FIRS Publishes Nigeria’s Revised Transfer Pricing Regulations


Tuesday August 28, 2018   05:24PM / By Seun Adu @ATAFtax

Federal Inland Revenue Service has published Nigeria’s revised Transfer Pricing Regulations (NTPR). The NTPR is effective for basis periods commencing after 12 March 2018 and

incorporates BEPS outcomes and suggestions from The African Tax Administration Forum.


The NTPR includes significant penalties for non-compliance

(a) failure to file TP declaration = 10million + 10,000/month

(b) failure to file updated TP declaration/notification = 25,000/day.

(c) failure to file TP disclosure = 10million or 1% of the value of related party transactions (RPT) not disclosed + 10,000/day

(d) filing incorrect disclosure = 10million or 1% of the value of RPT incorrectly disclosed.

(e) failure to file TP documentation upon request = 10million or 1% of the total value of RPTs + 10,000/day (f) failure to furnish information upon request = 1% of the value of each RPT for which information relates + 10,000/day


NTPR follows The African Tax Administration Forum suggested approach and introduces a cap of 5% of EBITDA on tax deductibility of royalty payments. This is not consistent with the arm’s length principle. It also questionable if such a change can be made via Regulations.

NTPR requires taxpayers to prepare BEPS Master File and Local File as part of TP document.


Also, exempts taxpayers with total RPT values less than 300million from preparing TP document. However, they must submit the TP document within 90 days’ notice from Federal Inland Revenue Service


NTPR suggests FIRS will not automatically accept prices accepted for Nigeria customs valuation purposes. This could expose taxpayers to double taxation.


The NTPR gives effect to the anti-avoidance provisions in CITA, PITA, PPTA, CGTA and VATA. This suggests FIRS may be signaling its intention to look into the VAT impact of TP adjustments.


NTPR expands definition of persons covered under the regulations (connected persons) to include persons considered related or associated in VATA, and OECD tax and UN TP guidelines.


FIRS will publish specific guidelines on safe harbors from time-to-time


Head of FIRS TP unit will now have the power to make decision on whether a case/assessment should be referred to the Decision Review Panel. Taxpayer will no longer have this right.


NTPR introduces provision similar to BEPS provision on capital-rich, low-function companies.


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Related News on Transfer Pricing

1.       Transfer-Pricing-Country-by-Country-Reporting | KPMG | NGJun 2018

2.      Nigeria Transfer Pricing Regulations – A Review of the ContendingMay 2018

3.      The OECD Releases 2017 Revised Transfer Pricing Guidelines - Tax Jul 2017

4.      firs-releases-revised-transfer-pricing-forms | KPMG | NGJan 2017

5.      FIRS issues new transfer pricing forms effective ... - Tax Matters NigeriaDec 2016

6.      Nigerian Tax Authorities issue transfer pricing guidance and forms - EYMar 2014

7.      Transfer Pricing Compliance in Nigeria: What Next - Deloitte



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