Dhruva, a tax advisory firm with deep expertise across the Middle East, and global markets, stated that the Gulf Cooperation Council (GCC) is at a clear inflection point in its fiscal evolution. Transfer pricing is moving beyond first-wave rulemaking into an enforcement-led environment where it is increasingly treated as a core element of corporate governance.

Drawing on the UAE Year in Review 2025 report recently launched by Dhruva, the region is moving past inaugural filing seasons and confronting the limits of reactive, post-facto compliance. “The past year has been transformative, representing not merely technical adjustments but a strategic recalibration of the region’s economic architecture,” said Nimish Goel, Leader, Middle East at Dhruva. In this environment, the behavioral reality of a business must align with its legal documentation, as tax authorities raise expectations around demonstrable economic substance.

A central theme in this scrutiny is Key Management Personnel (KMP). Where decision-making occurs, who exercises control, and how governance is evidenced are becoming determinative factors in how profits are attributed and defended. Inconsistencies across HR contracts, organization charts, board minutes, operational reality, and transfer pricing files are increasingly treated as a credibility gap, not a documentation error.

This recalibration is being accelerated by a shift in audit approach. Tax authorities across the GCC are moving from form-based reviews to more sophisticated, data-led scrutiny. Kapil Bhatnagar, Partner at Dhruva, stated that, “A key focus is the ‘invisible backbone’ of many regional groups, common-control and related-party transactions that sit at the heart of multilayered conglomerate structures. Informal arrangements historically treated as low-risk are increasingly being evaluated through an arm’s length lens, including interest-free shareholder loans, uncharged centralized services, legacy intercompany balances, and balance-sheet support. For forward-looking organisations, transfer pricing is no longer a compliance obligation but a strategic enabler.”

In parallel, the UAE has signaled stricter arm’s length expectations for Qualifying Free Zone Persons, with transfer pricing increasingly functioning as the mechanism through which substance is demonstrated under the Corporate Tax regime.

The stakes are further elevated by Pillar Two global minimum tax developments. Effective 2025, most GCC jurisdictions, including the UAE, Qatar, and Bahrain, either implemented or were in the final stages of implementing Domestic Minimum Top-up Taxes (DMTT). Under these rules, intercompany pricing can no longer be treated purely as a compliance variable, since it can materially influence a group’s effective tax rate and potential top-up exposure.

“In response, leading groups are shifting toward operational transfer pricing, embedding pricing policies into ERP workflows to improve year-round accuracy, data integrity, and audit readiness. This is increasingly relevant as audits begin to rely more heavily on data analytics, ERP trails, and transaction-level evidence, with deeper linkage expected between transfer pricing documentation, financial statements, tax returns, and support evidence,” added Kapil.

At the same time, demand is rising for certainty and dispute-prevention mechanisms, including Advance Pricing Agreements (APAs) and Mutual Agreement Procedures (MAPs), particularly for complex cross-border arrangements where predictability is commercially valuable. The UAE has already established a formal framework for clarifications and directives including APAs, confirmed unilateral APA applications from Q4 2025, and introduced a schedule of APA fees effective from January 1, 2026.

As the region moves into its next phase of maturity, Kapil concluded, “The message is clear, the era of fixing and filing is over. The era of governance, digitization, and transparency has begun.”

Dhruva, a premier tax advisory firm with deep expertise across the Middle East, India, and Asia, stated that the UAE’s latest amendments to the VAT Law and the Tax Procedures Law, issued by the Federal Tax Authority (FTA) which are effective from 1 January 2026, represent a significant shift toward a more structured, and risk-focused tax environment. These amendments are expected to reinforce responsible compliance behaviors and reduce administrative friction for UAE businesses.

Dhruva noted that one of the most practical and welcoming changes is that it eliminates the requirement for taxpayers to self-issue tax invoices for imports subject to the reverse charge mechanism, which provides a lot of ease to businesses. Post series of amendments and clarifications issued by the FTA in 2025 in relation to self-issuance of tax invoices for imports, while a general exception was granted for such requirement for import of services, the same were required in case of import of goods for record-keeping purposes.  This often-added administrative complexity without impacting the actual tax liability or input tax entitlement. Under the updated rules, taxable businesses have removed the obligation entirely, and hence, businesses will only need to maintain standard supporting documentation, such as invoices, contracts, and transaction records.

