30/03/2022

The Income and Sales Tax Department, in cooperation with the Public Financial Management and Administration Project, organized a dialogue workshop on the application of the transfer pricing regulation  in the Jordanian tax system for income and sales tax experts .

The Director General of the Department, Dr. Hossam Abu Ali, stressed that the issuance of the Transfer Pricing regulation No. (40) for the year 2021 came with the aim of enhancing tax transparency and enhancing tax justice among taxpayers through the use of a fair price in pricing transactions between concerned parties.

Executive Instructions No. (3) for the year 2021 regarding transfer pricing for income tax purposes were also issued, which enables taxpayers to apply the regulation in accordance with the principles specified in the regulation.
Abu Ali explained that the regulation obliges the tax auditor to abide by fair prices in accordance with the international practices that he identified in the transactions of the concerned parties in order to prevent diligence and disagreement with the taxpayers.

He added that the Income and Sales Tax Department continues, through its partnership and cooperation with the private sector, to implement tax legislation and achieve its goals.

He pointed out that the department’s continued holding of these workshops for the parties concerned with implementing the regulation comes with the aim of shedding light on the most important provisions of the transfer pricing regulation in terms of tax provisions and procedures for implementing the regulation from companies obligated to implement, the clarifications and reports that must be submitted and the legal deadlines for submission, as well as informing auditors, commissioners, and concerned companies and their representatives on international practices relating to transfer pricing .

He said that this workshop comes as part of a series of initiatives through which the Income and Sales Tax Department seeks to strengthen its partnership with the private sector in order to ensure readiness to start implementing regulations and instructions for transfer pricing.

During the workshop, the participants were informed that transfer pricing or transaction pricing at current accounting prices in the market is an international practice that aims to reconsider the prices mentioned in the financial statements of enterprises to determine the fair price for transactions with concerned parties and determine fair prices according to what is going on in the market, which can able to determine the real taxable income in a fair manner.

It was also clarified that transfer pricing apply to transactions between concerned parties, including - without limitation - the exchange of goods, services, loans, financing, or the disposition of movable and immovable funds.

The department issued guidelines and a video on the application of the transfer pricing regulation in the Jordanian tax system.

A large number of members of the Association of Certified Public Accountants, income and sales tax experts participated in the workshop through the Zoom application, in addition to the participants in a face-to-face manner.