On 20 March 2023, Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) approved Decision No. 8-2-23 to amend the Transfer Pricing (TP) Bylaws. The approved amendments to the TP Bylaws in Saudi Arabia will expand the scope of the provisions to cover Zakat payers and establish an advance pricing agreement (APA) program for both Taxpayers and Zakat payers. Starting from 1 January 2024, the TP Bylaws will be applicable to both taxpayers and Zakat payers.
Zakat payers must submit a TP disclosure form and TP affidavit when submitting their Zakat returns. Moreover, they are obligated to prepare a local file and master file in accordance with the following thresholds:
The 1st phase: From fiscal year 2024 until fiscal year 2026
| Value of related parties’ transactions | Compliance with local file and master file |
| Equal or less than SAR 48 million | Not Applicable |
| More than SAR 48 million and less than SAR 100 million | Optional |
| Equal or more than SAR 100 million | Mandatory |
Note: During the 1st phase, investment funds are exempted.
The 2nd phase: From fiscal year 2027 onwards
| Value of related parties’ transactions | Compliance with local file and master file |
| Equal or less than SAR 48 million | Not Applicable |
| More than SAR 48 million | Mandatory |