However, the firm highlighted that while some administrative burdens are being eased, compliance expectations are tightening elsewhere.  One of the amendments gives the FTA authority to deny input tax recovery in cases linked to tax evasion – where a taxpayer knew or, critically, should have known, that a supply or its broader supply chain was connected to tax evasion.  The law clarifies that taxpayers will be deemed to have been aware if they fail to verify the validity and integrity of the supply in accordance with procedures to be issued by the FTA.

Dhruva explained that historically, the responsibility to account for VAT rested primarily with the supplier, and recipients focused mainly on validating the tax invoice and meeting standard input-tax recovery conditions. In practice, however, the FTA has often linked a recipient’s input-tax eligibility to the supplier’s discharge of output VAT, denying recovery where gaps existed. The latest amendment now formally embeds this position in law, imposing additional due-diligence obligations on the recipient.

Ujjwal Pawra, Partner at Dhruva Consultants, commented, “This is a significant change. It is a clear message that the right to input tax recovery comes with the responsibility to validate the integrity of one’s suppliers and supply chain. Businesses must now demonstrate that they exercised practical, documented, and consistent due diligence. Clean invoices alone are no longer enough; what matters is a clean process.”

While the procedures and conditions are awaited, Dhruva advised that companies reassess onboarding procedures, supplier-vetting protocols, and documentation trails to ensure they align with the FTA’s expected standards. 

Another material operational change is the introduction of a defined timeframe to act on credit balances. Under the amended framework, businesses will generally have up to five years from the end of the relevant tax period to request a refund of a credit balance or use that balance to settle tax liabilities, with targeted flexibility in specified cases where credits arise late in the cycle.

Transitional relief is also available for certain older credits around the changeover, which can help businesses address legacy positions in an orderly way. Dhruva said these changes reduce the risk of credits remaining unresolved on the balance sheet, improve cash flow planning, and encourage clearer internal ownership of refund positions.

Ujjwal further added, “The UAE has introduced a more robust operating framework for credit balances and refunds in line with international best practices. The message is simple: know your credits, map the deadlines, and file claims that are clear, complete, consistent, and easy to validate.”

Dhruva advised UAE businesses to act now with a finance-led approach. This starts with building a central credit-balance register by tax type and tax period, assigning an accountable owner, and tracking action dates so credits are either utilised or claimed in time. Businesses should also treat refund submissions as audit-ready files by preparing reconciliations, supporting documents, and a concise explanation of how the credit arose and why the amount is correct before submitting, rather than rebuilding the file after queries begin. In parallel, companies should prioritise older credit positions to assess whether they fall within the transitional relief window and avoid last-minute filings.

The firm also advised businesses to monitor any binding directions issued by the FTA and align their tax positions, documentation, and system settings accordingly to minimize interpretational differences and strengthen consistency over time.

By Hennie du Plessis, Senior Vice President, Payment Services, Middle East and Africa at IDEMIA Secure Transactions (IST)

The festive season is one of the busiest periods of the year for UAE travelers. From year end getaways and family visits, to overseas shopping and digital gifting, consumers increasingly rely on contactless cards and mobile wallets to make payments quickly and conveniently.

Beyond higher spending, the festive season also acts as a real stress test for digital payment ecosystems. Transaction volumes peak, payment environments become less familiar, and consumers move rapidly across borders. This combination of factors increases exposure to fraud if the right safeguards are not in place. As digital payments scale, security becomes a critical enabler of trust.

According to IDEMIA Secure Transactions’ latest Global Consumer Payment Survey, which included UAE respondents aged 18 to 71, more than 8 in ten consumers have already adopted digital cards with biometric features, while 92 percent express interest in numberless cards. These figures reflect a growing expectation for payment experiences that combine speed, simplicity, and security.

