Overview of Nigeria’s Transfer Pricing Regulations (2018)

Overview of Nigeria's Transfer Pricing Regulations (2018)

Overview of Nigeria’s Transfer Pricing Regulations (2018). In today’s video, we’ll provide a comprehensive overview of the Income Tax (Transfer Pricing) Regulations 2018.

We’ll explore exactly what these regulations entail by highlighting their objectives, significance, and their role in shaping Nigeria’s tax landscape. Whether you’re a multinational enterprise, a tax professional, or simply curious about how global tax practices affect local economies, this video is for you.

So, buckle up! Key Points Covered:

1.Introduction to Transfer Pricing Regulations 2018:

  • The Federal Inland Revenue Service (FIRS) introduced these regulations effective for financial years starting after March 12, 2018.
  • They replace the 2012 guidelines and incorporate updates from the OECD’s Transfer Pricing Guidelines (TPG) and the African Tax Administration Forum’s (ATAF) Suggested Approach to drafting TP legislation.

2.Significance of OECD Guidelines:

  • Developed to assist Multinational Enterprises (MNEs) and Tax Administrators.
  • Ensure consistency among countries and avoid double taxation.
  • The latest 2017 edition includes new guidance on selecting appropriate transfer pricing methods and addresses business restructurings.

3.Objectives and Importance:

  • Secure the appropriate tax base for each jurisdiction.
  • Avoid double taxation and minimize conflicts between tax administrations.
  • Promote international trade and investment.

Transfer Pricing Regulation 2018 in Nigeria: Roles of Taxpayers, Professional and FIRS

4.Impact on Taxpayers and Administrations:

  • Transfer pricing determines the income, expenses, and taxable profits of associated enterprises in different tax jurisdictions.
  • Emphasizes the importance of the arm’s length principle in transfer pricing analysis.

5.Country-by-Country Reporting (CbCR):

  • Introduced by FIRS in January 2018 as part of the Base Erosion and Profit Shifting (BEPS) project.
  • Aims to enhance tax disclosure and provide tax authorities with better tools to assess international tax avoidance risks.

Transfer Pricing Regulation 2018 in Nigeria: Roles of Taxpayers, Professional and FIRS

6.Legal Framework:

  • Details on the Purpose, Objective, and Scope of the Income Tax (Transfer Pricing) Regulations, 2018.
  • Covers various tax acts including Personal Income Tax, Companies Income Tax, Petroleum Profits Tax, Capital Gains Tax, and Value Added Tax.

7. Purpose and Objectives of the Regulations:

  • Ensure Nigeria taxes economic activities appropriately.
  • Provide tools to fight tax evasion. Reduce the risk of economic double taxation.
  • Level the playing field for both multinational and independent enterprises.
  • Provide certainty of transfer pricing treatment in Nigeria.

Watch the full video to get a detailed understanding of the Income Tax (Transfer Pricing) Regulations 2018 and how they impact your business operations in Nigeria.

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Overview of Nigeria’s Transfer Pricing Regulations (2018)