November 6, 2018
From Egypt: Egypt Issues New Transfer Pricing (TP) Guidelines
The Egyptian Ministry of Finance has issued a new decree 547 dated October 21, 2018, that includes the newly updated transfer pricing guidelines which replace the old guidelines issued in 2010.
The new guidelines will be the base for Egyptian Tax Authority (ETA) to rely on when assessing the arm’s length of financial or controlled commercial transactions which occur between associated enterprises (any person related to a taxpayer in a way that affects the determination of the tax base).
It is worth mentioning that it is not allowed to follow the new transfer pricing guidelines unless it was requested by the taxpayer and accepted by the head of the ETA.
After Egypt became an associate member of Base Erosion & Profit Shifting (BEPS), certain amendments in Egyptian tax legislation were supposed to follow in order to match with the new BEPS four minimum standards of actions including Action 5 (Harmful Tax Practices), Action 6 (Treaty Abuse), Action 13 (Country by Country Reporting) and Action 14 (Dispute Resolution).
Accordingly, the new transfer pricing guidelines were issued to cover the BEPS four minimum actions requirements.
The new guidelines reflect changes made in the Organization for Economic Cooperation and Development (OECD) as a main source to rely on and to facilitate the implementation of BEPS actions especially Country by Country Reporting (CbCR).
The following topics represent the major updates:
- Three-tiered TP Documentation
- TP Documentation Deadline
- New Comparability Analysis Conditions
- Introducing Advance Pricing Agreement (APA)
For more details and related tax risk, please click here.