Jordan’s Layers of Transfer Pricing Compliance10th February 2022
If Jordan’s new transfer pricing legislation, released in June 2021, left you with any questions about filing country-by-country reports (CBCR), you’ll find the answers in the Income and Sales Tax Department’s January 25, 2022, CBCR guide. But since the guide is (so far) only available in Arabic, here’s the takeaway: The first reporting year for the CBCR is fiscal year 2021—which means the report must be submitted by December 31, 2022. The guide also explains the CbCR’s form and content, but based on the Executive Instructions No. 3 for 2021, which Jordan released in September, the CbCR will be mandatory for taxpayers with consolidated revenues exceeding JOD 600 million (roughly $846 million) in the financial year preceding the reporting year. The rest of the CBCR follows OECD guidance. Jordan is intensifying transfer pricing compliance for taxpayers, adding burdensome layers to the OECD’s three-tier documentation recommendation. Along with the master file, local file, and CBCR, Jordan mandates a transfer pricing disclosure where companies will have to reveal detailed information about related parties as well as their related-party transactions. And let’s not forget the transfer pricing affidavit, where taxpayers must justify transfer pricing methods and a certified expert must confirm that the group’s transfer pricing policy reflects the reality of the business. Jordan may be late to the transfer pricing legislation game, but given all of the new obligations, it’s certainly making up for lost time.