Transfer Pricing Compliance Framework in Qatar
Transfer Pricing requirements include four tiers of compliance: (i) the Transfer Pricing Disclosure Form that must be submitted alongside the Tax Return, (ii) the Master File, (iii) the Local File, and (iv) the Country by Country Reporting, a regulation introduced in 2018/2019.

Transfer pricing (TP) concerns the pricing agreements and transactions between affiliated entities or related parties. TP involves multinational corporations determining the prices for goods and services exchanged among subsidiaries or entities under common control. In numerous nations, TP regulations apply to transactions both across borders and within a country's borders.

Documentation and Responsibility
The preparation of Transfer Pricing (TP) documentation should be established according to OECD guideline, encompassing the Local File and Master File. There is a specific template in Dhareeba portal that outlines all sections that should be covered for the local and master file. Notably, the responsibility for the Master File lies with the parent company at the group level, tasked with furnishing requisite data to the local entity. The local file lies with the Qatari company that has a commercial registration in Qatar, the local file of any of its related parties or subsidiaries in the GCC or abroad cannot be used to submit the local file alternatively.

OECD Guidelines and Criteria
Adherence to the OECD Guidelines is paramount in establishing the Local File and Master File, without a mandated format or template, provided the following conditions are met

• For the Local and master file:

1. Advising clients on implementing an effective managerial accounting system.
2. Meeting the threshold criteria (QR 50,000,000 and above) of the total revenues or total assets.
3. Having at least one related party located outside the State of Qatar.

• For the Transfer pricing Disclosure Form:

1. Advising clients on implementing an effective managerial accounting system.
2. Meeting the threshold criteria (QR 10,000,000 till QR 50,000,000) of the total revenues or total assets.
3. Having at least one related party located outside the State of Qatar.

Upon request, GTA may require entities to furnish supporting documents to substantiate their positions, with a 30-day deadline for compliance from the date of GTA's request.

Eliminating Documentation Gaps
It's important to note that GTA will no longer entertain the absence of a Local File or Master File, even if other group companies are responsible for establishing and documenting the arm's length principle, or if adjustments to intercompany prices are not determined to be at arm's length.

Transfer Pricing Methodologies - Arm's Length Price Calculation
Regarding the determination of the arm's length price, the Executive Regulations mandate the use of the Comparable Uncontrolled Price (CUP) methodology as the primary method. Should the CUP method not be applicable, taxpayers may request GTA's approval for an alternative transfer pricing methodology, as outlined in the OECD guidelines, which may include:

1. Comparable Uncontrolled Price (‘CUP’).
2. Resale Price Method (‘RPM’).
3. Cost Plus Method (‘CPLM’).
4. Profit Split Method (‘PSM’).
5. Transactional Net Margin Method (‘TNMM’).

Expert Transfer Pricing Services
Our TP experts at the firm are equipped to undertake the following activities:

1. Conducting functional analyses of intra-group transactions, involving meetings and interviews with the Group's management.
2. Performing economic analyses to ascertain the arm's length nature of significant intra-group transactions, utilizing the most appropriate TP method in accordance with OECD TP Guidelines.
3. In cases where comparable uncontrolled transactions are lacking, conducting benchmarking analyses using external databases to assess the arm's length nature of specific intra-group transactions.
4. Drafting TP documentation that adheres to OECD TP Guidelines standards, providing a comprehensive overview of the analyses conducted and conclusions reached regarding the arm's length nature of each significant intra-group transaction.

For comprehensive and expert Transfer Pricing services in Qatar, trust HLB AG and Antonio Ghaleb and Partner CPA for your compliance and documentation needs.