On September 19, 2023, the Egyptian Tax Authority issued the Explanatory Transfer Pricing Instruction No. 78 of 2023, which clarifies the Transfer Pricing provisions contained in the Unified Tax Procedure Law No. 206 of 2020.
This Instruction aims to address common Transfer Pricing queries regarding Local Reports, dividends, payments on account of related parties, and Master File declaration obligations for ultimate parent entities registered in free trade zones.
Background
In October 2020, the Egyptian Parliament issued the Unified Tax Procedure Law No. 206, which included Articles 12 and 13 related to Transfer Pricing. Subsequently, in December 2020, the Egyptian Parliament issued Law No. 211 of 2020, amending Article 13 of the Unified Tax Procedure Law No. 206 to include penalty provisions.
In June 2021, the Ministry of Finance issued Ministerial Decree No. 286 of 2021 for the Executive Regulations of the Unified Tax Procedure Law No. 206 to facilitate its implementation. This Decree established detailed Transfer Pricing rules and procedures.
Content
In the issued Instruction, the Egyptian Tax Authority answers some of the queries regarding Local Reports and Master File declarations. Taxpayers should plan the preparation and filing of the Transfer Pricing documentation well in advance to meet the stipulated deadlines.
Considering this, the Explanatory Transfer Pricing Instruction No. 78 of 2023 allows to assist taxpayers in complying with the Transfer Pricing documentation requirements.
Source: International Tax Review
