Worldwide transfer pricing reference guide 2014

Egypt (continued)
Transfer pricing penalties (continued)
• 5% of the tax payable on the non-included amount, if such amount is between 10% and 20% of the legally payable tax
• 15% of the tax payable on the non-included amount, if such amount is between 20% and 50% of the legally payable tax
• 80% of the tax payable on the non-included amount, if such amount is more than 50% of the legally payable tax
Penalty relief
There is currently no specific penalty related to transfer pricing; however, any adjustments based on related party transactions which
cannot be defended due to the absence of a transfer pricing study or sufficient supporting documents will be subject to the normal
penalties and interest mentioned in the ITL.
Documentation requirements
The Egyptian transfer pricing rules place the burden of proof on the ETA, provided that the taxpayer can produce sufficient transfer
pricing documentation (and other supporting documents, including intercompany agreements, schedules, and invoices) to support its
declared transactions on the tax return. According to the rules, however, the burden of proof shifts to the taxpayer in the event that the
tax return is not filed, or the taxpayer fails to produce proper transfer pricing documentation to support its tax return positions.
The transfer pricing documentation need not be submitted with the tax return, but should be available at short notice if requested by
the ETA.
Documentation deadlines
Taxpayers are obliged to prepare transfer pricing reports beginning with fiscal year 2010. However, they do not need to submit
the transfer pricing study with the annual tax return. The transfer pricing report will be required during the inspection process.
From 2010 onward, Egyptian transfer pricing documentation is required to be contemporaneous with the tax return. Egyptian tax returns
are filed four months following the year end of the company’s fiscal year. Companies are allowed to file for a two month extension.
Hence, at the latest, transfer pricing documentation should be completed by June for companies with year ending in December (and in
principal by end of April) to be contemporaneous.
Statute of limitations on transfer pricing assessments
The statute of limitations is five years.
Return disclosures/related party disclosures
The corporate tax return, in the related party disclosure section, requires taxpayers to provide the following information:
• Name of the related party/parties, along with the group structure
• The nature of the relationship
• Type of the related parties transactions, if any
• The value of the transactions
• The method used to determine the FMP and the reasons for selecting this method
• The country of origin for tangible and intangible goods
• The country of the supplier
Transfer pricing-specific returns
There are no separate returns to be filed for transfer pricing. However, disclosure of related party transactions is required in the
corporate tax return.
Worldwide transfer pricing reference guide
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