Transfer Pricing in South Sudan

The legal framework

The entire regime is section 81 of the Taxation Act, 2009 (Revised Edition 2021, consolidating amendments to 30 June 2021), and it runs to three subsections: section 81(1) labels the related-party price the transfer price, section 81(2) prescribes the methods, and section 81(3) adds the difference between the arm's length price and the transfer price to taxable profit. There is no transfer pricing act, no regulations and no published SSRA guidance. The standard itself sits in section 5, which defines an arm's length price as the price expected to be received between parties dealing in a fair market — a price-level test, not the OECD's inquiry into the conditions of a transaction.

Scope follows the section 5 definition of related persons: any special relationship that may materially influence economic results, plus enumerated limbs covering officers and directors, business partners, employment, a 50 per cent or greater holding of shares or voting rights, direct or indirect control, common control and extended family. Nothing in section 81 requires a non-resident counterparty, so wholly domestic dealings are caught; there is no de minimis, no small-taxpayer carve-out and no safe harbour. Business profit tax reaches residents on worldwide profit and non-residents on South Sudan-source profit including through a permanent establishment (sections 66 and 68), so inbound branches are exposed alongside subsidiaries.

Two parallel provisions do more practical work than section 81 itself. Section 73 allows a deduction for a related-party payment only up to the fair market value of the goods or services concerned, and section 59(3)–(4) mirrors this for entrepreneurial individuals, expressly extending to interest, rent and other related-party expenses — South Sudan's only interest limitation, with no ratio and no EBITDA cap. Section 59(7)(f) denies outright any deduction for a loss on a direct or indirect related-party transfer of property. Since 2023 the Commissioner General has also had section 8A, a general anti-avoidance rule inserted by the Financial Act 2023/2024, which expressly catches rights or obligations that would not normally be created between persons dealing at arm's length. The OECD Guidelines have no domestic status — the word OECD does not appear in the Act — and South Sudan is not an Inclusive Framework member, so no OECD transfer pricing country profile exists for it.

Methods, comparables and benchmarking

Section 81(2) is a rigid hierarchy rather than a most-appropriate-method rule: the arm's length price shall be determined under the comparable uncontrolled price method and, where that is not possible, the resale price or cost plus method. The transactional net margin method, the profit split and any residual 'other method' have no statutory standing. A TNMM study is not prohibited, but it is extra-statutory evidence, and an officer who can point to a plausible internal CUP is entitled to insist on it.

There is no benchmarking law of any kind — no arm's length range, no interquartile convention, no median adjustment, no multi-year averaging, no comparability-adjustment guidance, no tested-party rule and no statement on local versus regional comparables or the use of foreign databases. Section 81(3) adjusts by the difference between the arm's length price and the transfer price, which presupposes a single price rather than a distribution. With no meaningful pool of South Sudanese listed-company data, benchmarking in practice relies on regional or pan-African proxies that carry no domestic legal sanction on either side of the argument. Section 25 adds a mechanical trap: foreign-currency transactions must be converted into South Sudanese Pounds at the prevailing market rate, so USD-denominated intercompany agreements and studies need a documented conversion basis.

Documentation: what the SSRA expects

South Sudan has no master file, no local file and no transfer pricing filing. What it has is section 24, and section 24(2) is sharper than most documentation regimes in the region: no expense or deduction is allowed unless the taxpayer maintains documentation in the required manner and form. The sanction for weak records is disallowance, not a documentation penalty. Section 24(1) requires accounts of all transactions to be available in South Sudan for inspection by a revenue officer — a physical-availability requirement that groups holding transfer pricing files on a regional server should take seriously — and section 24(3) requires six-year retention.

Production is demand-driven: there is no contemporaneous-documentation rule and no fixed number of days. The Commissioner General's power in section 14(3), as replaced by the Financial Act 2023/2024, allows a written notice requiring information within the time specified in that notice, attendance for examination, or production of documents; it reaches banks, financial institutions and government institutions, overrides privilege objections and is backed by an offence for non-compliance. The annual business profit tax return and final settlement are due by 1 April following the calendar tax period (section 84), with quarterly advance payments on 15 October, 15 January, 15 April and 15 July (section 83). No transfer pricing schedule or related-party disclosure is prescribed, although section 38(2) already contemplates information returns in respect of 'any other transaction' — a hook the SSRA could use without new primary legislation. There is no country-by-country reporting obligation at all.

Audits, penalties and the enforcement climate

There is no transfer pricing penalty; an adjustment feeds the general understatement penalty in section 34, which is tiered: 10 per cent where the understatement is under 25 per cent of the tax properly payable, 50 per cent where it exceeds 25 per cent, and a penalty equal to the understatement — and in any event not less than 200 per cent of it — where the understatement exceeds twice the tax that should have been shown on the return. Because a section 81(3) adjustment is added directly to taxable profit, a moderate pricing adjustment crosses the 25 per cent line easily. Preparing a study buys nothing: there is no documentation defence and no reasonable-efforts standard. The only conduct-based relief is section 34(4), which reduces the penalty to 5 per cent where the taxpayer volunteers the understatement.

