27 August 2024 –Navigating the Southern Africa transfer pricing landscape

Insights from KPMG’s recent Transfer Pricing in Southern Africa series 

Transfer pricing has become a focus area for both taxpayers and revenue authorities around the world and in Africa. In addition, the recent Organisation for Economic Cooperation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) initiative has led to significant legislative changes and revised transfer pricing guidance, as well as a change in the transfer pricing practices of taxpayers and revenue authorities alike.

At a KPMG webinar that took place on 23 August 2024, KPMG’s transfer pricing specialists in South Africa and Zambia discussed recent transfer pricing trends and developments across the Southern Africa region, which included updates on legislative amendments, how to prepare for revenue authority audits as well as dispute resolution.

Christian Wiesener who heads up the transfer pricing practice in the Western Cape and Eastern Cape at KPMG in South Africa pointed out that South Africa recently, with effect from 2023, broadened the ambit of the South African transfer pricing legislation in that cross-border transactions between both connected persons as well as associated enterprises, as defined, must comply with the law. “The legislation also mentioned that there is an obligation for certain taxpayers to not only prepare but also file their transfer pricing documentation with the revenue authority”, he adds.

By comparison, in Zambia, any form of relevant documentation or information requested by the revenue authority must be kept on file and provided, on request. “The statute of limitation in Zambia is 10 years, a lot longer than in many other countries and therefore taxpayers must ensure that they store the relevant documentation and information for long periods, says Michael Phiri, a transfer pricing specialist, and Head of Tax at KPMG in Zambia.