{"id":405,"date":"2026-06-05T12:18:02","date_gmt":"2026-06-05T12:18:02","guid":{"rendered":"https:\/\/www.dariba.co\/?p=405"},"modified":"2026-06-05T12:18:02","modified_gmt":"2026-06-05T12:18:02","slug":"transfer-pricing-documentation","status":"publish","type":"post","link":"https:\/\/www.dariba.co\/?p=405","title":{"rendered":"Saudi Arabia Transfer Pricing Documentation Requirements: Master File, Local File, and CbCR Explained"},"content":{"rendered":"\n<style>\n\/* \u2500\u2500 DARIBA.CO \u2014 ARTICLE BODY STYLES (white background compatible) \u2500\u2500 *\/\n:root {\n  --green:        #059669;\n  --green-light:  #d1fae5;\n  --green-dim:    #ecfdf5;\n  --green-border: #6ee7b7;\n  --amber:        #d97706;\n  --amber-light:  #fffbeb;\n  --amber-border: #fcd34d;\n  --blue:         #2563eb;\n  --blue-light:   #eff6ff;\n  --blue-border:  #93c5fd;\n  --red:          #dc2626;\n  --text-primary: #111827;\n  --text-muted:   #6b7280;\n  --text-light:   #9ca3af;\n  --border:       #e5e7eb;\n  --surface:      #f9fafb;\n  --surface-2:    #f3f4f6;\n  --radius:       8px;\n  --radius-lg:    12px;\n}\n.dariba-article {\n  font-family: 'DM Sans', -apple-system, BlinkMacSystemFont, 'Segoe UI', sans-serif;\n  font-size: 1rem;\n  line-height: 1.75;\n  color: var(--text-primary);\n  max-width: 780px;\n}\n.dariba-article p { margin-bottom: 1.1rem; 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border: 1px solid var(--border); border-radius: var(--radius); padding: 1rem; text-decoration: none; display: block; transition: border-color 0.2s, box-shadow 0.2s; }\n.dariba-article .also-card:hover { border-color: var(--green); box-shadow: 0 2px 8px rgba(5,150,105,0.08); }\n.dariba-article .also-card .also-label { font-size: 0.68rem; font-weight: 700; text-transform: uppercase; color: var(--green); letter-spacing: 0.08em; margin-bottom: 0.35rem; }\n.dariba-article .also-card .also-title { font-size: 0.875rem; font-weight: 600; color: var(--text-primary); line-height: 1.4; }\n.dariba-article .disclaimer { font-size: 0.78rem; color: var(--text-muted); border-top: 1px solid var(--border); padding-top: 1rem; margin-top: 2.5rem; font-style: italic; line-height: 1.6; }\n<\/style>\n\n<!-- ARTICLE BODY \u2014 paste into WordPress HTML editor -->\n<div class=\"dariba-article\">\n\n    <div class=\"article-meta\">\n\n    <\/div>\n\n\n\n    <div class=\"series-banner\">\n      Part of <a href=\"\/01_transfer_pricing_saudi_arabia_complete_guide.html\">Transfer Pricing in Saudi Arabia: The Complete Guide<\/a> \u2014 Article 3 of 7\n    <\/div>\n\n    \n<div class=\"section-block\" id=\"overview\">\n<div class=\"section-number\"><span class=\"section-num-badge\">01<\/span><h2>The Three-Tier Structure: Overview<\/h2><\/div>\n<p>Saudi Arabia&#8217;s documentation framework (Articles 15\u201318 of the Bylaws) mirrors OECD BEPS Action 13. The three tiers serve distinct purposes \u2014 and none is filed proactively as a routine matter. The Master File and Local File are maintained and provided on ZATCA request; the Disclosure Form is the annual proactive filing.<\/p>\n<div class=\"table-wrap\">\n<table>\n<thead><tr><th>Tier<\/th><th>Document<\/th><th>Purpose<\/th><th>Deadline<\/th><\/tr><\/thead>\n<tbody>\n<tr><td>1<\/td><td>Master File<\/td><td>Global MNE Group operations and TP policies<\/td><td>On request (min. 30 days)<\/td><\/tr>\n<tr><td>2<\/td><td>Local File<\/td><td>Detailed transaction-level analysis for Saudi entity<\/td><td>On request (min. 30 days)<\/td><\/tr>\n<tr><td>3<\/td><td>CbCR<\/td><td>Jurisdiction-by-jurisdiction financial and tax data<\/td><td>12 months after group year-end<\/td><\/tr>\n<tr><td>\u2014<\/td><td>CbCR Notification<\/td><td>Identifies the Reporting Entity and filing country<\/td><td>120 days after year-end<\/td><\/tr>\n<tr><td>\u2014<\/td><td>Disclosure Form + Affidavit<\/td><td>Annual filing for all entities with controlled transactions<\/td><td>120 days after year-end<\/td><\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<div class=\"callout callout-info\">\n<div class=\"callout-label\">Critical Point<\/div>\n<p>The June 2024 ZATCA Guidelines confirm: where a taxpayer has <strong>not<\/strong> prepared TP documentation in accordance with the Guidelines, the burden of proof on that taxpayer is increased in any audit examination. Absent documentation transfers evidentiary leverage to ZATCA before a dispute even begins.