Global transfer pricing guide

Transfer pricing - Libya

01 Jan 20251 min read

This publication provides a high-level overview of Libya's transfer pricing rules and outlines who to contact for expert guidance in this area.

Contents

Introduction to transfer pricing in Libya

Transfer pricing rules

Although Libya does not have formal transfer pricing rules, the tax department has the authority to assess tax on a deemed profit basis under general anti-avoidance provisions where a transaction appears not to be on the arm’s length terms.

OECD guidance

For arrangements involving jurisdictions that have a Double Tax Treaty with Libya, the OECD Transfer Pricing Guidelines should be considered, as Libya follows the OECD model.

Self-assessment

Preparation of transfer pricing documentation

Master and local file

Some risk factors for challenge

Transactions conducted with related parties that operate in low tax jurisdictions (tax paradise).
Persistent losses in any entity can be a reason of a full tax audit with a risk of potential significant tax adjustment.
Tax deductions for intra-group head office charges and interest rates on intra-group loans are capped by tax regulations.