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GCC: E-Invoicing: Beyond VAT, what about Transfer Pricing?

Over the last few years, we have witnessed governments in the Middle East (ME) region rapidly introduce a number of tax reform measures. The Transfer Pricing (TP) regulations were introduced in key jurisdictions like the Kingdom of Saudi Arabia (KSA), the State of Qatar (Qatar) and the Hashemite Kingdom  of Jordan (Jordan) TP regulations have also been updated in the Arab Republic of Egypt.

Value Added Tax (VAT) was introduced and reformed in Egypt, the KSA, the United Arab Emirates (UAE), the Kingdom of Bahrain (Bahrain), Jordan and the Sultanate of Oman (Oman). While all the stakeholders, including tax administrations, taxpayers, and tax advisors, digest and adapt to these changes, there is
another crucial change: The Electronic Invoicing (e-Invoicing) system.

In simple words, the e-Invoicing system is a procedure that aims to transform the manual process of issuing (paper) invoices into an electronic process that allows the exchange of invoices, debit and credit notes and processing of them in an organized electronic format between sellers and buyers.
However, is the e-Invoicing phenomenon currently being witnessed a pure VAT related issue or are there important TP considerations? Is there an impact of the transparency caused by e-Invoicing? In this article, we analyze the impact of e-Invoicing on TP related matters and some important points to be aware of while preparing for e-Invoicing. This article mainly focuses on KSA VAT, e-Invoicing and TP regulations introduced by the Zakat, Tax and Customs Authority or “ZATCA”, with some references to other Middle East jurisdictions.

Source Deloitte


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