Article 55 Case Scenario
- EFG Ltd. carries out some related party transactions. Tax authorities have asked the company to provide Documentation in relation to the same. What documents should be provided by the company and what is the time limit for submission of the same?
Solution: As per the provisions of “Article 55 (Clause 2 & 3) – Transfer Pricing Documentation”, If the transactions carried out by taxable person with related parties meet the conditions prescribed by authority, he must maintain A Master File and a Local File in form prescribed by authority and The Documentation under Clause 2 of this Article must be submitted to the Authority within thirty(30) days following a request by Authority or by any such other Later date as directed by the Authority.
Therefore, EFG Ltd. has to provide a Mater File and a Local File within 30 days from the request by Authorities.
- Profound Ltd. is engaged in Fashion Business and is registered under Corporate Tax of UAE. It carries out some related party transactions. The Authorities want to access the Arm’s Length Price. What are the requirements to be fulfilled by Profound Ltd?
Solution: As per the provisions of “Article 55– Transfer Pricing Documentation”, A taxable person may require to file a disclosure regarding any Related party transactions along with Tax Return as prescribed by the authority and shall provide the Authority with any information to support the arm’s length nature of the Taxable Person’s transactions with its Related Parties and Connected Persons, within (30) thirty days following the request by the Authority, or by any such other later date as directed by the Authority.
Therefore, Profound Ltd. Is required to follow the provisions as stated above.
