TRANSFER PRICING IN NIGERIA

INTRODUCTION

Transfer pricing can be regarded as the price determined for the sale of goods and services between a related and controlled organization. It is simply the general term for pricing of cross border, intra-firm transactions between related parties. Transfer pricing can be also further defined as the price that is charged by one segment or group of an organization for a product or service supplied to another segment or group of the same organization. These transactions between segments or organizations may involve the transfer of tangible goods, intangible goods or properties such as technology, name of brands, services or financing. An example of transfer pricing is when a subsidiary firm sells goods to its parent company. When the parent company pays for the goods from the subsidiary company, the cost paid constitutes the transfer price. This is why tax authorities are always concerned about the methods that companies use in setting their transfer price since the prices directly impact the taxable profits of all the entities involved. The abuse of the transfer pricing by the foreign investors has also become a concern to Nigeria due to the amount of money that is in play.

Transfer pricing can be used in some cases as a profit allocation method to distribute multinationals net profit or loss to other countries where it does business.  Transfer pricing itself is not an illegal act, it becomes illegal when some companies use this avenue as an opportunity to avoid tax by booking profits of their goods and services to another country where there is a low tax rate. This is another reason why tax authorities are involved in this matter. The international tax laws are regulated by the OECD (Organization for Economic Cooperation and Development) and audit firms within each international location

THE ARM’S LENGTH PRINCIPLE

Article 9 of the OECD Model Tax Convention is dedicated to the Arm’s Length Principle (ALP). The ALP. It states that the transfer prices set between the corporate entities should be in such a way as if there were two independent entities. If two unrelated entities trade with each other, a market price for the transaction will be generated. The arm’s length principle is considered to be acceptable for tax purposes.

When two related entities trade with one another, they may wish to intentionally change the price at which the price is recorded, in order to reduce and limit the overall tax bill on the transaction. This will help the entity to have multiple profits and pay little or no tax. Take for example, COCO Incorporation grows cocoa in Africa, then it harvests it and the processes it into powdery form. It then proceeds to sell it to buyers in Britain. It has 3 subsidiaries which are located in Togo, Andorra (which is a tax haven) and Britain. Planting, harvesting, manufacturing and processing is done in Togo. Then COCO in Togo sells at a very low price to COCO in which is a tax haven making COCO in Togo make low profits and low tax payment, then COCO in Andorra which is a tax haven sells it to COCO in Britain at a very ridiculous high price knowing that the product will not be taxed in Andorra. This means no payment of taxes on profit. The arm’s length principle was formulated in order to stop this kind of thing from happening by ensuring that the prices of a product or an item are recorded.

ACCEPTABLE METHODS OF TRANSFER PRICING

The OECD (Organisation for Economic Cooperation and Development) provides 5 common transfer pricing methods that are recognised and accepted by almost all tax authorities globally. These methods are outlined in the OECD guidelines and are divided into two groups which are the ‘’traditional transaction methods’’ and the ‘’transactional profit method’’

Traditional transaction methods

These methods measures the terms and the conditions of actual transactions that occur between independent enterprises and compared these with that of a controlled transaction. The comparison can be based on the basis of direct measures such as price of a transaction and also on the basis of indirect measures or medium such as the gross margin realized on a transaction. They rely on actual transactions. They can further be divided into three namely CUP method, Resale price method, Cost plus method.

• COMPARABLE UNCONTROLLED PRICE (CUP) METHOD:

This is one of the methods under traditional transaction methods and is one of the most common method used. The CUP method compares the prices of goods or services and conditions of a controlled transaction which is between related entities with those of an uncontrolled transaction which is between unrelated entities. It is important that goods and services are assessed under comparable conditions where to get a price that is accurate which the tax authorities will accept.

If the two transactions result in different prices then this suggests that the Arm’s length principle cannot be implemented in the commercial and financial conditions of the associated entities. In such situations the OECD states that the price in the transaction between unrelated parties may need to be substituted for the price in the controlled transaction which is between related entities. The CUP method is mostly preferred by the OECD in situations where the data are available and comparable

An illustration where this method can be implemented well is an item is sold between two associated entities and the same item is also sold by an independent entity.  The two transactions can be comparable when the conditions are the same, when they happen at a similar time, and they both take place in the same stage of production phase. If there is any difference in the item sold in each transaction (when the unrelated entities used another item from another source) then the related entity would need to determine whether this action affected the price in any way. If it affected the price, then there will be adjustments and changes on the cost to ensure that it was priced at arm’s length.