Around that sit an automatic 5 per cent late-payment penalty (section 37), late filing at 5 per cent a month capped at 25 per cent (section 38(1)) and interest at 120 per cent of the prime commercial rate (section 36); the waiver power, capped at 75 per cent, attaches to the late-payment penalty and charges, not to the section 34 penalty. Poor records invite a best-judgment determination under section 31. Assessments must be made within three years of filing or the due date, with no limit where there is intent to evade, and collection runs six years from the demand. In practice, SSRA enforcement in 2026 is aimed at basic compliance: a public notice of 7 September 2026 gave taxpayers until 15 September to file August returns and clear audit arrears. Withholding on cross-border service and rent flows remains a more likely profit-shifting lever than a formal section 81 adjustment.

Dispute resolution and advance certainty

The domestic route is the Appeals Board convened under section 49. An appeal must be lodged within 30 days of the action complained of, with reasons and supporting documents, and section 49(4) places the burden of proof on the appellant — in a pricing dispute the taxpayer must positively establish that its prices were arm's length, on a record it built itself. The Board must decide within 60 days; if it does not, section 50(2) deems the decision to be in the taxpayer's favour and section 50(3) requires the Commissioner General to act on it immediately. Onward appeal lies to the High Court within 15 days, limited to jurisdiction, interpretation of law or evidence, and section 52 suspends collection of the disputed amounts while an appeal is on foot.

There is no APA programme and no MAP provision — the Act never uses the words mutual agreement, competent authority or corresponding adjustment. The substitute for an APA is a section 27 ruling, binding on both the taxpayer and the SSRA as to the law at the time, provided disclosure was full and true and the transaction proceeds as described, and reviewable by the Appeals Board under section 49(3); it is useful on characterisation, weaker on a negotiated margin. Sections 82(2) and 128 give treaties primacy, but no double tax agreement can be shown to be in force: BRITACOM's South Sudan country page records agreements signed with Morocco and the UAE, the UAE agreement dated 23 April 2019, and no ratification or entry-into-force notice has been published for either. With no MAP, no corresponding adjustment and no secondary adjustment rules, economic double taxation arising from a South Sudanese adjustment is likely to be permanent. No transfer pricing judgment is publicly reported, and there is no public database of Board or High Court decisions.

Pillar Two, Amount B and what changes in 2026

South Sudan has not enacted Pillar Two — no income inclusion rule, no undertaxed profits rule, no qualified domestic minimum top-up tax and no draft GloBE legislation — and as a non-member of the Inclusive Framework it has made no commitment to the two-pillar solution. It has taken no position on Amount B: it is neither an electing nor a covered jurisdiction, and the statutory CUP-first hierarchy could not accommodate the Amount B pricing matrix without legislative change.

What is moving is capacity rather than statute. ATAF reported on 11 June 2026 a two-week mission to the SSRA under the Non-Oil Revenue Mobilisation and Accountability Initiative, supporting the development of a transfer pricing legal framework tailored to South Sudan — developing, not implementing, which confirms that no modern legislation was in force at mid-2026. No draft transfer pricing bill or timetable has been published. On the statute book, the Financial Act 2023/2024 remains the last transfer pricing-relevant change; the Financial Act 2024/2025, effective 2 December 2024, contained none. The Ministry of Finance references a Draft Finance Bill for FY 2025/2026, which remains at draft stage.

How practitioners should respond

The discipline for this jurisdiction is subtraction. Do not import OECD architecture into a South Sudanese file: a report built around a TNMM benchmarking range answers a question section 81 does not ask. Build the price instead. Lead with a comparable uncontrolled price supported by internal comparables, third-party contracts, published price lists or tender data, and use margin analysis only as corroboration. Document at the level of the transaction and the price, and keep the file — or a complete copy — physically available in South Sudan.

Then follow the money. On present law the realistic exposure is rarely a section 81 adjustment: it is disallowance of related-party deductions above fair market value under sections 73 and 59, disallowance under section 24(2) for inadequate records, withholding on cross-border service and rent flows, and section 8A where a structure looks engineered. Price conservatively at entry, because with no treaty shown to be in force, no MAP and no corresponding adjustment, double taxation has nowhere to go. Use a section 27 ruling where a structure is material, diarise the three-year assessment window and the 60-day deemed-decision rule, keep records for six years, and treat the section 34(4) voluntary disclosure rate as a live option rather than a last resort. Finally, monitor the ATAF-assisted reform: the framework that will replace section 81 is being drafted now, and it will almost certainly arrive with documentation obligations attached.