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October 3, 2023

Egypt issues transfer pricing Explanatory Instructions

  • The Egyptian Tax Authority has issued transfer pricing Explanatory Instructions No. 78 of 2023 (Instructions).
  • The Instructions aim to clarify Articles 12 and 13 of the Unified Tax Procedures Law No. 206 of 2020 and its amendments via Law No. 211 of 2020, pertaining to transfer pricing provisions.
  • Taxpayers should assess the impact of the new Instructions to understand the implications for their transfer pricing obligations.

Executive summary          

On 19 September 2023, the Egyptian Tax Authority (ETA) issued Transfer Pricing Explanatory Instructions No. 78 of 2023 (Instructions). The Instructions clarify the transfer pricing provisions in the Unified Tax Procedures Law No. 206 of 2020 (UTPL) and aim to address common transfer pricing queries regarding:

  • Local File submission timeline
  • Delay interest
  • Dividends
  • Balance sheet items
  • Payments on behalf of related parties
  • Joint ventures
  • Master File obligation for the Ultimate Parent Entities registered in a free zone

Detailed discussion


In October 2020, the Egyptian Parliament issued the UTPL, which included Articles 12 and 13 related to transfer pricing.

Subsequently, in December 2020, the Egyptian Parliament issued Law No. 211 of 2020, amending Article 13 of the UTPL to include penalty provisions.

Thereafter, in June 2021, Ministry of Finance (MoF) issued Ministerial Decree No. 286 of 2021 for the Executive Regulations to the UTPL to facilitate the implementation of the UTPL. Ministerial Decree No. 286 of 2021 covered Articles 12 and 13 of the UTPL and provided detailed rules and procedures for transfer pricing.

Taking these changes into consideration, taxpayers have raised queries related to the transfer pricing provisions. In the Instructions issued on 19 September 2023, the ETA responds to some of those queries.

Key elements of the transfer pricing Instructions

  1. Local File (LF) submission timeline

    Based on the UTPL, taxpayers should submit the LF within two months following the corporate income tax return (CITR) submission date. The Instructions clarify that if the taxpayer files a revised/amended CITR within 30 days of filing the original CITR, the LF submission timeline shall be calculated from the submission date of the revised/amended CITR. Moreover, to further clarify the method of calculating the LF submission timeline, the Instructions provide practical examples:


    Original tax return UTPL Article 31/C

    Extended tax return CIT Law Article 85

    Amended CITR UTPL Article 33/P2

    Original CITR submission date

    15 April

    7 June

    15 April

    Amended CITR submission date



    2 May

    LF submission deadline

    15 June

    7 August

    2 July

  1. Delay interest

    The Instructions outline that the transfer pricing penalties stipulated under Article 13 of the UTPL are not subject to the delay interest provision stipulated in Article 110 of the Corporate Income Tax (CIT) Law No. 91 of 2005.
  1. Dividends

    The Instructions clarify that dividend payments shall not be treated as related-party transactions.
  1. Balance sheet items

    Related-party transactions that are mere balance sheet items shall be disclosed in Table 508 of the CITR, along with the nature of these transactions.
  1. Payments on behalf

    Transactions in the nature of "payments on behalf" and mark-up, if any, related to these payments shall be considered as related-party transaction and are required to be disclosed in Table 508 of the CITR and the LF.
  1. Joint Ventures (JVs)

    The definition of a "related party" includes transactions with JVs. The Instructions provide for the percentage of the related-party transaction value to be disclosed in Table 508 and the LF if a party related to the owners of the JV engages in a transaction with the JV. To illustrate:

    Note: "EGP" refers to the Egyptian pound.

    In the above example, Company C, a related party of Company A transacts with the JV. Accordingly, both Company A (i.e., an owner of the JV) and Company C (i.e., a related party of Company A) are obliged to disclose the related-party transaction in Table 508 of their CITRs and LFs (subject to meeting the documentation threshold) in proportion to their ownership/share in the JV (i.e., 40% of EGP 10m or EGP 4m).
  1. Master File (MF) obligation for Ultimate Parent Entities (UPEs) registered in free zone

    If the UPE of the group is registered in a free zone, the other group entities that are not registered in the free zone are obliged to prepare the MF. The MF must be submitted with the LF.


Taxpayers should plan their preparation and submission of transfer pricing documentation well in advance to adhere to the stipulated timelines, keeping in mind that the instructions provide flexibility to help taxpayers comply with transfer pricing documentation requirements.

Moreover, taxpayers should be mindful of the items to be disclosed in Table 508 and the LF when preparing their CITR and transfer pricing documentation.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Egypt, Cairo

Ernst & Young LLP (United States), Middle East Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


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