On 10 December 2018, the General Authority of Zakat and Tax (“GAZT”) in the Kingdom of Saudi Arabia (“KSA”) published its draft Transfer Pricing By-Laws (“the draft By-Laws”).
This is the first time that transfer pricing (TP) regulations of any kind have been published by the GAZT and demonstrates the KSA’s commitment to introducing TP rules and implementing the Organisation of Economic Development’s (“OECD”) Base Erosion and Profit Shifting (“BEPS”) recommendations on TP. Specifically, the draft By-Laws introduce requirements for the OECD’s three-tiers of documentation, namely Master File, Local File and Country-by-Country report, as well as an annual Disclosure Form for controlled transactions.
This news alert highlights the key points which taxpayers should be aware of from the draft By-Laws. A detailed news alert will be published shortly providing more in-depth analysis of the proposed rules. A link to the draft By-Laws can be found here.
Whilst still in draft, this publication is a landmark moment in the implementation of transfer pricing rules in the KSA. Given the wide application of the rules as currently drafted, taxpayers are recommended to take a detailed look at their business operations to identify transfer pricing risks and ensure they can comply with the upcoming requirements. The GAZT has invited public comment on the draft By-Laws to be received no later than 9 January 2019.
Middle East Tax & Legal Services Leader, PwC Middle East
Tel: +966 56 704 9675