<\/p>\n<\/div>\n<\/div>\n\n<div class=\"section-block\" id=\"exempt\">\n<div class=\"section-number\"><span class=\"section-num-badge\">02<\/span><h2>Who Is Exempt From Documentation?<\/h2><\/div>\n<p>Under Article 19, the following are not required to maintain Master File or Local File documentation:<\/p>\n<ul class=\"article-list\">\n<li><strong>Natural persons<\/strong> (other than organisations)<\/li>\n<li><strong>Small Enterprises<\/strong>: below SAR 6 million total controlled transactions (CIT\/mixed) or SAR 48 million (Zakat-only) per 12-month period<\/li>\n<li><strong>State-owned companies<\/strong> excluded from Zakat collection<\/li>\n<li><strong>Investment funds<\/strong><\/li>\n<\/ul>\n<p>The Small Enterprise exemption covers documentation only. The arm&#8217;s length standard and Disclosure Form remain mandatory. ZATCA may override the exemption for entities transacting with special economic zone entities, tax-exempt parties, or where ZATCA suspects artificial or abusive arrangements.<\/p>\n<p>A key 2023 addition: consolidated Zakat group companies are excluded from TP on transactions <em>between themselves<\/em> \u2014 but must still disclose transactions with entities held at less than 100%.<\/p>\n<\/div>\n\n<div class=\"section-block\" id=\"masterfile\">\n<div class=\"section-number\"><span class=\"section-num-badge\">03<\/span><h2>Tier 1: The Master File (Article 16)<\/h2><\/div>\n<p>The Master File provides ZATCA with a group-level picture. It is prepared by the MNE Group (typically at the UPE level) and made available to each jurisdiction on request. The Saudi entity must ensure it can be produced within 30 days of a ZATCA request.<\/p>\n<p>Required content under Article 16 of the Bylaws:<\/p>\n<ul class=\"article-list\">\n<li><strong>Organisational structure<\/strong>: legal and beneficial ownership, geographic location of operating entities<\/li>\n<li><strong>Group business description<\/strong>: key profit drivers; supply chain for largest products\/services (5%+ of group turnover); important intragroup service arrangements; main geographic markets; brief functional analysis of value creation by entity; significant restructurings\/acquisitions\/divestitures during the year<\/li>\n<li><strong>Intangibles<\/strong>: R&amp;D and IP strategy; list of material intangibles with legal\/economic owners; important intercompany IP agreements (cost contribution arrangements, R&amp;D service agreements, licences); transfers of intangibles during the year<\/li>\n<li><strong>Intercompany financing<\/strong>: how the group is financed; central financing entity identification; group-wide financing TP policies<\/li>\n<li><strong>Financial and tax positions<\/strong>: consolidated financial statements; list of existing unilateral APAs and tax rulings allocating income between countries<\/li>\n<\/ul>\n<\/div>\n\n<div class=\"section-block\" id=\"localfile\">\n<div class=\"section-number\"><span class=\"section-num-badge\">04<\/span><h2>Tier 2: The Local File (Article 17)<\/h2><\/div>\n<p>The Local File is the most practically significant documentation obligation. It is the transaction-level record supporting the arm&#8217;s length position for every category of controlled transaction involving the Saudi entity. Four sections are required:<\/p>\n<p><strong>Section 1 \u2014 Taxable Person information<\/strong>: management structure, organisation chart, reporting lines; detailed business strategy description including any business restructuring involvement.