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 GAZT Publishes Transfer Pricing Bylaws for Public Consultation

The General Authority for Zakat and Tax (“GAZT”) has announced the implementation of Transfer Pricing in the Kingdom based on international standards and tax policies. 

The Kingdom is committed to the Base Erosion and Profit Shifting (“BEPS”) project initiated by the Organization for Economic Co-operation and Development (OECD) and the G-20. The BEPS project consists of 15 actions that form the basis of rules and guidelines that countries should implement domestically to counter certain corporate income tax practices.  

In further alignment of the Kingdom’s taxation policies and practices with those of the international tax community, GAZT has prepared comprehensive transfer pricing bylaws (“TP Bylaws”). Through the TP Bylaws, procedures and measures are established to ensure that transactions between related persons and between persons under common control are priced on an arm’s-length basis. The TP Bylaws center around the basic principle of transfer pricing; namely that for purposes of preserving the corporate income tax base, prices of transactions between related persons and persons under common control should be similar to transaction prices between independent parties.  

The development of transfer pricing regime in the Kingdom is a strategic project GAZT is currently implementing. Its objective is to further increase businesses compliance and transparency. This will in turn also have a positive effect on the investment environment through implementation of best international tax practices. 

GAZT has published the draft TP Bylaws for public consultation. GAZT believes that the input of the public, particularly those most affected by the TP Bylaws, is essential in the development process of the TP Bylaws. All persons wishing to provide input or comments on the TP Bylaws may do so before 3 Jumada Al Awwal 1440 corresponding to 9 January 2019. 

The TP Bylaws are available at this link and feedback can be submitted via email to  

10 December 2018
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Last Update: 30 Sep 2020 02:28 AM Saudi Arabia Time