On December 6, 2017, the Council of Ministers has approved the first Transfer Pricing (TP) Regulations by Decree 70/2017. The Decree became in force on or after the January 1, 2018.
According to Decree, one company is considered to be related to another if the company; is directly or indirectly (i) controlled, controlled or jointly controlled by the same entity, (ii) has an interest in the entity that has significant influence, or (iii) has joint control over the entity; is an associated company or has a joint venture of the other company; is a member of the management of the other institution or its headquarters; or manages a post-employment benefit for the employees of the other company.
The regulations recognize the comparable uncontrolled price, the resale price method, the cost-plus method, the profit-split method, the transactional net margin method and any other method deemed appropriate based on the circumstances of the transaction. Taxpayers are required to prepare the transfer pricing documentation if annual net sales (including sales and other revenue) in the previous tax year under the terms specified therein exceed 2,500,000 MT (approximately $ 40,000).