<\/p>\n<p><strong>Section 2 \u2014 Material controlled transactions<\/strong> (for each category): transaction description and context; intragroup payment amounts by country; related party identification; <strong>copies of all intercompany agreements<\/strong>; detailed comparability and functional analysis; TP method selection with reasons; identification of tested party; key assumptions; list of comparables with financial data; comparability adjustments; reasons for arm&#8217;s length conclusion; summary of financial information used; copies of any existing APAs or rulings.<\/p>\n<p><strong>Section 3 \u2014 Industry analysis<\/strong>: major competitors; SWOT analysis; supplier and buyer power; availability of substitutes; market size, demand\/supply trends, entry requirements, market share.<\/p>\n<p><strong>Section 4 \u2014 Financial information<\/strong>: annual financial statements (audited if they exist); allocation schedules linking financial data to the TP analysis; summary schedules of comparables data.<\/p>\n<\/div>\n\n<div class=\"section-block\" id=\"cbcr\">\n<div class=\"section-number\"><span class=\"section-num-badge\">05<\/span><h2>Tier 3: CbCR &amp; CbCR Notification (Article 18)<\/h2><\/div>\n<p>CbCR obligations apply to MNE Groups with consolidated group revenue exceeding <strong>SAR 3.2 billion<\/strong> in the preceding tax\/Zakat year.<\/p>\n<p>The <strong>CbCR<\/strong> is due within <strong>12 months<\/strong> after the last day of the MNE Group&#8217;s tax\/Zakat year. The UPE or SPE resident in Saudi Arabia files it. A Saudi Constituent Entity (non-UPE) must file locally if: the UPE is not required to file in its own jurisdiction; or there is no qualifying competent authority agreement with Saudi Arabia; or automatic exchange is not effectively operating.<\/p>\n<p>The <strong>CbCR Notification<\/strong> is entirely separate \u2014 due within <strong>120 days<\/strong> after year-end, filed by every Saudi Constituent Entity of a qualifying MNE Group. It discloses the identity and residence of the Reporting Entity and the country where the CbCR is filed.<\/p>\n<div class=\"callout callout-warning\">\n<div class=\"callout-label\">Separate Obligations<\/div>\n<p>Filing the CbCR does <strong>not<\/strong> satisfy the CbCR Notification requirement. Filing the Disclosure Form does not satisfy it either. The CbCR Notification is a standalone annual filing with its own 120-day deadline.<\/p>\n<\/div>\n<\/div>\n\n<div class=\"section-block\" id=\"disclosure\">\n<div class=\"section-number\"><span class=\"section-num-badge\">06<\/span><h2>The Disclosure Form: The Annual Filing<\/h2><\/div>\n<p>The Disclosure Form (Article 14) applies to <strong>all Taxable Persons with controlled transactions<\/strong>, regardless of size. It is due within <strong>120 days<\/strong> after year-end and must include: related party information; business restructuring details; ownership information; financial summary data; transaction descriptions and amounts; the TP method applied; a statement on non-monetary or no-consideration transactions; and confirmation that Master File and Local File documentation is maintained.<\/p>\n<p>Critically, it must be accompanied by an <strong>affidavit from a licensed Saudi auditor<\/strong> certifying that the MNE Group&#8217;s TP policy is consistently applied by and in relation to the taxpayer. This requirement, introduced in the March 2023 amendments, requires advance coordination with the external auditor \u2014 it is not a routine sign-off.<\/p>\n<\/div>\n\n<div class=\"section-block\" id=\"example\">\n<div class=\"section-number\"><span class=\"section-num-badge\">07<\/span><h2>Worked Example: Mapping the Obligations<\/h2><\/div>\n<div class=\"callout\">\n<div class=\"callout-label\">Worked Example<\/div>\n<h4>Al-Rashid Distribution Co. \u2014 Obligation Mapping<\/h4>\n<p>Al-Rashid Distribution Co. is a Saudi-based distributor of consumer electronics, 80% owned by a Korean MNE Group parent (consolidated group revenue: SAR 45 billion). Controlled transactions:<\/p>\n<div class=\"table-wrap\" style=\"margin:.75rem 0;\">\n<table>\n<thead><tr><th>Transaction<\/th><th>Value<\/th><\/tr><\/thead>\n<tbody>\n<tr><td>Goods purchase from Korean parent<\/td><td>SAR 180M<\/td><\/tr>\n<tr><td>Management fee to Korean parent<\/td><td>SAR 8M<\/td><\/tr>\n<tr><td>Brand royalty<\/td><td>SAR 4M<\/td><\/tr>\n<tr><td>IT services from UAE affiliate<\/td><td>SAR 2M<\/td><\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>Total controlled transaction value: <strong>SAR 194M<\/strong> \u2014 above the SAR 6M Small Enterprise threshold.