With contactless payments now accounting for 84 percent of face-to-face transactions in the UAE and mobile wallet usage surpassing 50 percent, the festive season is a critical moment for travelers to reassess how they protect their finances while on the move.

1. Avoid Public Wi-Fi for Payment Activity

Festive travel often means relying on airport or hotel Wi-Fi, but unsecured networks remain a common entry point for cybercriminals. Accessing banking apps or making purchases over public Wi-Fi can expose sensitive information at interception. Travelers should use mobile data or a trusted VPN when handling financial transactions. A few moments of convenience are never worth the risk of compromised financial data, especially during peak travel periods.

2. Use Secure Digital Payment Solutions

Not all payment tools offer the same level of protection. Today, tokenization has become a global industry standard for securing digital transactions, replacing sensitive card details with unique digital tokens that are useless if intercepted. Mobile wallets such as Apple Pay, Google Pay, and Samsung Pay already rely on this technology.

Beyond protecting data in transit, tokenization also limits exposure in the event of merchant-side data breaches, as real card numbers are never stored or shared. Tokens are typically device-specific and transaction-bound, adding an additional layer of protection even if credentials are compromised elsewhere.

IDEMIA Secure Transactions plays a key role in enabling tokenized payments at scale, supporting secure transactions across in-store, online and in-app environments through its EMVCo-certified Token Platform. Digital co-badged cards offer global compatibility without sacrificing local functionality. By ensuring that real card numbers are never shared, tokenization significantly reduces fraud risk while preserving a smooth user experience. In addition, digital wallets can be remotely suspended if a device is lost or stolen, offering travelers greater control and peace of mind while abroad.

3. Decline Dynamic Currency Conversion

While shopping abroad during the festive season, merchants often offer travelers the option to pay in AED. This practice, known as dynamic currency conversion, typically includes hidden markups and unfavorable exchange rates. Paying in the local currency allows banks to apply more transparent conversion rates, helping consumers avoid unnecessary costs. This simple choice can make a meaningful difference for frequent travelers and international shoppers alike.

Another possibility for travelers is to use the Tap to Phone technology provided by some banks and supported by IST. Instead of having to switch cards across borders, it enables the travelers to modify their card features, such as credit/debit options and the currency used for transactions, with a simple tap on a smartphone via their banking app. This simple habit can save money and ensure better financial clarity while greatly facilitating international card usage.

4. Enable Real Time Alerts and Card Controls

With spending increasing during the festive period, real time monitoring is essential. Many UAE banks and fintech platforms offer instant transaction alerts, spending limits and location-based restrictions that allow consumers to monitor activity as it happens.

Crucially, modern security no longer has to come at the expense of convenience. These tools enhance protection while maintaining the fast, frictionless payment experiences that consumers expect, particularly in a market where one-click and contactless payments are widely adopted. This aligns with consumer expectations, as 96 percent of UAE users prefer simplified one click payment experiences. Real time controls enhance security without adding friction.

5. Secure Devices Before You Travel

Smartphones now function as wallets, boarding passes and identity tools. Before travelling, users should update device software, enable biometric authentication and avoid storing sensitive information in unsecured apps. Travelers should also activate remote lock and wipe functionality, ensure cloud backups are enabled, and avoid carrying all payment methods on a single device. Keeping at least one physical card separate from the phone provides an important fallback. While digital wallets rely on encrypted token technology, 29 percent of surveyed users still express concerns about digital card security, and 43 percent do not fully understand how these tools work. Basic preparation can significantly reduce risk and soothe concerns.

As UAE card payments are expected to reach USD 150 billion this year, the festive season highlights the need for secure and user-friendly payment infrastructure. By adopting the right tools and habits, travelers can focus on celebrating rather than dealing with fraud.

For the payments industry, the challenge is clear: security must be built into every transaction in a way that protects users without disrupting their experience. When trust is embedded seamlessly, travelers are free to enjoy the moments that matter most, wherever their journey takes them.