• RESALE PRICE METHOD

This is another method under the traditional transaction methods. The resale price method looks at the gross margin or the difference between the price at which a product or a service is purchased and the price at which it is sold to a third party. The method starts by looking at the resale price of a product that had been brought from a related entity and which is sold to an independent entity. The price of the transaction where the product is sold to an independent entity is known as the resale price. The method requires that the resale margin needs to be calculated and the resale margin can be known as amount at which the party that is reselling would need in order to cover the costs for the selling expenses and the operating expenses associated with this transaction.

The resale price method requires that resale price margins are comparable in order for an arm’s length price to be identified. This method is mostly appropriate for distributors and resellers of products as opposed to manufacturers or producers.

• COST PLUS METHOD

This is the last method under the traditional transaction methods. The cost plus method is mostly used by manufacturers as well as those in the aerospace industry. It analyses a controlled transaction (related entities) between the supplier and the purchaser. It is a transaction method that compares gross profit to cost of sales. It is often used when semi-finished items or products are in exchange between the associated entities or when they have long term arrangements buying and supplying. The supplier’s costs are added to the mark-up for the products or services. The mark-up should be equal to what the independent entity will earn for transactions in a comparable situation including the risks and the current conditions of the market

Take for example Company A is a manufacturer of various threads that are to be sold by entities globally. Company A then sells to Company B which is also its subsidiary in another country. From the above transaction with Company B, Company A earns a gross profit mark-up. Company A does not include the operating expenses incurred in the course of the producing the product. Company C and Company D are independent entities that produces threads too. They sell their threads to independent clothing manufacturers and also earn a gross profit mark-up or the transaction. Company C and Company D included operating expenses in the cost of manufacturing their products. So the gross profit mark-ups of Company C and Company D needs to be adjusted in order to be comparable with that of Company A

Transactional profit method

The transactional profit methods doesn’t measure the terms and conditions of actual transactions. These methods measure the net operating profits that are realized from controlled transactions (which are related entities) and then compare the profit level to that of the profit level that are realized by independent enterprises that are engaged in comparable transactions. This methods rely on the profit levels of the enterprises. They are further divided into two namely the Transactional net margin method (TNMM) and the Transactional profit split method.

• TRANSACTIONAL NET MARGIN METHOD (TNMM)

The TNMM is one of the two transactional profit methods. This method recently emerged as one of the most used method by multinationals because the transfer pricing is based on the net profit gained as opposed to comparable external marketing pricing. It involves assessing the net profit as an appropriate base such as sales or assets that results from a controlled transaction (which occurs between related entities). The OECD states that in order to be accurate, the tax payer should use the same net profit indicator that they will apply in comparable uncontrolled transactions. Tax payers can use comparable data to find the net margin that would have been earned by individual entities in comparable transactions. With TNMM, organizations can measure net profit against sales, costs or assets. It is typically applied by targeting an operating margin within a set range.

• TRANSACTIONAL PROFIT SPLIT METHOD

The transactional profit split method is the latter of the two transactional profit methods. Like the TNMM, the transactional profit split method is also based on the profit and not the comparable market price. This method is set to determine the transfer pricing by assessing how the profit and losses arising from a particular transaction would have been divided between the independent businesses or entities involved in the transaction. It starts by determining the profits or losses from the controlled transactions that are to be split. The profit are then split between the associated entities according to how they would have been divided between independent enterprises in a comparable uncontrolled transaction (between independent or unrelated entities). There are two main approaches that can be used in splitting profits. They are:

• Contribution analysis: This method or approach states that the combined profits are divided into based on the relative value of the functions and actions performed by each of the related entities within the controlled transaction considering the assets that are used and the risks involved
• Residual analysis: This method or approach states that the combined profits are divided into two stages. First, each entity is allocated arm’s length compensation for its function and contribution to the controlled transaction. The second is that any profit or loss after the first stag has been carried out is divided based on the analysis of the facts and circumstances of the transaction

There are 5 transfer pricing methods approved by the OCED. Any approach or method that an organization chooses depend on the particular situation. The company must ensure that it takes into account the amount of the relevant comparable data that is available, the level of comparability of the controlled and the uncontrolled transactions in question and whether a certain method or approach is appropriate for the nature of a particular transaction to be carried out. In some cases an organization may use different methods for different types of transactions.

