Transfer Pricing in the GCC

What

The member states of the Gulf Cooperation Council (“GCC”) have witnessed significant developments in the taxation sector. The GCC member countries are increasing their focus on TP. While certain GCC countries have recently enacted TP Rules and TP documentation requirements, certain other GCC countries have amended the existing TP regulations.

This indicates that GCC countries are increasingly committed to scrutinizing the TP policies and the TP documentation of their GCC business entities. We have provided below an overview of the prevailing TP regulations in every GCC country.

* These requirements are as per the latest Public Consultation document and the final law is awaited

Overview of TP compliance and documentation requirements

QATAR

Applicability

• Entities resident and foreign entities with a permanent establishment in Qatar meeting the specified threshold

Requirement

• Master File
• Local File
• TP Declaration

Recent Changes - None

SAUDI ARABIA

Applicability

• Corporate income-tax payers having controlled transactions with an arm’s length value of more than SAR 6mn

Requirements

• Master File
• Local File
• Disclosure Form
• Certification by a licensed auditor

Recent Changes 

• Amendments proposing to extend the applicability of TP to Zakat payers with related party transactions

UAE

Applicability

• UAE business having transactions or arrangements with related parties

Requirement

• Master File
• Local File
• Disclosure Form

Recent Changes

• Awaiting final Corporate Tax law incorporating TP provisions

Key Takeaways

With increased focus on TP in the GCC region, the GCC businesses are required to ensure that they have a robust TP policy set up for their intra-group transactions and also comply with TP compliance requirements including the completion of a Local and a Master File.

Robust documentation For the Zakat payers in the KSA

Additionally, with the recent proposed amendments to the TP regulations in the KSA, the Zakat payers in the KSA must have robust documentation and appropriate benchmarking of inter-group transactions to comply with the TP regulations in the KSA.