Egypt Transfer Pricing (تسعير المعاملات بين الشركات المرتبطة)

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Jurisdiction is required. Set jurisdiction: EG in frontmatter even when the folder path implies it. Sync to openaccountants.com skips files without a resolvable jurisdiction.

This skill covers Egyptian transfer pricing (TP) compliance for resident companies, permanent establishments of non-residents, and Egyptian-parented MNE groups. Egypt was the first country in the Middle East to introduce TP legislation (Article 30, Income Tax Law No. 91 of 2005). The framework is OECD-aligned, following BEPS Action 13's three-tier documentation model. The AI must reply in the user's language (English or Arabic / Egyptian Arabic) and may use the native tax terms shown throughout.

Currency note: all figures are in Egyptian Pounds (EGP / ج.م). YMYL — verify before relying. Egyptian TP guidelines, thresholds, and penalty rates are subject to amendment (most recently Laws 5, 6, 7 of 2025). Where this skill says "verify current value," re-confirm against the Egyptian Tax Authority (ETA — eta.gov.eg), PwC Worldwide Tax Summaries (taxsummaries.pwc.com/egypt), or a Big-4 alert before filing.

Section 1 — Quick Reference

Field	Value
Country	Egypt (جمهورية مصر العربية)
Tax authority	Egyptian Tax Authority (ETA — مصلحة الضرائب المصرية, eta.gov.eg)
Primary TP legislation	Article 30, Income Tax Law No. 91 of 2005 (قانون الضريبة على الدخل)
Executive Regulations	Articles 38, 39, 40 of the Executive Regulations of Law 91/2005
TP Guidelines	Egyptian Transfer Pricing Guidelines, Ministerial Decree No. 547 of 2018 (circulating as the ETA TP circulars)
Related-party definition	Article 1, Executive Regulations of Unified Tax Procedures Law No. 206 of 2020 (amended by Law No. 211 of 2020)
APA basis	Ministerial Decree No. 221 of 2018 (amended Art 30 ITL); bilateral/multilateral available
OECD member?	No
BEPS Inclusive Framework?	Yes (member)
OECD TPG adoption	Egyptian TPG modeled on OECD TPG (2017 ed., acknowledged as global standard)
Currency	EGP (ج.م)
Documentation language	Arabic; English accepted for MNE groups with non-Arabic parents
Skill version	0.1

|---| | Law 91/2005 Art 30 | Arm's length principle applied to transactions between related parties — commercial, financial, goods, services, cost contributions, royalties, interest, other commercial/financial transactions | | Law 91/2005 Executive Regs Art 38 | Related-party scope; application of arm's length principle | | Law 91/2005 Executive Regs Art 39 | Recognised TP methods (CUP, RPM, CPM, TNMM, PSM); other appropriate methods permitted with supporting documentation | | Law 91/2005 Executive Regs Art 40 | Documentation requirements; comparability analysis; documentation retention | | Ministerial Decree 547/2018 | Egyptian Transfer Pricing Guidelines — a guide to the application of Art 30 of Law 91/2005 (modeled on OECD TPG 2017) | | Ministerial Decree 221/2018 | Amendments to Art 30 ITL — added TNMM and PSM as permissible methods; authorised APAs; authorised ETA guidance on documentation | | Unified Tax Procedures Law 206/2020 Art 1 | Related-party definition (replaces prior definitions in scattered regs) | | Law 91/2005 Arts 24, 52, 56 | Non-TP rules relevant to related-party transactions: interest deductibility (Art 24 — interest on loans exceeding 2× CBE rate non-deductible), thin-cap interaction, Art 56 WHT on payments to non-residents at 20% |

2.2 Arm's Length Principle

Article 30 of Law 91/2005 applies the arm's length principle: where a transaction between related parties is not at arm's length, the ETA may adjust taxable profit to reflect what independent parties would have agreed. The 2018 Decree expanded the scope to explicitly include commercial and financial transactions for goods, services, cost contribution allocations, royalties, interest, and other commercial/financial transactions.

2.3 Related Party Definition (Law 206/2020 Art 1)

Related parties exist where the relationship affects, directly or indirectly (through management, control, or ownership), the determination of the tax base. Two persons are related where one or both can make dispositions according to the directions, requests, proposals, or will of the other or a third party. Specifically:

1. Husband, wife, ascendants, descendants, or inter se
2. Partnerships, general partners, and limited partners therein
3. Companies and the person who owns, directly or indirectly, at least 50% of the voting rights, management, dividends, or capital rights
4. Two or more companies in which another person owns or acquired at least 50% of voting rights, management, or dividends/capital rights

Note. Ownership attributed by a related party may not be reassigned to another. Employees/clients are not related parties solely by virtue of that relationship unless it affects the tax base.

