Introduction

Traditionally, transfer pricing (TP) documentation in Kenya and across many jurisdictions globally has largely been a narrative exercise. Taxpayers focused on drafting TP policies that explained their Functions, Assets, and Risks (FAR), justified their pricing, and narrated business models in a manner intended to align with the OECD Guidelines. The emphasis was on storytelling, articulating why the group’s structure and intercompany arrangements made commercial sense.

However, the landscape has fundamentally changed. TP audits have become more forensic and evidence driven. The Tax Appeals Tribunal (TAT) and Courts have made it unequivocally clear that narratives are no longer enough — only verifiable, contemporaneous proof can substantiate a taxpayer’s TP position.

Caveat

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