As part of the immense change many businesses operating in the Middle East are currently going through, the need to identify intercompany transactions where Customs related issues arise has become been paramount more recently.
In assessing valuations for Customs purposes in new supply chains, it has been critical for businesses to also ensure that the substance of new arrangements is set up on an Arm’s Length basis and are defendable from a direct tax perspective where relevant.
It is clear from discussions with the Tax Authorities (TAs) and recent audits, that the interaction between Transfer Pricing and Customs is becoming an increased area of focus as TAs seek to implement a more cohesive approach to risk assessment and audit.
But how does one harmonize the Arm's Length Principle with Customs requirements? Is there an avenue to mitigate apparently the conflicting and contradicting legislative mechanisms? If so, how should this be implemented, and what discussions need to be had with the authorities about the decisions taken in this regard, if any?
In light of the above, Deloitte hosted a 60-minute webinar on Wednesday, 24 November 2021 where our experts discussed how Transfer Pricing and Customs valuation is becoming an increased area of focus, as well as how taxpayers in the Middle East can strike a balance between the contradicting legislative mechanisms.