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Section 3 — Documentation Requirements

Egypt follows the OECD BEPS Action 13 three-tier documentation model.

3.1 Documentation Threshold

Item	Detail
Master File + Local File required	Aggregated annual related-party transactions > EGP 15 million
Below threshold	Arm's length pricing must still be substantiated; TP policy/strategy recommended but documentation not mandatory
Individual transaction records	Maintain records of material controlled transactions (> EGP 1m individually as a practical benchmark; no statutory individual threshold)

Threshold verification. The EGP 15m threshold is the widely-cited figure in professional practice (Andersen 2025, ETA guidance). Earlier sources cited EGP 8m; verify current threshold against ETA before filing — the threshold may have been amended by Laws 5, 6, 7 of 2025.

3.2 Master File

Item	Detail
Required?	Yes, where EGP 15m threshold met
Format	OECD-aligned per BEPS Action 13
Content	Group organisational structure; description of business; intangibles ownership and strategy; intercompany financial activities; consolidated financial and tax positions
Filing	Filed with ETA — align with ultimate parent's Master File filing date in its home jurisdiction
Language	Arabic; English accepted for non-Arabic parent groups
Size	No statutory MB cap; ETA may set practical limits

3.3 Local File

Item	Detail
Required?	Yes, where EGP 15m threshold met
Format	OECD-aligned; entity-specific analysis of material transactions
Content	Local entity business description; FAR analysis (functions, assets, risks); controlled transaction descriptions; method selection; comparability analysis and benchmarking; financial data
Filing	Due within two months of filing the CIT return
Revised return interaction	If a revised CIT return is filed within 30 days, Local File deadline resets to two months from the new submission date
Comparables preference	Egyptian comparables searched first; then Middle Eastern/African regional; then global (per Egyptian TPG §5.7.3.1)

3.4 Country-by-Country Report (CbCR)

Item	Detail
Egyptian-parent threshold	MNE groups with consolidated group revenue ≥ EGP 3 billion (≈ EUR 750m; aligned with OECD CbCR threshold)
Non-Egyptian-parent threshold	OECD EUR 750m applies; Egyptian subsidiaries must file CbCR Notification in each tax year
Surrogate filing	Egyptian subsidiary may be required to file locally if the parent's jurisdiction does not require CbCR, does not have automatic exchange with Egypt, or fails to file
Filing deadline	12 months after the last day of the reporting fiscal year of the MNE group
Format	Per BEPS Action 13 / OECD CbC template (Annex III)
Notification	Required for each Egyptian subsidiary of an MNE group meeting the threshold
Effective	From fiscal years beginning on/after 1 January 2018

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Section 4 — Transfer Pricing Methods

4.1 Accepted Methods (Executive Regs Art 39)

Method	Accepted	Best suited for
Comparable Uncontrolled Price (CUP)	Yes	Commodities, standard goods with public prices; must be applied where reliable comparables available
Resale Price Method (RPM)	Yes	Distributors that add limited value to goods purchased from related parties
Cost Plus Method (CPM)	Yes	Manufacturers; service providers; routine back-office functions
Transactional Net Margin Method (TNMM)	Yes	Most common in practice; acceptable for a wide range of transactions
Profit Split Method (PSM)	Yes	Highly integrated operations; unique intangibles; both parties contribute significant value
Other appropriate methods	Yes	Per 2018 Decree — permitted with supporting documentation

4.2 Method Selection

Egypt applies the "most appropriate method" criterion (Egyptian TPG §2.3.2) — not a strict hierarchy. The method most directly producing an arm's length result for the specific transaction must be selected, consistent with OECD TPG Chapter II.

