A Practical Guide to Master File & Local File Preparation
A Master File and Local File are not filed with the Federal Tax Authority as a matter of course — they are built, kept current, and produced within the stipulated window, generally 30 days, whenever the FTA asks. That distinction is precisely where most groups get exposed: the obligation to maintain the documentation exists from the moment the thresholds under Ministerial Decision No. 97 of 2023 are met, whether or not a request ever arrives.
What This Actually Covers
Master File and Local File preparation is the documentation exercise that evidences a UAE taxable person's arm's length position under Article 34 of the Corporate Tax Law (Federal Decree-Law No. 47 of 2022, applicable to financial years starting on or after 1 June 2023). Ministerial Decision No.
For the full scope, current process and what PNPC includes, see the dedicated Master File & Local File Preparation service page.
When You'd Need This
- The UAE taxable person is part of an MNE Group whose consolidated group revenue meets or exceeds the prescribed threshold under Ministerial Decision No.
- The entity has material related-party transactions — intercompany sales of goods, management fees, royalties, intercompany loans, cost allocations — with a foreign parent, sister company, or a mainland-Free Zone affiliate under common control
- A Qualifying Free Zone Person in the group needs its related-party pricing documented so an FTA review cannot recharacterise Qualifying Income and threaten the 0% rate
- The group already prepares a global Master File for another jurisdiction's BEPS Action 13 regime and needs it adapted, reviewed for currency, and aligned to UAE-specific requirements rather than rebuilt from scratch
What This Doesn't Cover
- Related-party transaction values sit below the disclosure and documentation thresholds under Ministerial Decision No.
- The taxable person has no related-party or connected-person transactions at all — the Master File and Local File obligation only arises where a qualifying relationship and threshold are both met
- The immediate need is only the annual Related Party Transactions disclosure form, and the group is below the Local File and Master File thresholds — that is a narrower, separate filing exercise PNPC scopes independently
Common Questions
What is the difference between the Master File and the Local File?
The Master File presents the group-wide picture — organisational structure, business description, intangible ownership, intercompany financing, and consolidated financial position — and is common across every entity in the group. The Local File is entity-specific, covering the UAE taxable person's own material related-party transactions, its FAR analysis, the method applied to each transaction category, and the benchmarking evidence supporting the pricing used. Ministerial Decision No. 97 of 2023 requires both where the applicable thresholds are met, and they serve different, complementary purposes for an FTA reviewer.
Do we have to file the Master File and Local File with the Corporate Tax return every year?
No. Neither document is submitted automatically alongside the Corporate Tax return. The obligation is to maintain both, keep them current, and produce them to the FTA within the stipulated period, generally 30 days, if the FTA requests them. What is filed with the return is the separate Related Party Transactions disclosure form, which is a shorter schedule, not the full Local File or Master File.
What triggers the requirement to prepare a Local File?
The Local File is required where the taxable person individually exceeds the prescribed standalone revenue threshold, or is part of an MNE Group meeting the prescribed consolidated group revenue threshold, under Ministerial Decision No. 97 of 2023. Both conditions are tested independently — an entity below the standalone threshold can still be caught through its group's consolidated position.
Working With PNPC Global
Build your Master File and Local File before the FTA's 30-day clock starts, not after — speak to PNPC's Dubai transfer pricing desk.
PNPC Global has advised Dubai businesses since 1986. Explore the full UAE Taxation & Regulatory Compliance practice for related services, or go straight to the Master File & Local File Preparation page for specifics.
Specific rates, fees, thresholds and deadlines are set by the relevant authority and change over time — this article deliberately does not quote figures that could go stale. Confirm current numbers directly with PNPC or the official source before you act.