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Ensure compliance with BURS Transfer Pricing Regulations. Align your intercompany transactions with the arm's length principle and the latest 2019 legislative framework.
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Transfer pricing in Botswana is governed by Section 52 of the Income Tax Act and the Income Tax (Transfer Pricing) Regulations 2019. The Botswana Unified Revenue Service (BURS) mandates that all transactions between connected persons be conducted at arm's length.
Taxpayers must confirm on their annual tax return (via Schedule 16) whether they have transfer pricing documentation in place. BURS has significantly increased its focus on intra-group services, management fees, and financing arrangements.
The 2019 Regulations align Botswana with OECD/UN guidelines, requiring documentation to be ready by the tax return due date.
Mandatory documentation applies if the aggregate value of connected person transactions exceeds BWP 5 Million.
Annual disclosure of related party transaction values and confirmation of TPD availability is required for all corporate taxpayers.
Documentation must be in place before the filing deadline.
BURS requires that transfer pricing documentation be "contemporaneous," meaning it should be developed at the time the transactions are entered into or, at the latest, by the time the tax return is filed.
Failure to have documentation ready upon request (usually within 7-30 days) can lead to the rejection of the TP policy and direct adjustments.
Alignment with international BEPS Action 13 standards.
Botswana follows the three-tier documentation structure. The Local File must provide a detailed analysis of the Botswana entity's operations and specific intercompany transactions.
The Master File provides the global context of the MNE group's operations, IP, and financing.
Significant costs for non-compliance and adjustments.
While there are no specific TP-only penalties, general tax penalties for under-declaration of income apply. These can be up to 200% of the tax avoided.
Having robust documentation is the primary defense to demonstrate a "good faith" attempt to comply with the arm's length principle.
Preparation of BURS-compliant files including FAR and economic analysis.
Economic searches using Pan-African and global databases for comparable data.
Ensuring accurate disclosure of transactions in the annual tax return.
Defending transfer pricing positions during revenue authority queries.
BURS is actively auditing cross-border management fees and royalties. Ensure your documentation meets the 2019 regulatory standard.
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