Saudi draft transfer pricing bylaws a landmark moment: PwC

The recent publication of the draft Transfer Pricing (TP) bylaws by Saudi Arabia’s General Authority of Zakat and Tax (GAZT) is a landmark moment in the development of tax law in the Kingdom, PwC said in a recent report.

“Whilst still in draft, this publication is a landmark moment in the development of tax law in the KSA. They reflect a positive approach to transfer pricing by the GAZT, consistent with Organization of Economic Development (OECD) principles and in our view represent a fair and transparent step toward the implementation of TP rules,” noted a statement on PwC Middle East’s website.

PwC said this is the first time that TP regulations of any kind have been published by the GAZT and demonstrates the Kingdom’s commitment to introducing TP rules and implementing the OECD’s Base Erosion and Profit Shifting 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,” the report added.

PwC said there are some areas where further clarification is needed, but this is to be expected given this is a first-draft document.

In this respect, the GAZT has invited public comment on the draft bylaws to be received no later than  January 9, 2019.