Nigeria: Transfer Pricing

Intra-group financing arrangement, particularly interest-bearing loan arrangements, have long been one of the foremost tax planning strategies adopted by multinational enterprises to shift profits from one jurisdiction to another. As a result, tax authorities globally tend to scrutinize these arrangements under transfer pricing rules to ensure that the terms of these transactions are at arm’s length.

Nigeria’s startup ecosystem has established itself as one of the most dynamic in Africa. Despite global headwinds in venture capital markets, funding into African technology companies remained significant in 2024, with Partech reporting that US$3.2 billion was invested across the continent, much of it concentrated in Lagos, a city that now ranks among the leading global hubs for technology talent and entrepreneurial activity.

Management fees are a common feature of intra-group arrangements within multinational enterprises (MNEs), reflecting charges for services provided by a parent company or related entity to its subsidiaries. These services are typically designed to promote operational efficiency, ensure consistency in group-wide policies, and allow group entities to benefit from centralized expertise.

The four bills, which form the backbone of Nigeria's ongoing tax reform efforts, have been passed by the House of Representatives and are awaiting passage by the Senate.

The transfer pricing regulations cover all transactions between ‘connected taxable persons' that could impact the profit or loss position of any of the parties...

Intangibles are an integral part of the value creation process of businesses and a fundamental part of their continuing success.

GlaxoSmithKline (GSK) recently announced a formal exit from Nigeria, which generated a lot of emotions in the country. It was seen by many as a fall out of how the economy...

The Federal Inland Revenue Service (FIRS) has released guidelines to provide clarity regarding the nature and extent of inquiries related to desk examinations, tax audits, tax investigation...

A most ironic scenario played out on the 17th of August 2023 at the Tax Appeal Tribunal (Lagos Zone) ("TAT") when the TAT, a tribunal created under the Federal Inland Revenue Service (FIRS) Establishment Act 2007...