Quick Answer
Country by Country Reporting (CbCR) in the UAE applies to multinational enterprise (MNE) groups with consolidated group revenue of AED 3.15 billion or more in the preceding financial year, under Cabinet Resolution No. 44 of 2020. In-scope groups must submit a CbCR notification by the last day of the reporting financial year and file the full Country by Country Report within 12 months of the financial year end. Penalties for missing these deadlines start at AED 1,000,000 and can rise with daily fines, so the notification date is the one businesses most commonly miss.
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What Country by Country Reporting Is
Country by Country Reporting is a transfer pricing transparency mechanism, developed under the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 framework, that requires large multinational groups to give tax authorities a jurisdiction-by-jurisdiction breakdown of where they earn revenue, book profit, pay tax, and employ people. Instead of assessing a group’s tax position from a single entity’s local filing, a CbC Report lets the FTA and its treaty partners see the full group picture at once, which makes it far easier to spot profit being booked in low-tax jurisdictions that does not match where the group’s actual economic activity, staff, and assets sit.
In the UAE, CbCR sits alongside, but separate from, the general transfer pricing documentation rules under Federal Decree-Law No. 47 of 2022, Articles 34 to 38, and Ministerial Decision No. 97 of 2023. Transfer pricing documentation (a Master File and Local File) covers the pricing of specific related-party transactions. CbCR is broader and higher-level: it is a single, standardised report at the ultimate parent level, not a transaction-by-transaction analysis.
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Who Must Comply: The AED 3.15 Billion Threshold
CbCR obligations apply to an MNE Group where the consolidated group revenue in the financial year immediately preceding the reporting financial year is AED 3.15 billion or more. A UAE entity is in scope if it is part of such a group, regardless of whether the UAE entity itself is large or small, because the threshold is tested at the consolidated group level, not the local entity level. A UAE holding company with modest standalone revenue can still trigger notification obligations if the group’s worldwide consolidated revenue clears AED 3.15 billion, a point smaller UAE entities inside larger international structures frequently overlook.
Two separate obligations follow from being in scope:
- CbCR Notification: every UAE tax resident entity that is part of an in-scope MNE Group must notify the Ministry of Finance, identifying which entity in the group will file the CbC Report and in which jurisdiction.
- CbC Report: only the designated Reporting Entity, usually the Ultimate Parent Entity if it is UAE tax resident, or a Surrogate Parent Entity appointed for the group, actually files the full report.
A UAE subsidiary of a large foreign-headquartered group does not usually file the report itself. It still has to submit the notification confirming where the group’s report will be filed.
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Deadlines: Notification vs. Filing
These two obligations run on different clocks, and confusing them is the most common compliance mistake.
| Obligation | Deadline | Who Files |
|---|---|---|
| CbCR Notification | Last day of the reporting financial year (e.g. 31 December for a calendar-year group) | Every UAE tax resident entity in the in-scope group |
| Country by Country Report | Within 12 months of the end of the reporting financial year | The designated Reporting Entity only (Ultimate Parent or Surrogate Parent, if UAE tax resident) |
| Record retention supporting the report | 5 years | All UAE entities within the group |
The notification deadline falls on the same day the financial year ends, which means it has to be handled before the year has even closed on the accounting side. Groups that wait until they are preparing consolidated accounts to think about CbCR typically miss it.
What the Report Must Contain
A CbC Report is built around three tables, aligned with the OECD’s standard template:
- Table 1: revenue (split between related and unrelated party transactions), profit or loss before tax, income tax paid and accrued, stated capital, accumulated earnings, number of employees, and tangible assets other than cash, all broken down by tax jurisdiction.
- Table 2: a list of every constituent entity in the group, the jurisdiction it is tax resident in, and its main business activities.
- Table 3: additional context the group wants to provide to explain the data in Tables 1 and 2.
Because the report aggregates figures by jurisdiction rather than by entity, a group with several UAE entities reports one combined UAE line, not separate figures for each local company.
Penalties for Non-Compliance
Cabinet Resolution No. 44 of 2020 sets out administrative penalties for CbCR failures, and they are structured to escalate the longer a violation continues.
| Violation | Penalty |
|---|---|
| Failure to submit the CbCR notification on time | AED 1,000,000, plus AED 10,000 per day of continued failure (capped at an additional AED 250,000) |
| Failure to file the CbC Report on time | AED 1,000,000, plus AED 10,000 per day of continued failure (capped at an additional AED 250,000) |
| Incomplete or inaccurate information in the CbC Report | AED 50,000 to AED 500,000 |
| Failure to retain supporting records for the required period | AED 100,000 |
| Failure to provide information requested by the Ministry of Finance | AED 100,000 |
Groups typically get a short window, generally around 14 days, to voluntarily correct a violation before a penalty is formally issued, and there is a right to appeal within 30 business days of receiving a penalty decision. Beyond the direct fines, a late or inconsistent CbCR filing tends to draw closer scrutiny from tax authorities in every jurisdiction the group operates in, since CbC Reports are exchanged automatically between tax authorities under the UAE’s network of Competent Authority Agreements.
Worked Example
Example: A UAE-headquartered manufacturing group has a financial year ending 31 December. Its consolidated global revenue for the year ending 31 December 2025 was AED 3.4 billion, above the AED 3.15 billion threshold. For the reporting financial year ending 31 December 2026, every UAE tax resident entity in the group must submit its CbCR notification by 31 December 2026, confirming that the UAE parent company will file the group’s CbC Report. The parent company then has until 31 December 2027, 12 months after the financial year end, to submit the full report. If the group misses the notification deadline and only submits it 20 days late, the exposure is AED 1,000,000 plus AED 200,000 in daily penalties (AED 10,000 x 20 days), well within the AED 250,000 daily cap.