TRANSFER PRICING REGULATIONS IN NIGERIA

The Federal Inland Revenue Service (FIRS) has released the income tax (Transfer Pricing) Regulation 2018. This took effect for the financial years that started from 12 March, 2018 cancelling out the Income Tax (Transfer Pricing) Regulation that was established in 2012. It also includes some revision made to the OECD (Organization for Economic Cooperation and Development) Transfer pricing guidelines. One of the key objectives of the amended act is to ultimately reduce tax evasion. Tax evasion in transfer pricing occurs when there is under pricing and over pricing between related or connected entities who infringe the arm’s length principle when carrying out their various transactions.

PENALTIES FOR NON COMPLIANCE

TRANSACTIONS TO WHICH TRANSFER PRICING ADJUSTMENT APPLIES

1. Sale and purchase of goods and services;
2. Sale, purchase or lease of intangible assets;
3. Transfer, purchase, licence or use of intangible asset (intellectual property);
4. Provision of services;
5. Lending or borrowing of money;
6. Manufacturing agreement; and
7. Any transaction which may affect profit and loss or any other matter incidental to, connected with or pertaining to the above listed transactions.

UPDATE BY FIRS IN 2018

The Federal Inland Revenue Service (FIRS) has released the income tax (Transfer Pricing) Regulation 2018. This took effect for the financial years that started from 12 March, 2018 cancelling out the Income Tax (Transfer Pricing) Regulation that was established in 2012

• The new regulation replaced the concept of connected taxable persons with connected persons. It now includes any persons that is considered to be related or associated under the United Nations or Organization for Economic Cooperation and Development (OECD) model tax conventions and Transfer pricing guidelines
• Concerning commodities(Imports and Exports)

1. The quoted prices for similar commodities that are listed on international or domestic commodity exchange on the date of the transaction will be recognised as the transfer price
2. In the case of exportation to related entities which are now sold to independent entities or third parties, the transfer price in this transaction for tax purpose will be the price at which the goods or commodities are sold to the independent entity or third party. Note that this will occur if the price is higher than the quoted price
3. Adjustment to the quoted price for similar commodities in (a) and exports in (b) will only be accepted when there is sufficient and reliable evidence to show the basis of adjustments

• Specific tests are to be carried out in order to determine the arm’s length nature of intra group charges
• Returns from the exploitation of the intangibles will only accrue where there is sufficient justification that an entity has contributed to the development, enhancement, maintenance, protection. The tax deductions for any payments for the exploitation rights to intangible assets will be limited to 5% of earnings before interest, tax, depreciation and amortization (EBITDA)
• A connected person is expected to make a declaration of all its connected persons resident in Nigeria or somewhere else not later than 18 months after incorporation or within 6 months after the end of the accounting year whichever is earlier. Although an updated declaration will be requested when there is a merger or an acquisition of up to 20% of an entity or its parent; or any other change in the structure or arrangement of the entity
• Where there is an appointment or retirement of a director of a connected person, a notification is to be made to the FIRS as part of the TP declaration and submitted within 6 months of the financial year end
• The previous safe harbour provisions relating to statutory or regulator prescribed prices have been removed. The Regulations now provide that the FIRS may publish specific guidelines on safe harbours from time to time.
• Under the new Regulations the right to refer a case to the Decision Review Panel will now be that of the Head of the Federal Inland Revenue Service (FIRS) Transfer Pricing Division. Under the old Regulations, the right to refer an assessment from the FIRS to the DRP was that of the taxpayer.
• Prices applied for customs valuation purposes will not automatically be accepted by the FIRS as arm’s length for TP purposes.

FIRS GUIDELINES ON TRANSFER PRICING DOCUMENTATION

• THE DUTY TO PREPARE TRANSFER PRICING DOCUMENTATION

The Federal Inland Revenue Service (FIRS) guideline states that the duty to maintain a transfer pricing documentation is imposed on the tax payer notwithstanding the fact that the services of agent or advisers may be procured at any point in the process of delivery. As such, any liability arising for non-compliance, inadequacies, defects or misstatements is for the account of the taxpayer.

