Worldwide transfer pricing reference guide 2014

Egypt (continued)
Frequency of tax audit and transfer pricing scrutiny by the tax authority
Transfer pricing is now part of the general corporate tax return audit. The Republic of Egypt indicated in its annual general budget —
Taxation Chapter, that transfer pricing adjustments are a major and priority source of tax income to the country. Hence, the ETA has
started paying extra attention to related party transactions during the corporate tax inspection from financial year 2005 onwards.
During the assessment, the ETA demands documents to support intercompany pricing.
Taxpayers who will provide sufficient documentation proving that they exerted efforts to establish transfer prices that comply with the
arm’s length principle, are likely to be assigned by the ETA a low tax risk rating. However, taxpayers giving inadequate consideration to
their transfer pricing practices will be assigned a high risk rating.
Taxpayers with high perceived risk are more likely to be audited by the ETA than those perceived to have low risk.
The ETA intends to issue periodic clarifications in connection with the transfer pricing issues that might arise from its practical
experience.
APA opportunity
APAs are available in Egypt, but none have been concluded to date.
Expected reaction to OECD Report on BEPS
Up until January 2014, the Egyptian tax authority has not issued any written document related to the BEPS project of the OECD.
Worldwide transfer pricing reference guide
95