4.3 Comparability Analysis

Requirement	Detail
OECD TPG Chapter III alignment	Yes, Egypt follows the OECD approach
Comparability adjustments	Required where differences between controlled and uncontrolled transactions affect price/margin (Egyptian TPG Chapter 4)
Arm's length range	Permitted; statistical measures (interquartile range) applied where sufficient comparables exist
Domestic vs foreign comparables	Egyptian comparables preferred; regional (Middle East/Africa) secondary; global tertiary (Egyptian TPG §5.7.3.1)
Secret comparables	Not used (confirmed in OECD TP Country Profile — Egypt, 2022)
Commodity transactions	Follows OECD TPG ¶¶2.18-2.22 (Egyptian TPG §4.4.1)

4.4 Intra-Group Services

Field	Detail
Dedicated guidance in Egyptian TPG?	No (OECD TPG consulted for detail)
Low-value-adding services safe harbour?	No
Benefit test	Apply OECD TPG Chapters IV and VII principles — services must provide economic/commercial value; shareholder-type costs generally not chargeable
Charge-out vs cost-only	Both accepted in practice; charge-out (cost + markup) most common for routine shared services; cost-only acceptable where services are duplicative
WHT interaction	Payments to non-resident affiliates subject to Art 56 WHT at 20% (before treaty relief)
Documentation	FAR analysis; benefit test; cost allocation keys; benchmarking of charge-out rates

4.5 Financial Transactions / Thin Capitalisation

Field	Detail
Dedicated TP guidance for financial transactions?	No (OECD TPG consulted)
Thin-cap rule	Law 91/2005 Art 24 — interest on loans exceeding 2× the Central Bank of Egypt (CBE) credit/discount rate at the start of the calendar year is non-deductible
BEPS Action 4 implementation	Not fully implemented; Egypt relies on the Art 24 interest cap
Other financial rules	Art 52 (no deduction of distributions to owners); Art 56 (20% WHT on payments to non-residents)

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Section 5 — Filing Obligations and Deadlines

5.1 Filing Matrix

Obligation	File	Deadline
CIT return	CITR	Within 30 April following the fiscal year-end (standard fiscal year 1 Jan – 31 Dec) unless an extension applies; ETA returns may be filed up to 30 days late with revised return (preserves Local File deadline)
Local File	TP documentation	Within 2 months of filing the CITR (or revised CITR)
Master File	TP documentation	Aligns with the ultimate parent's own Master File filing deadline in its home jurisdiction
CbCR	CbC report	12 months after the last day of the MNE group's reporting fiscal year
CbCR Notification	Notification from Egyptian subsidiaries	Due at the same time as the CIT return for the year in which the MNE group's fiscal year ends

5.2 Retention and Language

Item	Detail
Documentation retention	Retain during the tax statute of limitations (5 years per Unified Tax Procedures Law; longer if audit open)
Language	Arabic; supplementary English accepted for MNE groups
Production on audit	Must be produced on ETA request; failure to produce is a basis for ETA estimation

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Section 6 — Penalties

6.1 Percentage-Based TP Penalties

Egypt's TP penalty regime follows a percentage-of-transaction-value model, capped at 3% of total related-party transactions per year (per Law 206/2020 and ETA practice):

Violation	Penalty Rate
Failure to disclose related-party transactions in the tax return	1% of the transaction value
Failure to submit the Local File	3% of the transaction value
Failure to submit the Master File	3% of the transaction value
Failure to file CbCR or notification	2% of the transaction value
Aggregate cap	3% of total related-party transactions (per year), even if multiple violations occur

6.2 General CIT Late Filing / Late Payment Penalties (Law 91/2005)

Provision	Detail
Late filing penalty	Art 110 CIT Law — 2%/month on tax due, from the day following the legal deadline
Late payment penalty	Art 111 CIT Law — 1.5%/month from the deadline until full payment
TP audit-driven assessments	Adjusted tax follows general CIT penalty rules above, on top of TP percentage penalties in §6.1

6.3 Additional Risks

Risk	Detail
ETA estimation	Without sufficient documentation, the ETA may estimate arm's length prices — the burden shifts to the taxpayer to disprove the estimate
Reassessment window	5 years from filing (or 6 years if fraud); extended by Unified Tax Procedures Law 206/2020 in certain cases
Criminal exposure	Introduced by Law 7/2025 — tax evasion including deliberate mis-statement of related-party prices may attract criminal liability; qualified professional review strongly advised

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Section 7 — Advance Pricing Agreements (APA)

