This week, Saudi Arabia issued formal guidelines for its newly implemented advance pricing agreement (APA) regime. The guidelines specify that Bilateral APAs and Multilateral APAs will not be processed until further notice. APAs allow taxpayers to work with tax authorities to gain certainty on their tax positions for several years. The guidance explains how taxpayers can qualify to submit an APA application and the steps to follow if accepted. Unilateral APAs involve only one country, while Bilateral APAs involve two countries. Transactions covered by the APA must involve at least 100 million Saudi riyals ($26.66 million) annually, though exceptions may apply for complex transactions. Taxpayers must start the APA application process at least 12 months before the fiscal year begins. The APA system was introduced in 2023 and became effective in 2024, providing more clarity to taxpayers.
To access the Guidance, click here.