How CbCR Fits Into the Wider UAE Transfer Pricing Framework
CbCR is one layer of a broader transfer pricing compliance structure that applies to UAE businesses under Federal Decree-Law No. 47 of 2022. Groups above the CbCR threshold are, in almost every case, also subject to the general transfer pricing documentation and disclosure requirements that apply at a much lower revenue level, including Master File and Local File obligations and the arm’s length pricing standard for related-party transactions. CbCR does not replace those obligations. A group can be fully compliant on its Master File and Local File and still face separate, substantial penalties for missing a CbCR notification deadline.
How the UAE’s CbCR Rules Developed
The UAE first introduced CbCR through Cabinet Resolution No. 32 of 2019, applying to MNE Groups headquartered in the UAE for financial years starting on or after 1 January 2019. Cabinet Resolution No. 44 of 2020 replaced and expanded that framework, refining the notification mechanism, aligning the UAE’s rules more closely with the OECD’s minimum standard, and clarifying the penalty structure. The result is that CbCR has now been a live compliance obligation in the UAE for several reporting cycles, and the Ministry of Finance has correspondingly less tolerance for groups that treat the notification deadline as a formality rather than a hard cut-off.
Because CbC Reports are exchanged automatically between the tax authorities of countries that have a Competent Authority Agreement with the UAE, a UAE group’s report does not stay local. Foreign tax authorities where the group has subsidiaries or branches receive the same jurisdiction-by-jurisdiction figures, which is precisely the transparency the mechanism is designed to create.
Practical Compliance Steps for In-Scope Groups
Groups approaching or above the AED 3.15 billion threshold generally need to work through the same sequence each reporting cycle:
- Confirm consolidated group revenue for the preceding financial year against the AED 3.15 billion threshold, using audited consolidated figures rather than estimates.
- Identify every UAE tax resident entity within the group, since each one carries an individual notification obligation.
- Confirm which entity is the Ultimate Parent Entity, and whether it is UAE tax resident, non-resident, or whether a Surrogate Parent Entity needs to be appointed.
- Diarise the notification deadline against the group’s actual financial year end, not the calendar year, if the group does not run on a calendar financial year.
- Build the three-table CbC Report data set well ahead of the 12-month filing deadline, since consolidating revenue, profit, tax paid, and headcount by jurisdiction across a large group takes considerably longer than most groups initially plan for.
- Retain the underlying data supporting the report for at least 5 years, in case the Ministry of Finance requests supporting documentation.
Groups that miss the notification deadline in one year should not assume the following year’s deadline resets any leniency. Each reporting financial year is a separate obligation, and a prior late notification does not reduce scrutiny on the next one.
Frequently Asked Questions
Does a small UAE subsidiary of a large multinational group need to file its own CbC Report?
No. Only the designated Reporting Entity files the report, usually the Ultimate Parent Entity. The UAE subsidiary still has to submit its own CbCR notification confirming where the report will be filed.
Is the AED 3.15 billion threshold tested on UAE revenue or global group revenue?
Global, consolidated group revenue. A UAE entity with modest local revenue can still be in scope if the group it belongs to exceeds the threshold worldwide.
What happens if the group’s revenue drops below the threshold in a later year?
The obligation is tested each year against the preceding financial year’s consolidated revenue. A group that falls below AED 3.15 billion is not required to notify or file for that reporting year, though it should keep documentation of the calculation showing it fell out of scope.
Can a UAE entity appoint a Surrogate Parent Entity instead of relying on a foreign Ultimate Parent?
Yes, in specific circumstances, such as where the Ultimate Parent’s jurisdiction does not have CbCR legislation or a suitable exchange agreement with the UAE in place. This needs to be confirmed with the Ministry of Finance rather than assumed.
Is CbCR the same as transfer pricing documentation?
No. CbCR is a single, high-level, jurisdiction-by-jurisdiction report required only above the AED 3.15 billion threshold. Transfer pricing documentation (Master File and Local File) is a separate, more detailed set of requirements that applies at a lower revenue threshold and covers specific related-party transactions.
Who within a UAE entity is responsible for the CbCR notification?
Legal responsibility sits with the UAE tax resident entity itself, though in practice this is usually handled by the group’s finance or tax function centrally to keep notifications consistent across every jurisdiction the group operates in.
Does CbCR apply to UAE free zone companies?
Yes, if the free zone entity is part of an MNE Group that meets the AED 3.15 billion consolidated revenue threshold. Free zone status affects a company’s Corporate Tax rate treatment as a Qualifying Free Zone Person, but it does not exempt it from CbCR notification obligations if it is UAE tax resident and part of an in-scope group.
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How Tax Consultant Dubai Can Help
CbCR deadlines are unforgiving because the notification falls due on the last day of the financial year itself, before year-end accounts are even finalised. We help multinational groups confirm scope against the AED 3.15 billion threshold, identify the correct Reporting Entity, and manage notification and filing deadlines across every UAE entity in the group, alongside the group’s wider transfer pricing documentation.
Contact Tax Consultant Dubai today to confirm your group’s CbCR obligations and filing deadlines.