Taxpayers are advised not to procure the services of any person in permanent or pensionable employment of the FIRS to develop, record, correct or submit TP documentation on its behalf. This simply means that organizations or companies are the ones in charge of their transfer pricing documentation and they may source out the services of a knowledgeable and skilled individual or consultant when making preparation and that they should not procure the services of any FIRS individual when making or submitting the documentation regarding transfer pricing

THE THREE TIED APPROACH TO TRANSFER PRICING ACCORDING TO THE FIRS GUIDELINE

In order to achieve the objectives stated in paragraph 2 above, a standardised approach to documentation is required. Consequently, and in line with the TP Regulations, relevant taxpayers are required to adopt a three-tiered TP documentation structure as follows:

1. Master file
2. Local file
3. Country-by-Country reports

• Master file

Generally, the master file provides a top-level view of the MNE group’s transfer pricing practices in their global economic, legal, financial and tax context. Thus, the master file should provide an overview of the MNE group’s business, including the nature of its global business operations, its overall transfer pricing policies, and its global allocation of income and economic activity in order to enable tax administrations determine the presence of significant transfer pricing risk. The Master file should include information covering the MNE group’s organisational structure, a description of the MNE’s 4 business or businesses, the MNE’s intangibles, MNE’s intercompany financial activities and tax positions.

This should also include a detailed description of the Group’s legal and ownership structure, geographical location of operating entities, service arrangements between members, sources of business profit, turnover, intangibles owned, all policies from the development to transfer of R&D within the group, financing arrangements, annual consolidated financial statements and tax rulings on income allocation by jurisdiction.

Taxpayers are advised to provide appropriate tools such as organisational charts, narratives, maps, handbooks containing group information, etc. so as not to leave out relevant facts and for ease of understanding. The detailed requirements and contents of the Master file is contained in the Schedule to the Income Tax (Transfer Pricing) Regulations 2018.

• Local File

The local file provides more detailed information relating to specific intercompany transactions. The local file refers specifically to controlled transactions of the local taxpayer with associated enterprises. The information provided by the Local File, in addition to that of the master file, helps to meet the objectives of demonstrating that the taxpayer has complied with the arm’s length principle in the pricing of its related-party transactions.

The local file contains the detailed description of transactions between the local entity and an associated enterprise such as the local entity’s organisation structure, financial status, business description, tangible and intangible transfers and related-party relationships, details of controlled transactions, business arrangements, functional analysis, value-chain analysis, comparability analysis, and so on.

The detailed description of the contents and requirements of the Local file is contained in the Schedule to the Income Tax (Transfer Pricing) Regulations 2018.

• Country by country report

The Country-by-Country Report (CBCR) provides aggregated information by tax jurisdiction, showing MNE’s allocation of income, income tax paid, and certain indicators of the location of economic activity among tax jurisdictions in which the MNE group operates.

MNEs are required to file the CBCR that will provide annually, and for each tax jurisdiction in which they do business, the amount of revenue, profit before income tax and income tax paid or payable. MNEs are also to report their number of employees, stated capital, retained earnings and tangible assets in each jurisdiction. MNEs must identify each entity within the group doing business in a particular tax jurisdiction and provide an indication of the business activities each entity engages in. These pieces of information will assist the tax administration in carrying out high-level transfer pricing risk assessment.

The following are the criteria for determining a company that should prepare and submit annual Country-by-Country reports to the FIRS in any year of assessment:

1. It is a Nigerian Company or resident for tax purpose in Nigeria
2. It is a member of an MNE Group that has a total group revenue of one hundred and sixty billion Naira (N160 Billion) and above during the Accounting Year immediately preceding the year of assessment (as reflected in the Group’s Consolidated Financial Statements for that preceding Accounting Year or, as may be otherwise ascertained); and
3. It is the Parent Company of the MNE Group (“Ultimate Parent Entity”) or designated by the MNE Group to file on behalf of the Group (“Surrogate Parent Entity”) or has obligation for local filing of country-by-country report in Nigeria (i.e. there 6 is no other entity filing a country-by-country report that contains the financial information of the Nigerian entity, that will be made available to the Service).

KEY COMPLIANCE REQUIREMENTS ACCORDING TO FIRS GUIDELINE

• Contemporaneous Transfer Pricing Documentation

A taxpayer shall determine transfer prices for tax purposes in accordance with the arm’s length principle based upon information reasonably available at the time of the transaction. Thus, a taxpayer must give consideration to whether the terms of its controlled transactions are appropriate for tax purposes before pricing is established, and should confirm the arm’s length nature of its financial results at the time of filing its tax returns.

Within this context, contemporaneous transfer pricing documentation is to bring transfer pricing documentation into existence:

1. a) When a person is developing or implementing a controlled transaction; or
2. b) In any event, no later than the due date for furnishing the tax returns for the basis period of a year of assessment.

