Benchmarking Analysis Services
Registered Tax Agent Regulated by the FTA (Federal Tax Authority)
Benchmarking Analysis Services in the UAE
Objective, market-based evidence that your related-party pricing holds up to scrutiny.
Benchmarking analysis provides the objective, market-based evidence needed to demonstrate that related-party transactions are priced at arm’s length under the UAE Corporate Tax framework. Farahat & Co. provides structured benchmarking analysis services for management fees, service charges, royalties, intercompany loans, cost allocations, and other controlled arrangements.
- OECD-aligned methodology, applying recognised transfer pricing methods to UAE-specific documentation requirements
- Defensible, evidence-based reporting, built to withstand FTA review rather than just satisfy a checklist
- Direct integration with Transfer Pricing documentation, feeding straight into your Local File
Without proper benchmarking support, a business may struggle to justify its related-party pricing during an FTA review, increasing its taxable income and exposing it to penalties.
Our Specialists In Benchmarking Analysis Services
Romany Shayb
Senior Tax Consultant
Md. Kamruzzaman, FCA
Senior Tax Consultant
Ahmad Ali Jourieh
Senior Tax Consultant
Mohammed Ghoraba
Senior Tax Agent
Anas Al Salman
Corporate Tax Consultant
As a Trusted Corporate Tax Consultancy in the UAE, Farahat & Co. Offers the Following Corporate Tax Services:
What Is Benchmarking Analysis?
Benchmarking analysis is the process of assessing whether transactions between related parties or connected persons are priced on an arm’s length basis. It compares controlled transactions against comparable independent transactions or companies to determine whether the pricing reflects what unrelated parties would agree to under similar circumstances.
The Federal Tax Authority has the authority to review controlled transactions and make transfer pricing adjustments where pricing isn’t considered arm’s length, increasing taxable income and potentially triggering penalties. Benchmarking analysis addresses this risk directly, helping businesses:
- Defend their pricing position during FTA reviews and tax audits
- Reduce the risk of transfer pricing adjustments that increase taxable income
- Strengthen transfer pricing documentation with reliable comparable data
- Avoid penalties arising from insufficient or unsupported documentation
Beyond compliance, benchmarking also gives management a clearer view of whether group pricing policies are commercially reasonable and consistent across entities.
Who Needs Benchmarking Analysis, and When?
Benchmarking analysis is relevant for any UAE business with controlled transactions between related parties or connected persons, most commonly:
- Companies dealing with group entities for goods, services, or financing
- Businesses with UAE entities transacting with foreign group companies
- Companies paying or receiving management fees, royalties, or shared service costs
- Entities with intercompany loans, cost-sharing, or expense allocation structures
It’s typically prepared when a business is building its transfer pricing documentation, introducing a new intercompany charge, reviewing existing pricing policies before year-end, or responding to an FTA query or tax audit.
Our Benchmarking Analysis Process
- Identify controlled transactions: we review related-party and connected-person transactions, understanding their nature, value, and terms.
- Conduct functional and risk analysis: we assess the functions performed, assets used, and risks assumed by each party involved.
- Select the appropriate method: based on the transaction profile and available data, we select the most suitable method, such as TNMM, CUP, Cost Plus, Resale Price, or Profit Split.
- Identify comparable data: we conduct a structured search of recognised commercial databases, applying defined screening criteria to identify genuinely comparable companies or transactions.
- Determine the arm’s length range: we analyse the financial data of comparables to establish a defensible, evidence-based pricing range.
- Prepare the benchmarking report: a structured report documenting methodology, comparable selection, analysis, and conclusions, ready for inclusion in your transfer pricing Local File.
Documents and Information Required
- Group structure chart
- Details of related-party and connected-person transactions
- Intercompany agreements
- Financial statements and trial balances, or segmental financial statements
- Functional profiles of the parties involved
- Existing transfer pricing documentation, where available
- Details of management fees, royalties, service charges, loans, or cost allocations
Exact requirements vary depending on business structure, transaction type, and the scope of the review.
Why Choose Farahat & Co. for Benchmarking Analysis
Farahat & Co. covers the full benchmarking process, from transaction review and functional analysis through to method selection, comparable data search, arm’s length range calculation, and the final report, handled with technical accuracy and a practical understanding of UAE Corporate Tax requirements.
- Full-process coverage: every stage of the benchmarking study handled under one engagement
- OECD and UAE alignment: methodology grounded in both international standards and UAE-specific requirements
- Direct Transfer Pricing integration: our benchmarking work connects directly with our Transfer Pricing documentation services
- Established track record: over four decades supporting UAE businesses across tax and regulatory compliance