On 1 September 2021, the General Commissioner published a ruling and set a threshold for the preparation and submission of transfer pricing documentation. The ruling is effective retroactively from 1 July 2019 (2020 tax year). According to the ruling, the taxpayer is exempt from the obligation to prepare and submit transfer pricing documentation if the “cumulative arm’s length value” of the transactions with related parties does not exceed 5 million BWP in a tax year.
The following two-step approach to determining if the exemption applies to a given tax year:
I. Determine the aggregate arm’s length of transactions with related parties; and
II. If the total value is less than 5 million BWP, there is no obligation to create TP documentation; or if the total value exceeds 5 million BWP, prepare the TP documentation and submit it with the annual corporate tax return.