<\/p>\n<p><strong>Obligations:<\/strong> (1) Disclosure Form + auditor affidavit within 120 days. (2) Local File and Master File maintained and available within 30 days of ZATCA request. (3) CbCR Notification within 120 days (SAR 45B group revenue is above SAR 3.2B threshold). (4) Verify CbCR is filed by the Korean UPE in Korea \u2014 if Korea and Saudi Arabia have an operative automatic exchange arrangement for CbCRs, Al-Rashid need not file locally. (5) TP analysis for each transaction category.<\/p>\n<\/div>\n<\/div>\n\n<div class=\"section-block\" id=\"failures\">\n<div class=\"section-number\"><span class=\"section-num-badge\">08<\/span><h2>Common Documentation Failures<\/h2><\/div>\n<ul class=\"article-list\">\n<li><strong>Preparing documentation after a ZATCA enquiry.<\/strong> &#8220;Readily accessible and available&#8221; means contemporaneous. Retrospectively prepared documents carry significantly less evidentiary weight.<\/li>\n<li><strong>Missing intercompany agreements.<\/strong> Article 17 requires copies of all intercompany agreements as part of the Local File. Missing or outdated contracts are a direct documentation gap.<\/li>\n<li><strong>Inadequate functional analysis.<\/strong> Two paragraphs of generic activity description do not constitute a functional analysis. It must be specific, risk-analysed, and tied directly to the TP method selection.<\/li>\n<li><strong>Unadjusted foreign comparables.<\/strong> Applying European benchmarks to a Saudi entity without adjusting for geographic risk differences is methodologically weak.<\/li>\n<li><strong>Missing the CbCR Notification.<\/strong> Many qualifying taxpayers are unaware of this as a separate filing obligation. The 120-day deadline applies regardless of where the CbCR itself is filed.<\/li>\n<\/ul>\n<\/div>\n\n<div class=\"section-block\" id=\"faq\">\n<div class=\"section-number\"><span class=\"section-num-badge\">09<\/span><h2>Frequently Asked Questions<\/h2><\/div>\n<div class=\"faq-list\">\n<div class=\"faq-item\"><button class=\"faq-q\">When must TP documentation be ready \u2014 at filing time or on request?<span class=\"faq-icon\">+<\/span><\/button><div class=\"faq-a\">The Master File and Local File are maintained at all times and provided to ZATCA within a minimum of 30 days of a written request. They are not filed proactively. The Disclosure Form, by contrast, is filed annually within 120 days of year-end.<\/div><\/div>\n<div class=\"faq-item\"><button class=\"faq-q\">Our Small Enterprise exemption applies \u2014 do we still need any TP documentation?<span class=\"faq-icon\">+<\/span><\/button><div class=\"faq-a\">Small Enterprise status exempts from the Master File and Local File obligations only. You must still price controlled transactions at arm&#8217;s length and file the Disclosure Form (with auditor affidavit) within 120 days of year-end.<\/div><\/div>\n<div class=\"faq-item\"><button class=\"faq-q\">The Master File is prepared by our overseas group HQ. What is our obligation?<span class=\"faq-icon\">+<\/span><\/button><div class=\"faq-a\">The obligation is on the Saudi Taxable Person. It is the Saudi entity&#8217;s responsibility to ensure the Master File exists, is current, and can be produced within 30 days of a ZATCA request. Relying on a group commitment that has not been tested is a compliance risk.<\/div><\/div>\n<div class=\"faq-item\"><button class=\"faq-q\">Do we need a separate CbCR Notification even if our group files the CbCR in another country?