Definition

A Related Party is a person or entity connected to a business through ownership, control, or kinship. Under UAE Corporate Tax, transactions with related parties must comply with transfer pricing rules.

Key points

• Includes parent companies, subsidiaries, shareholders, and family members.
• Transactions must follow the arm’s length principle.
• Requires disclosure in Corporate Tax Return.
• Subject to FTA review and adjustments.

Practical example

A company rents office space from its owner’s relative. The rent must be set at market value for tax purposes.

Why it matters

Related party rules ensure fairness and prevent profit shifting.