Benchmarking in the GCC

As GCC countries such as the UAE, Saudi Arabia, and Oman integrate Transfer Pricing into their tax systems, benchmarking has become a critical yet challenging aspect of compliance due to limited availability of local comparable data. In the absence of sufficient public financial information-given the dominance of private, family-owned businesses-taxpayers often rely on global databases for comparables, which raises issues of economic relevance, market alignment, and defensibility. Differences in market conditions, risk profiles, and inflation between regions make global benchmarks imperfect, though still necessary until robust regional datasets emerge. Encouragingly, transparency is improving through government disclosures, regional data pooling, and internal benchmarking practices. The UAE's Federal Tax Authority accepts foreign comparables if taxpayers can justify their selection and adjustments with sound reasoning and consistency. Ultimately, benchmarking in the GCC is evolving from a mechanical data exercise to a more qualitative, judgment-driven process, with growing emphasis on regional collaboration and contextual analysis to ensure defensible arm's length outcomes.

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