International business
Keep a register of your related parties and group companies, follow the transactions with them, keep your transfer pricing documents and log your economic substance in the UAE.
The International Business module is for companies that deal with related parties: a parent or sister company, a subsidiary abroad, a shareholder or a director. It keeps the register of those parties and of your group companies, follows every transaction with them, holds your transfer pricing documents and logs the evidence of your economic substance in the UAE.
The module does not post anything to your books. Your invoices and bills do that, as always. What the module adds is the view your corporate tax return needs: which income and expenses were with related parties, whether they were at arm's length, and what supports them. A transaction that was not at arm's length is added back to taxable income in the corporate tax return (Article 34), from this register.
Switch the module on#
The module is one of the optional modules of your company. When it is on, International appears in the main menu with Dashboard, Related Parties, Group Companies, Intercompany Transactions, Transfer Pricing, Economic Substance, Reports and Settings. See Modules.
To open the module you need one of the permissions Reports and dashboard (view) or Tax: VAT and corporate tax (view); Economic Substance and Reports need Reports and dashboard (view). To add or change records (related parties, group companies, intercompany transactions, transfer pricing documents and substance activities) you need Tax: prepare and file returns, record tax payments. The module's Settings, including the relevant activities for economic substance, are company settings: only the company owner changes them.
The dashboard#
Open International › Dashboard. Under the title, the financial year it covers: the same period as your corporate tax return.
- 1 Settings opens the module's settings (see below).
- 2 Related Parties: the number of active related parties. Click the tile to open the register.
- 3 Intercompany Revenue and Intercompany Expense: the year's income from and expenses with related parties, in AED, as your books have them.
- 4 Substance Score: how well the year's economic substance log covers the six areas of substance.
- A warning counts the transactions of the financial year shown that need transfer pricing support and have no pricing justification yet, with View → to those transactions.
- Quick Actions: Manage Related Parties, Group Structure, Intercompany Transactions and TP Documents.
- 5 Economic Substance Score: the score of each area, with the number of activities logged in the year.
- 6 Transfer Pricing Documents: the number of the year's documents, Draft, Finalized and in total, and the documents your company keeps according to its settings, as Required or Not Required.
- Company Classification: the classification from your settings (and the free zone, for a free zone company), with a button that opens the corporate tax screens.
How the substance score is worked out#
The six areas are Office & Premises, Employees, Strategic Decisions, Operating Expenditure, Assets and Core Income Generating Activities. Each area scores by the number of activities you logged for it in the financial year that took place in the UAE: none 0%, one or two 30%, three to five 60%, six or more 100%. The overall score is the average of the six. See Economic substance.
Settings#
Open International › Settings, or Settings on the dashboard. The settings describe your company for this module.
| Part | What you enter |
|---|---|
| 1 Company Classification | Mainland, Free Zone, Offshore or Branch of Foreign Company. For a free zone company, also the Free Zone and the Free Zone License Number. |
| Group Structure | 2 Tick This company is part of a larger corporate group, then give the Ultimate Parent Company Name and choose the Ultimate Parent Country. |
| 3 Corporate tax | Nothing to enter: the card says where each part of corporate tax is set, with a button to each screen (Small Business Relief, the qualifying free zone person assessment, the financial year and the tax settings), and which rates the corporate tax return applies. |
| 4 Transfer pricing | The rule of Ministerial Decision No. 97 of 2023 (Article 2): a master file and a local file are kept for a tax period when the company's revenue in that period is AED 200 million or more, or when it belongs to a multinational group with consolidated group revenue of AED 3.15 billion or more. Under it, the transactions Verasol asks a pricing justification for (see which ones), and Documents your company keeps: tick the master file, the local file and the country-by-country report your company keeps. The ticks are for your records; the dashboard shows them as Required or Not Required. |
| 5 Economic Substance | Relevant Activities: tick the activities your company carries out, from the nine relevant activities of Cabinet Decision No. 57 of 2020 (banking, insurance, fund management, lease-finance, headquarters, shipping, holding company, intellectual property, distribution and service centre). It is the same list as on the Economic Substance screen. |
| Notes | Anything else about your international set-up. |
Click 6 Save Settings.
How the parts fit together#
- Add your group companies, if the related parties belong to a group.
- Mark the customers and vendors that are related parties in the related parties register.
- From then on, every invoice you issue to them and every bill you approve from them is added to the intercompany transactions by itself. Review each one: its transfer pricing method, its justification and whether it was at arm's length.
- Keep your transfer pricing documents and check the related-party reports of the year before you file your corporate tax return.
- Log your economic substance as it happens.