Are exclusive distributors subject to new transfer pricing rules in KSA?

Summary document on main impacts and requirements

The General Authority for Zakat and Tax (GAZT) has recently released their final Transfer Pricing (TP) bylaws. Following this major tax development, we have created a summary document with our initial set of views surrounding the applicability of the TP regulations in respect of exclusive distributorship arrangements in Saudi Arabia.

Throughout the document, Deloitte TP experts have provided their insight on key requirements and areas impacting exclusive distributors as listed below:

  • New Kingdom of Saudi Arabia (KSA) TP rules and compliance requirements
  • Effective control test in respect of exclusive distributorship arrangements:

- Exclusivity of arrangements
- Dependent agency relationships

  • Deloitte recommendation on managing impacts on businesses

The bylaws apply to all taxpayers (i.e.“taxable persons”) and cover any transaction between related persons or persons under common control. It is therefore crucial for businesses to understand these rules and their impacts on exclusive distributors.

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