Egypt’s Tax Authority is intensifying efforts to strengthen its transfer pricing framework as part of a broader push to modernize the country’s tax administration and improve transparency in cross-border transactions, according to Rasha Abdel Aal, Head of the Egyptian Tax Authority.
Speaking at the conclusion of a week-long workshop on Advance Pricing Agreements (APAs), Abdel Aal emphasized that the authority, under the guidance of Minister of Finance Ahmed Kouchouk, is prioritizing advanced tax practices—particularly in transfer pricing—as a critical pillar of long-term economic stability and fair tax distribution among multinational enterprises.
“Advance Pricing Agreements are an effective tool for achieving tax certainty and encouraging long-term investment,” she said, adding that APAs ensure the equitable allocation of profits among related parties within multinational groups.
Strategic Training Program Underway
The July 27–31 workshop forms part of a structured training program launched in January 2025. The initiative focuses on equipping technical staff with the expertise needed to manage various types of APAs—unilateral, bilateral, and multilateral—in alignment with international standards.
The most recent session focused on unilateral APAs, including their applicable transaction types, documentation requirements, and analytical procedures. Upcoming sessions will delve into bilateral and multilateral agreements in greater detail.
This phased approach is intended to build institutional capacity across the Egyptian Tax Authority and ensure that tax officers are well-versed in the complexities of multinational profit allocation.
Intangibles, Financial Transactions, and Risk Analysis
In addition to the procedural aspects of APAs, the workshop also tackled critical valuation and analytical topics:
- Valuation of intangible assets using the Discounted Cash Flow (DCF) methodology
- Intra-group financial transactions, such as intercompany loans and financing arrangements
- Value Chain Analysis
- Functions, Assets, and Risks (FAR) Analysis
These advanced topics aim to establish a robust foundation for determining arm’s-length pricing and ensuring fair taxation in cross-border operations.
Aligning With Global Standards
Abdel Aal reaffirmed the Tax Authority’s commitment to adopting international best practices, stating that enhancing the capacity of Egypt’s transfer pricing division is vital to reinforcing the country’s position as a regional leader in tax policy modernization.
