers transactions taking place between local country affiliates and associated enterprises, including information on the identity of RP or CP, relevant financial information regarding those specific transactions, a comparability analysis, and the selection and application of the most appropriate TP method.
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