Transfer Pricing: The Nigerian Perspective
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Date
2014
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The Brooklyn Research and Publishing Institute
Abstract
Transfer pricing is a result of globalization and international trade. The tax
authorities in virtually all major countries are focused on transfer pricing as a
mechanism for preventing tax avoidance and as a means of ensuring that a
reasonable basis is employed to identify and extract economic benefits of business
operations in their jurisdictions. Over the last decade, Nigeria has experience
tremendous increase in the establishment of Multinational Companies. While this is
good for the development of the Nigerian economy, there is also the need for the
Government to ensure that prices of intra-company transactions are set at the right
prices and that transfer pricing is not employed as a tool of tax avoidance. To avoid
mis-pricing and potential loss of tax revenue, the Nigerian Government enacted the
Income Tax (Transfer Pricing) Regulations 2012 which adopted the OECD model
on Transfer Pricing. This article will therefore attempt to examine, appraise and
highlight the major provisions of the Income Tax (Transfer Pricing) Regulations
2012 and make appropriate recommendations. The significance of this article is that
it will educate corporate taxpayers in Nigeria and foreign investors as well as their
advisors on the new transfer pricing legislation.
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Citation
International Journal of Accounting and Taxation (2014) 2(2) pp. 23-38