Taxpayers should take into account the volume and complexity of their business and transactions in determining the nature and extent of documentation appropriate to their particular circumstances.

TIMELINE FOR FILLING TRANSFER PRICING DELARATION AND DISCLOSURE ACCORDING TO FIRS GUIDELINE

The due date for the submission of the TP Declaration and Disclosure Forms is as stipulated in regulations 13 and 14 of the TP Regulations, as the case may be.

• TIMELINE FOR SUBMISSION OF TRANSFER PRICING DOCUMENTATION

1. In the case of a company having controlled transactions of N300m or more, Master File and the Local File shall be furnished within 21days of the receipt of FIRS’ notice requesting for the submission of the TP documentation
2. In the case of a company having controlled transactions of less than N300m, Master File and the Local File shall be furnished within 90days of the receipt of FIRS’ notice requesting for the submission of the TP documentation

• TIMELINE FOR FILLING COUNTRY BY COUNTRY REPORTS

Without notice or request, country-by-country reports shall be filed, no later than 12 months after the end of the relevant accounting year of the MNE group

• EXTENSION OF TIME TO COMPLY WITH A NOTICE

Only valid request for the extension of time for compliance with a notice shall be considered by the Service. A request for extension of time is valid if, and only if, it was made in the following manner:

1. Such a request was made in writing;
2. The request was addressed to the Executive Chairman, Federal Inland Revenue Service, for the attention of Head, Transfer Pricing;
3. The request was submitted to the relevant Transfer Pricing office before the due date of compliance indicated on a notice;
4. The taxpayer showed good cause for requesting the extension.

• CONDITIONS FOR GRANTING EXTENSION OF TIME

The Service shall convey its approval or refusal of a request for extension of time to the taxpayer in writing. In granting a request for extension of time, the FIRS shall take the followings into consideration:

1. The death or serious illness of a key personnel such as the managing director, a director responsible for transfer pricing matters, company secretary, relevant transfer pricing desk officer or any other person, or a close relative of such personnel in the company whose inputs are critical to compliance with a notice; A close relative includes spouse, children, siblings or parents of an individual or of a spouse.
2.  Where the company experienced a fire or natural disaster that seriously affects its operations during the relevant period;
3. Where the information required is located or the person to attend a meeting is resident outside Nigeria (this does not cover notice for submission of TP Documentation)
4. Civil unrest restricting free public movements
5. public holidays occurring during the period of the notice
6. Any other genuine incident preventing the company from complying with the notice.
7. The company shall provide verifiable evidence to support its claims.
8. No more than two requests for extension of time shall be granted by the Service in respect of a particular notice.

• Timing of Requests for Extension

Requests by a taxpayer for the extension of time within which to comply with a notice issued by the Service must be received as follows:

1. a) in the case of a notice for the submission of TP documentation or notifying the taxpayer of a field visit, a request for extension of time must be received by the Service, at least, ten working days before the due date of compliance;
2. b) In the case of notice requesting for additional information or inviting the taxpayer to attend a meeting, which notice was delivered to the taxpayer ten or more working days before the due date of compliance, a request for extension of time must be received by the Service not later than five working days before the due date of compliance
3. c) In the case of notice requesting for additional information or inviting the taxpayer to attend a meeting, which notice was delivered to the taxpayer less than ten working days before the due date of compliance, a request for the extension of time must be received by the Service not later than two working days before the due date of compliance with the notice.

• The Language of Transfer Pricing Documentation

The language of the documentation shall be English language. However, where a taxpayer seeks to submit documentation in a language other than English language, such taxpayer shall also provide the English translation at its own expense.

• Update of Transfer Pricing Documentation

The Transfer Pricing Documentation should be reviewed and updated annually in order to determine whether functional and economic analyses are still accurate and relevant; and to confirm the validity of the applied transfer pricing methodology.

