Saudi Arabia amends Transfer Pricing bylaws

May 2, 20230

On April 7, 2023, the Board of Directors of the Zakat, Tax and Customs Authority (ZATCA) approved changes to the transfer pricing bylaws, effective from 1 January 2024, for financial years beginning on or after that date.  

These changes will extend the applicability of Transfer Pricing bylaws to Zakat payers, introduce advance pricing agreement (APA) provisions, and establish compliance requirements.

APA Provisions 

Under the APA program, MNEs can obtain an agreement with tax authorities, similar to a Tax Ruling, that offers audit protection and a reduction in compliance requirements for their Transfer Pricing arrangements for several years. ZATCA is anticipated to release more information on the APA program later this year, including instructions on how firms can apply, the fees for application and filing, and the anticipated duration of the negotiation process.

Compliance Requirements 

Zakat payers will be required to disclose related-party transactions in a Transfer Pricing disclosure form, submit an affidavit with their Zakat declarations, and prepare additional documentation, such as Master file and Local file, subject to specified thresholds.  

The implementation of the above-mentioned transfer pricing bylaws will occur in two stages: 

Implementation Stages 


Less than 48M SAR 

More than 48M SAR 

More than 100M SAR 

Stage 1 

1 January 2024 

Not applicable  Voluntary 


Stage 2 

1 January 2027 

Not applicable  Mandatory 



Investment funds will be excluded from Stage 1 but will be included in Stage 2, which will begin from FY 2027 onwards. 

For further consultation on Saudi Arabia’s Transfer Pricing regulations, please contact us.


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