Amendments to Transfer Pricing Bylaws in KSA

The Board of Directors of ZATCA (the Zakat, Tax, and Customs Authority) in Saudi Arabia has approved significant changes to transfer pricing rules, effective January 1, 2024:

🔹 Extension of Transfer Pricing (TP) Provisions to Zakat Payers:

From FY 2024, Zakat-paying entities must comply with TP regulations, including submitting a TP disclosure form, TP Affidavit, and preparing a Local and Master File with specific exemptions.

🔹Introduction of Advance Pricing Agreements (APA) Provisions:

ZATCA will launch an APA program for both taxpayers and Zakat payers, offering audit protection and reduced compliance requirements.

Key Highlights:

For Zakat Payers:

📄TP provisions now apply, requiring compliance documentation.
🔍Exemptions during Phase 1 and Phase 2 based on transaction thresholds.
💼Investment Funds exempt during Phase 1.

For APA Provisions:

🛡️APAs provide audit protection and reduce compliance burdens.
💰APAs offer benefits such as eliminating TP audit risk and reducing compliance costs.
📅Further guidance on the APA program is expected later this year.

📢 Stay Informed: Make sure your organization is prepared for these changes. Consult with our advisor and visit the ZATCA website for more details.