• Acceptability of Documentation

To ensure the acceptability of the contemporaneous transfer pricing documentation, reasonable efforts must be made to:

1. Undertake a transfer pricing analysis to ascertain that transfer prices comply with the arm’s length principle and reflect commercially realistic outcomes for all controlled transactions.
2. Maintain documents that are applicable to the circumstances; and the taxpayer must be prepared to provide additional information or documentation not previously provided, but which may be considered relevant for the determination of the arm’s length price.
3. Prepare the documentation in accordance with the TP Regulations, CBC Regulations, CBC Guidelines and these Guidelines.
4. Implement and review the arm’s length transfer pricing policies and redesign the transfer pricing policy to accommodate any changes in the business environment.
5. Avoid vague, irrelevant or inadequately-founded information.
6. Consistently apply coherent and transparent approach in identifying comparable uncontrolled transactions.
7. Provide detailed analysis of functions, assets, risks, market conditions and business strategies.
8. Apply a transfer pricing method in accordance with the Regulations.
9. Ensure that the factual, economic and empirical representations in transfer pricing documentation are group, company, product and market specific.
10. Ensure that the transfer pricing documentation is accurate and precise, and matches the accounting, financial and benchmarked data or comparable.
11. Avoid preparing documentation which is of relatively limited use, incomplete and does not properly support the transactions.
12. Maintain adequate background documents and full records containing particulars about the factual assumptions and relevant factors that have been taken into account in working out the arm’s length price.
13. Exemptions from Contemporaneous TP Documentation

The FIRS is mindful that preparing TP documentation may result in substantial costs. Hence, FIRS does not expect taxpayers to prepare contemporaneous TP documentation under the following situations:

1. a) Where the total value of controlled transactions between the connected persons is less than three hundred million naira; provided that, where the Service deems it necessary, it may demand that relevant documentation shall be prepared and submitted to the Service not later than 90 days from the date of receipt of a notice from the Service;
2. b) Where the related party transactions are covered by an agreement under an APA. In such a situation, the taxpayer will keep relevant documents for the purpose of preparing the annual compliance report to demonstrate compliance with the terms of the agreement and the critical assumptions remain valid
3. c) Where the related party transactions are priced in accordance with the requirement of Nigerian statutory provisions, for example, prices regulated by statute
4. d) Any other situation mentioned in guidelines issued, from time to time, by the FIRS pursuant to regulation 22 of the Income Tax (Transfer Pricing) Regulations, 2018.

TRANSFER PRICING AUDIT

Transfer pricing audit is totally different from the normal taxation audit that is done. This is because it has to do with the review of transfer pricing returns and giving support to Transfer pricing documentation submitted by tax payers. This is done so that the relevant tax authority (FIRS) will be able to independently confirm the arm’s length nature of the related party transactions that are documented

Normally, in Nigeria for a transfer pricing audit to occur it would involve the FIRS (Tax auditor) to carry out an investigation of the transfer pricing documentation of the entity. When the related party transactions do not comply with the arm’s length principle, the transfer pricing regulations empowers the tax authority (FIRS) to make necessary and mandated adjustments to the arm’s length price which will yield to more tax liability for the tax payer. Whenever a tax payer is preparing for a transfer pricing audit, he or she is advised to carry out the following steps

1. Properly disclose all the related entity transaction
2. Comply with all the rules under the transfer pricing regulations
3. Engage the services of a consultant or a transfer pricing advisor very early
4. Ensure that all the required documents are ready for review
5. Prepare well in advance

Documents that the transfer pricing auditor may ask for includes:

1. Audited financial statements
2. Transfer Pricing documentation reports
3. Transfer pricing policy papers
4. Minutes of the annual general shareholders meeting
5. Corporate income tax returns
6. VAT and WHT documents returns on intercompany settlements
7. Legal agreements related to inter-company transactions

TRANSFER PRICING RETURNS

A company must ensure that its transfer pricing return is submitted with the tax payer’s income tax return and must include the following documentation

• Transfer pricing declaration and disclosure forms
• Audited financial statements
• Copy of income tax self-assessment
• Transfer pricing policy( with the first return)
• Tax computation with all schedules

CONCLUSION

With the dynamic landscape of Transfer Pricing in Nigeria which is very broad and expansive, tax payers need to be proactive and have specific strategies in place for ensuring compliance with the transfer pricing regulations. The new regulations introduces certain rules for calculating the price of inter-company transactions. Tax payers must take notice of how these certain new rule will affect them and their businesses and they must pay attention to the new penalty variations. It is very important and advisable that tax payers should ensure full compliance to transfer pricing and try to avoid any of these penalties by complying as at when due.  Attached to this articles are templates of documentation such as the Transfer pricing disclosure form and the Country by Country Reporting Notification

About the author

Onamakinde Dare Daniel is a highly motivated accountant with knowledge in Accounting, Taxation, Management, Audit, Costing and Research. He is keen on tax matters due to its ever dynamic nature.