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Application of Transfer pricing Guidelines According to Article 22 of the regulation, the transactions conducted with related parties of the Zakat payer are subject to the Transfer pricing guidelines issued by the Board of Directors of the Authority under Resolution No. (6-1-19) dated 25/5/1440 AH, and any amendments thereto. The aforementioned ministerial resolution included the coverage of Transfer pricing provisions for Zakat payers starting on or after 01/01/2024 AD. The decision also included the application of Transfer pricing provisions to Zakat payers in two phases: Phase One: Zakat payers are required to submit the specified Transfer pricing documentation (master file - local file) if the transactions with related parties reach 100 million Saudi Riyals or more. Investment funds are exempted from the application of Transfer pricing provisions in this phase. Phase Two: This phase will start three years after the application of Phase One. In this phase, Zakat payers are required to submit the specified Transfer pricing documentation (master file - local file) if the transactions with related parties exceed 48 million Saudi Riyals. This phase also includes investment funds. In general, the purpose of Transfer pricing information is to ensure that the terms and conditions of transactions between related parties are comparable to the terms and conditions of transactions between independent parties. This requires the submission of a disclosure form along with the Zakat payer's declaration to disclose transactions with related parties and the pricing methods used for those transactions. The Master File for Transfer pricing purposes refers to a file that contains guidelines about the business and international activities of the multinational group to which the Zakat payer belongs, in addition to the group’s transfer pricing policy and the economic functions and characteristics of the related parties. The Local File for Transfer pricing purposes refers to a file that contains detailed information about the transactions that took place between the Zakat payer and the related parties. Zakat payers and Zakat Activities Introduction Section 3 of Chapter One of the regulation includes provisions related to Zakat payers. The sub-sections of this chapter include provisions regarding those subject to the regulation, exemptions, and related provisions such as the determination and controls of residency. Section 1 of Chapter Two includes a number of important provisions related to activities, such as the commencement of Zakat collection, cessation of activity, mergers between Zakat payers, and the consolidation of accounts. This guide reviews the most prominent provisions related to zakat payers and activities. Those subject to the provisions of the Regulation.