Item	Detail
Availability	Yes — available under Ministerial Decree 221/2018 (amending Art 30 ITL)
Types	Unilateral, bilateral, and multilateral APAs
Administrator	Egyptian Tax Authority (ETA) — competent authority function
Bilateral / multilateral	Available through mutual agreement procedure (MAP) provisions in Egypt's tax treaties (~60 treaties)
Detailed administrative procedure?	No specific APA procedural regulations published; ETA discretion applies
Process in practice	Taxpayer files an APA request with ETA; ETA evaluates the proposed methodology and comparables; for bilateral/multilateral, ETA enters into MAP discussions with the other jurisdiction(s)
Duration	Typically 3-5 years (aligned with OECD practice)
Roll-back	Not explicitly provided for; may be negotiated with ETA on a case-by-case basis
Fees	No statutory fee structure; professional fees apply
Practical use	Limited uptake; advance tax rulings and bilateral negotiations more common in practice

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Section 8 — Safe Harbours and Simplified Approaches

Area	Detail
Low-value-adding services safe harbour	No — full arm's length analysis required; OECD TPG Chapter VII consulted
Interest rate safe harbour	No — thin-cap governed by Art 24 (2× CBE rate) and arm's length principle; no reduced-rate safe harbour
Thin cap	2× CBE credit/discount rate (cost not deductible beyond this) — a deduction cap, not a TP method
CbCR safe harbour	No — full OECD template required
General position	All cross-border and domestic related-party transactions must meet the arm's length standard

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Section 9 — Recent Developments

Date	Development
2005	Law 91/2005 Art 30 enacted — Egypt becomes the first ME country with TP legislation (CUP, RPM, CPM initially)
2010	First Egyptian TP Guidelines issued (closely follow OECD TPG)
May 2018	Ministerial Decree 221/2018 — added TNMM and PSM; authorised APAs; broadened scope of related-party transactions
May 2018	Ministerial Decree 547/2018 — Egyptian Transfer Pricing Guidelines re-issued (modeled on OECD TPG 2017 ed.)
2020	Unified Tax Procedures Law 206/2020 — provided a single definition of related parties, CbCR filing mechanism, TP documentation framework
2022	OECD TP Country Profile — Egypt updated (confirmed the 5 methods, most-appropriate-method rule, no secret comparables)
2022	OECD TPG (January 2022 ed.) — Egypt's TPG should be updated to reflect Actions 8-10 and the 2022 changes; preparation in progress
2025	Laws 5, 6, 7 of 2025 amended CIT — verify thresholds, rates, and penalty interactions before filing
Ongoing	ETA building TP audit capacity; increased audit focus on royalties, management fees, and IP
Ongoing	CbCR used for risk assessment and audit selection; exchange of CbC reports under MCAA

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Section 10 — Interaction with Other Skills

Related skill	Interaction
eg-corporate-tax	TP adjustments directly affect taxable income and CIT liability; adjustments flow through the CITR
eg-withholding-tax	Art 56 WHT at 20% applies to payments to non-resident affiliates (before treaty relief); royalty/interest/fees in scope
eg-income-tax	Related-party transactions affect individual income tax for owners/partners
eg-tax-optimization	TP structuring and APA considerations feed tax planning; document benefits test
eg-financial-statements	TP documentation builds on IFRS / Egyptian Accounting Standards-compliant records
eg-formation	New entities must consider TP policy from formation; related-party agreements should be in place from day one
transfer-pricing-workflow-base	Workflow base for this content skill — controls documentation and formatting
Cross-border treaty skills	Egypt's ~60 tax treaties provide WHT relief and MAP/APA pathways for related-party cross-border transactions

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Sources

• Law 91/2005 (Income Tax Law) Arts 24, 30, 38-40, 52, 56, 110-111 — mof.gov.eg
• Ministerial Decree 221 of 2018 — amendment to Art 30 ITL (TP methods, APAs)
• Ministerial Decree 547 of 2018 — Egyptian Transfer Pricing Guidelines (ETA TP circulars)
• Unified Tax Procedures Law No. 206 of 2020 Art 1 (related-party definition), Art 12-13 (TP procedures, CbCR)
• Executive Regulations of Law 91/2005 Arts 38, 39, 40 — TP methods, documentation, comparability
• OECD Transfer Pricing Country Profile: Egypt (June 2022) — oecd.org
• OECD Transfer Pricing Guidelines (January 2022 edition) — acknowledged by ETA as a reference
• Andersen in Egypt "Transfer Pricing Regulations in Egypt and India" (Dec 2025) — eg.andersen.com
• Thomson Reuters "Egypt Enhances Transfer Pricing Rules" (Jul 2018) — tax.thomsonreuters.com
• PwC Worldwide Tax Summaries — Egypt — taxsummaries.pwc.com/egypt

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Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.

Contributed by Ahmed Hassan.