Transfer pricing specific penalties have been introduced under the second clause of Article 13 of Law No. 211 of 2020 in case of non-submission or late submission of transfer pricing documentation at the specified deadlines.
- Failure to complete/declare all related party transactions within the taxpayer’s Corporate Income Tax return, in accordance with the return’s template, results in a penalty of 1% of the total value of the undeclared related party transactions in which the taxpayer has engaged during the respective taxable year;
- Failure to submit the Masterfile results in a penalty of 3% of the total value of related party transactions entered into by the taxpayer during the respective taxable year;
- Failure to submit the Local File results in a penalty of 3% of the total value of related party transactions entered into by the taxpayer during the respective taxable year; and
- Failure to submit the CbC Report (in case the Egyptian resident taxpayer is the Ultimate Parent Entity of a Multinational Group of Enterprises (MNE)) or corresponding CbC Reporting notification forms (in case the Egyptian resident taxpayer is a subsidiary of a foreign parented MNE) on the basis of the pre-determined thresholds, results in a penalty of 2% of the total value of related party transactions entered into by the taxpayer during the respective taxable year.
The penalties applicable, an overall basis, should not exceed 3% of the total value of the related party transactions entered into by the taxpayer during a respective taxable year.