Transfer Pricing Regulations 2026: documentation now required before you file

The Income Tax (Transfer Pricing) Regulations, 2026 took effect on 1 July 2026 alongside the new Income Tax Act. They apply mainly to international related-party transactions, and also to transactions with a foreign permanent establishment of a Botswana resident and arrangements where an associate benefits from a concessionary tax regime in Botswana.

The biggest practical change is timing. Transfer pricing documentation must be in place by the prescribed date for filing the relevant tax return. Previously many groups prepared it only once BURS opened an enquiry. The content broadly follows the OECD local file and master file. Transactions not exceeding P5 million are exempt.

On method, the comparable uncontrolled price method must be used where it can be applied, traditional transaction methods are preferred over profit methods, and the profit split method is limited to residual profits. Where an adjustment is required it is made to the median of the arm’s length range. Shareholder costs cannot be recharged, and the 5% simplified approach for low-value-adding services does not apply.

BURS cannot rely on information unavailable to the taxpayer when making an adjustment, and taxpayers cannot rely on information unavailable to BURS. A Botswana resident must apply for a corresponding adjustment where double taxation would otherwise arise.

If any of these points apply to your organisation, talk to us. We will tell you what needs to change and what it will take.