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Egyptian firms continue to see the importance of international expansion as a key driver for future growth, in line with Egypt’s overarching ambitions to bolster exports.

With transfer pricing principles becoming increasingly important as start-ups expand, we explain the salient points and how to meet the challenges

Effective 22 February 2024, Egypt's Unified Tax Procedures Law (UTPL) has undergone some changes, particularly in Article 12, which pertains to transfer pricing compliance by increasing the materiality threshold. Key changes • Easing of Master File and Local File requirements: Previously, any taxpayer engaging in related party transactions exceeding EGP 8 million was obligated to prepare and submit a Master File and Local File. • Increased materiality threshold: The revised law has raised this threshold to EGP 15 million. This means that taxpayers with related party transactions totaling less than EGP 15 million in a taxable year are now exempt from the burdensome task of preparing and submitting these transfer pricing documents. Implications for taxpayers This amendment offers significant relief to small and medium-sized enterprises (SMEs) operating in Egypt. By increasing the materiality threshold, the Egyptian tax authorities have recognized the administrative burden associated with transfer pricing compliance and have sought to streamline the process for taxpayers with relatively low levels of related party transactions. It is important to note that while the threshold for preparing Master Files and Local Files has been increased, taxpayers must still comply with other transfer pricing obligations, such as documentation requirements and transfer pricing analysis.

Breaking down the transfer pricing audit process in Egypt

We plot out how to plan, prepare and navigate the newly established automated audit process

Plotting out the supporting evidence that must be kept on hand for potential queries raised by the Egyptian Tax Authority at times of audit

The rationale and basics of implementing mechanisms for the correct administration of central/intra-group service charges

Our transfer pricing partners break down new guidance on transfer pricing rules issued by Egypt

Looking at key considerations for companies when it comes to transfer pricing risk assessment.

Examining the Egyptian tax authorities’ transfer pricing risk assessment criteria

Our transfer pricing partner looks at key considerations for companies when it comes to transfer pricing risk assessment.

We explain what information local tax teams need to collate for documentation purposes, and how, as audits become more likely and increasingly stringent.

Our tax experts break down the key changes under Egypt's newly issued VAT reforms for non-resident suppliers for e-commerce transactions