External comparable support is needed
The business has no reliable internal uncontrolled transaction against which to test the controlled arrangement.
mkACE Management Consultancy logo reveal. Click once to finish the animation, click again or press Escape to close.
UAE Transfer Pricing / Benchmarking
Support the price, rate or marginwith comparable evidence.
A benchmarking study tests an identified transaction using reliable internal or external comparables. We document the method, search strategy, screening decisions, adjustments and result so the conclusion can be followed and used in the wider Transfer Pricing file.
Method before databaseThe economic question is defined first
Transparent screeningAccepted and rejected comparables are traceable
Usable resultThe range connects to the tested financial outcome
When this service fits
Choose it for a defined business need.
Use benchmarking after the transaction and pricing method are sufficiently clear. A database result cannot repair an incorrectly delineated arrangement.
An existing study is out of date
The covered period, comparable companies, financial data or business conditions no longer support current use.
The result must be tested
Finance needs to compare the recorded margin, price or rate to an identified arm's-length result before filing.
A Local File needs economic analysis
The formal document requires a transaction-specific method, tested-party selection and comparable evidence.
How the engagement moves
Four stages. A defined output at every stage.
Every material screen and judgement is documented. The objective is a defensible comparable set—not the largest list or a predetermined range.
01Stage 01
Define the test
Confirm the accurately delineated transaction, method, tested party, profit-level indicator or pricing variable, period and geographic scope.
Stage outputDefined economic testing framework
02Stage 02
Assess available comparables
Review potential internal comparables first, then define the external database search where reliable internal evidence is unavailable.
Stage outputComparable-source decision
03Stage 03
Search and screen
Apply documented quantitative and qualitative criteria, examine business descriptions and financial information, and record rejection reasons.
Stage outputDocumented screening log
04Stage 04
Calculate and conclude
Compute the result, consider reliable adjustments, test the controlled outcome and explain how the conclusion should be applied.
Stage outputBenchmark result and conclusion
Defined deliverables
What management receives.
The report shows both the final result and the route taken to reach it, allowing management, auditors and the wider file preparer to follow the analysis.
Method and tested-party rationale
The economic question, selected method, tested party or price variable, and why the available data is reliable.
Search strategy
Database, geography, industry codes, keywords, financial filters, period and other search parameters.
Comparable set and screening log
Accepted companies or transactions, rejection reasons, qualitative review and source references.
Results and conclusion
Calculations, statistical range where appropriate, adjustments, tested outcome and implementation observations.
Economic-analysis principle
Comparable data is useful only when it is comparable to the transaction tested.
The FTA guide recognises five standard Transfer Pricing methods and allows another method where the recognised methods cannot reasonably be applied. The most appropriate method depends on the transaction, functions and reliable information available.
Federal Tax Authority — Transfer Pricing Guide (CTGTP1)Check internal comparables first
A reliable uncontrolled transaction involving the tested business can be more direct than an external database search.
Prefer the reliably testable side
The selection should reflect functional complexity and the quality of available segmented data.
Substance over industry labels
Business activities, markets, functions, assets and risks matter beyond an industry code.
Match the covered period
Financial data and multi-year information are used only where they improve reliability for the transaction and period.
Records to begin
Start with the evidence that creates the position.
A reliable benchmark begins with a reliable transaction analysis and tested financial information.
- Transaction policy or functional-analysis draft
- Intercompany agreement and invoice samples
- Description of the tested activities and markets
- Segmented profit-and-loss or transaction data
- Cost-base and allocation details where relevant
- Internal uncontrolled transaction information
- Prior benchmarking studies and search files
- Covered tax period and intended documentation use
Questions before you engage
Clear answers about this scope.
These answers explain the service boundary. The final treatment and engagement plan depend on the entity, period, records and current UAE requirements.
Do all Transfer Pricing methods require a benchmark?
No. The evidence depends on the selected method and available reliable information. Some transactions may be supported by internal comparables or other direct evidence.
Can we use a benchmark prepared for another country?
Possibly, but only after assessing transaction, market, geographic, accounting and data differences. It should not be copied into the UAE file without that review.
What is the arm's-length range?
It is the result of the accepted comparable data and calculation method. The study explains the range and how the tested transaction compares with it.
How often does a benchmarking study need updating?
That depends on changes in the transaction, market and comparable set, plus the period for which the data is being used. We state the recommended review approach in the report.
Can the benchmark be used for year-end true-ups?
Yes, where the policy and accounts permit. We show how the tested result relates to the recorded outcome; the accounting and legal implementation is then confirmed with the business.
Related services
Move to the service that matches the next requirement.
Each page has its own defined purpose. Use the current service for the work described here, or choose another service when the business need changes.
Contact Us
Scope a Benchmarking Study Define the transaction before searching for comparables.
Send the transaction type, tested entity, period and any existing functional analysis so we can define the study scope.