The UAE Transfer Pricing rules require that all managerial compensation paid to Connected Persons (i.e., Owners, Directors, officers or any other C-suite or equivalent executive positions) should reflect the market value. Failing to do so can lead to non-compliance.
Our transfer pricing team can help you ensure your executives’ compensation aligns perfectly with the arm’s length principle, keeping your business compliant with UAE TP regulations.
Our Approach Towards Salary Benchmarking Study
At BAM Tax Advisors, we offer a structured, comprehensive, and fully compliant approach with tailor-made documentation.
Our Process
Our process includes the following key steps:
We conduct interviews with Connected Persons to gain a thorough understanding of their daily responsibilities, decision-making authority, and overall contribution to the business.
We then analyze the roles and responsibilities of Connected Persons from a transfer pricing perspective.
We evaluate and select the most appropriate transfer pricing methods to determine the acceptable arm's length range for executive compensationfor Connected Persons.
We work closely with leading HR consultancy firms in the UAE to conduct formal benchmarking analysis tailored to specific executive roles.
What We Assess
Together with our HR partners, we assess:
- Executive roles with similar responsibilities across the UAE and the broader GCC market.
- Comparable target companies, based on factors such as key responsibilities, experience, company size, ownership, revenue, number of employees, and business functions.
- All components of the compensation package, including:
- Basic Salary
- Housing and Transportation
- Annual Bonus/Commission/Long-term incentives
- Annual medical insurance
- Annual air tickets
- Annual education allowance
- The arm’s length remuneration range, including minimum, median, maximum, and average values.
Robust Documentation Ensuring Compliance
We prepare a comprehensive Transfer Pricing Memorandum to document our findings, analysis, and recommendations. This documentation serves as evidence of your compliance efforts.