<span class=\"faq-icon\">+<\/span><\/button><div class=\"faq-a\">Yes. The CbCR Notification must be filed by every Saudi Constituent Entity of a qualifying MNE Group within 120 days of year-end, regardless of where the CbCR itself is filed. It is a standalone obligation.<\/div><\/div>\n<\/div>\n<\/div>\n\n<div class=\"takeaways\">\n<div class=\"takeaways-title\">&#9670; Key Takeaways<\/div>\n<ol>\n<li>TP documentation in Saudi Arabia is a standing obligation \u2014 not a one-time exercise. Master File and Local File must be current and accessible at all times.<\/li>\n<li>The Disclosure Form (with auditor affidavit) is an annual 120-day filing for all entities with controlled transactions. Small Enterprise status does not exempt from this.<\/li>\n<li>CbCR (12-month deadline) and CbCR Notification (120-day deadline) are separate, standalone obligations for SAR 3.2B+ MNE Groups.<\/li>\n<li>30 days is the minimum window ZATCA gives to produce documentation on request. Documentation prepared after audit contact carries significantly less weight than contemporaneous records.<\/li>\n<\/ol>\n<\/div>\n\n\n    <!-- SERIES NAV -->\n    <div class=\"series-footer\">\n      <p>Back to the Complete Guide<\/p>\n      <h4>Transfer Pricing in Saudi Arabia: The Complete Compliance Guide (2024)<\/h4>\n      <a href=\"\/01_transfer_pricing_saudi_arabia_complete_guide.html\" class=\"btn-primary\">Read the Pillar \u2192<\/a>\n    <\/div>\n\n    <!-- ALSO READING -->\n    <div class=\"also-reading\">\n      <h4>Also worth reading<\/h4>\n      <div class=\"also-cards\"><a href=\"\/01_transfer_pricing_saudi_arabia_complete_guide.html\" class=\"also-card\"><div class=\"also-label\">Tax Intelligence<\/div><div class=\"also-title\">Transfer Pricing in Saudi Arabia \u2014 The Complete Compliance Guide (2024)<\/div><\/a>\n<a href=\"\/03_tp_documentation_master_file_local_file_cbcr.html\" class=\"also-card\"><div class=\"also-label\">Tax Intelligence<\/div><div class=\"also-title\">Saudi TP Documentation: Master File, Local File &#038; CbCR<\/div><\/a>\n<a href=\"\/05_intercompany_services_management_fees_saudi_arabia.html\" class=\"also-card\"><div class=\"also-label\">Tax Intelligence<\/div><div class=\"also-title\">Intercompany Services &#038; Management Fees \u2014 TP Compliance<\/div><\/a>\n<a href=\"\/07_zatca_transfer_pricing_audits_adjustments_apa.html\" class=\"also-card\"><div class=\"also-label\">Tax Intelligence<\/div><div class=\"also-title\">ZATCA TP Audits \u2014 Triggers, Adjustments &#038; APA Framework<\/div><\/a><\/div>\n    <\/div>\n\n    <p class=\"disclaimer\">This article reflects the Saudi Transfer Pricing Bylaws (March 2023 version) and the ZATCA Transfer Pricing Guidelines (June 2024 edition). It is for informational purposes only and does not constitute legal or tax advice. Readers should confirm the current position with ZATCA guidance or a qualified Saudi TP advisor. dariba.co is an independent platform with no consulting relationships.<\/p>\n\n\n<\/div><!-- end .dariba-article -->\n\n<script>\ndocument.querySelectorAll('.dariba-article .faq-q').forEach(function(btn) {\n  btn.addEventListener('click', function() {\n    btn.parentElement.classList.toggle('open');\n  });\n});\n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>Part of Transfer Pricing in Saudi Arabia: The Complete Guide \u2014 Article 3 of 7 01 The Three-Tier Structure: Overview Saudi Arabia&#8217;s documentation framework (Articles 15\u201318 of the Bylaws) mirrors OECD BEPS Action 13. The three tiers serve distinct purposes \u2014 and none is filed proactively as a routine matter. The Master File and Local [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-405","post","type-post","status-publish","format-standard","hentry","category-tp"],"_links":{"self":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=405"}],"version-history":[{"count":0,"href":"https:\/\/www.dariba.co\/index.php?rest_route=\/wp\/v2\/posts\/405\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dariba.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}