Transfer Pricing

Transfer Pricing in GCC

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  3. Transfer Pricing in GCC

Chapter 3

Transfer Pricing in GCC

Tax dynamics in GCC countries have significantly changed in the last decade due to economic challenges. The topic of TP has gained significant momentum over the past few years, especially after the GCC countries in the region (except Kuwait) have joined the Base Erosion and Profit Shifting (BEPS) framework.

Saudi Arabia                                      

CbCR since 2018

  • Maintain Local File & Master File                         
  • TP disclosure in the Tax Return     

Qatar

 CbCR since 2018

  • Local file & Master File to be submitted
  • TP disclosure in the Tax Return

 

Oman                                                

 

CbCR since 2020 


  • TP Documentation Recommended
  • Reference of Related Party Pricing in the IT Law

 

Bahrain

 

CbCR since 2021 Regulations

 

Kuwait                                              

 

CbCR – NA

                      

  • Documentation of Contracts with Related Party to be maintained.
  • Deemed Profits in Specified Range of 1%.

UAE

 

CbCR since 2019

 

TP regulations from June 1, 2023

 


Further, a detailed analysis of TP Regulations in each of the GCC countries is tabulated hereunder: ?

CountryApplicabilityPermissible Pricing MethodsDocumentationAdvanced ruling or Pricing AgreementsPenalties for non-compliance
KSAAll juridical persons, including mixed companiesAs per the OECD GuidelinesThe controlled transaction disclosure form
General documentation
Maintain - Local and Master file		PermissibleAs per IT Law
QatarTransactions between a Qatar resident entity and an unrelated foreign entity if in a preferential tax regime or residing in a cooperativenon-cooperativecountry.Preferred CUP method Alternatively, as per the OECD GuidelinesTP declaration be submitted along with the annual income tax return Submission of Local and Master filePermissibleAs per IT Law
OmanMeasures of Related party Transaction through IT Law, no specific TP RegulationNo specific mention.The OECD Guidelines RecommendedNo specific Regulations Recommend maintaining Documents to be made available on requestPermissibleImposed
BahrainNo TP
Regulations or measures to monitor related party transactions		NA, as no TP RegimeNA, as no TP RegimeNA, as no TP RegimeNA, as no TP Regime
KuwaitTransactions between domestic and a foreign entityCovered Transactions to be as Arm’s Length PriceDeclared costs and expenses from the head office or related parties must be fully documented for the tax inspection. Except in cases where a tax the treaty applies, deemedNANA

* Indicated in Public Consultation Document

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