Transfer pricing - Botswana
Transfer pricing rules have been introduced into the Income Tax Act in the form of a new section 36A) with effect from 1 July 2019. The rules require that the taxable income derived by any person engaging directly or indirectly in any transaction, operation or scheme with a connected person should be consistent with the arm’s length principle. The regulations are based on the OECD Transfer Pricing Guidelines.
The transfer pricing rules require transactions between directly or indirectly connected persons to be consistent with the arm’s length principle. Transfer pricing applies to transactions with non-residents and transactions with Botswana resident IFSC accredited related companies. The terms “connected person” and “control” are defined in the income tax law.