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ZATCA Transfer Pricing · TP Documentation · OECD Aligned

Transfer Pricing Saudi Arabia

ZATCA-aligned transfer pricing documentation, benchmarking, and advisory for Saudi businesses with related-party transactions.

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Transfer pricing documentation Saudi Arabia
ZATCA Transfer Pricing
Saudi Arabia implemented formal Transfer Pricing (TP) regulations effective from 2019, aligned with the OECD's Base Erosion and Profit Shifting (BEPS) framework. The regulations require Saudi entities that engage in transactions with related parties — including parent companies, subsidiaries, affiliates, and group companies — to ensure those transactions are priced on an arm's length basis and to maintain mandatory TP documentation.

ZATCA has significantly expanded its TP audit capability since 2021. Entities with annual related-party transactions above SAR 100 million are required to submit a Master File and Local File with their tax return. Country-by-Country Reporting (CbCR) applies to multinational groups with global revenues above SAR 3.2 billion. Penalties for TP non-documentation start at 5% of the transaction value. Intelli Solutions provides complete TP documentation and advisory services tailored to ZATCA's specific requirements.

ZATCA Transfer Pricing Documentation Requirements

Master File

Threshold: SAR 100M+ related-party transactions

The Master File provides a high-level overview of the multinational group — organisational structure, business lines, intangibles, intercompany financing, and global TP policies. Submitted to ZATCA annually within 12 months of year-end.

Local File

Threshold: SAR 100M+ related-party transactions

The Local File provides entity-specific TP analysis — details of each controlled transaction, the TP method applied, benchmarking analysis, and financial data supporting the arm's length price. Prepared annually and kept on file for ZATCA audit.

Country-by-Country Report (CbCR)

Threshold: Global group revenues ≥ SAR 3.2 billion

CbCR requires disclosure of revenue, profit/loss, tax paid, employees, and assets for each jurisdiction where the group operates. Filed with ZATCA within 12 months of the parent entity's year-end.

Advance Pricing Agreement (APA)

Available for: Complex or high-value transactions

APAs allow businesses to agree TP methodology with ZATCA in advance — providing certainty and eliminating audit risk for the agreed period. We prepare APA applications for qualifying transactions.

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Why Choose Us

  • SOCPA Registered Audit Firm
  • ZATCA Certified Practitioners
  • 15+ Years in Saudi Arabia
  • 500+ Saudi Clients Served
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By the numbers

Transfer Pricing Saudi Arabia — Key Facts

SAR 100M
TP documentation threshold
5%–20%
Penalty on transaction value
SAR 3.2B
CbCR revenue threshold
50+
OECD-comparable countries
FAQ

Frequently Asked Questions — Transfer Pricing Saudi Arabia

The arm's length principle requires that prices charged between related parties must equal what unrelated parties would charge in comparable transactions under similar circumstances. ZATCA accepts five TP methods aligned with OECD guidelines: Comparable Uncontrolled Price (CUP), Cost Plus, Resale Minus, Transactional Net Margin Method (TNMM), and Profit Split. The most appropriate method depends on the nature of the transaction and available comparable data.
TP rules apply to all transactions between related parties — including sale of goods, provision of services, licensing of intellectual property, provision of loans and guarantees, cost-sharing arrangements, and commission arrangements. ZATCA's definition of 'related parties' is broad and includes entities with 25%+ common ownership, directors in common, and entities with commercial relationships that give one control over the other.
ZATCA's TP penalties include: 5%–20% of the value of a controlled transaction where documentation is not prepared; 5%–25% of any tax shortfall from a TP adjustment; and penalties for late submission of CbCR notifications and reports. ZATCA can also reallocate income between related parties if it determines the intercompany pricing is not arm's length, increasing the taxable income in Saudi Arabia.
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Does Your Business Have Related-Party Transactions?

Our TP specialists prepare ZATCA-compliant Master Files, Local Files, and benchmarking studies. Free initial scoping call.

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