Master File

A group with subsidiaries in several countries may centralise purchasing, own technology in one entity and sell through local distributors. A master file describes the wider arrangement so a local tax authority can place a particular entity's transactions in context.

The UAE Federal Tax Authority guide describes it as an overview of the MNE group's operations, overall transfer-pricing policies and allocation of income and economic activity. The local file is more detailed about one taxable person's controlled transactions, and neither document replaces the other's analysis.

Check who must maintain the master file for the relevant tax period: UAE Ministerial Decision 97 of 2023 sets two routes, taxable-person revenue of at least AED 200 million, or membership in an MNE group with consolidated revenue of at least AED 3.15 billion in the period. Verify the current instrument before relying on a threshold.

The content covers the group's legal and ownership structure and where business operates (a chart helps, but it must agree with actual entities and tax residences), its major business lines and how value is created, and the supply chain for important products and services. Ask who develops products, holds inventory, manages customers or bears significant risk, since a manufacturing entity, regional distributor and brand owner may each perform different functions.

Explain important intangible assets such as patents, trademarks, software and know-how, stating which entities develop, enhance, maintain, protect and exploit them and who legally owns them where relevant. Financing arrangements also matter, so identify central treasury, major intercompany loans and the group's funding strategy.

Describe the group's transfer-pricing policies for key categories; a written policy says how intercompany prices are intended to be set, but invoices and actual conduct must be consistent with it. Include relevant consolidated financial information and major tax rulings or agreements where the applicable guidance requires it, and coordinate with group finance to use a consistent reporting period and definitions.

Keep the UAE local file aligned with the group narrative: if the master file says a UAE entity bears no inventory risk while its local file describes it as a full-risk distributor, investigate the mismatch. The master file is not a country-by-country report, which has its own eligibility rules and data format.

Do not assume that a threshold exemption means no transfer-pricing work, because related-party prices may still need to meet the arm's-length standard and other disclosure or record duties can apply. Assign an owner across the group, since central tax staff may know global policies while local finance knows transactions and contracts, and set a timetable for each entity to check its section and flag changes before the filing or response deadline.

Maintain version control, because an organisational restructure, new intellectual-property owner or acquisition can make last year's file inaccurate, and record which financial year the file covers and why any material description changed. If a tax authority asks for documentation, respond according to the applicable process and deadline and preserve supporting contracts, schedules and local analyses; for a business owner, the master file is the group-level story that should match economic reality, explaining how related entities work together and how pricing policies fit, while the local file tests specific local transactions in that wider picture.