These Guidelines are issued to provide guidance to the general public and, in particular, connected taxable persons, otherwise known as related parties or associated enterprises, all taxpayers, taxpayers’ representatives or advisers, all other stakeholders and tax officers on Transfer Pricing Documentation requirements in Nigeria.
1.1 Sections 15 of the Personal Income Tax Act, 22 of the Companies Income Tax Act, 17 of the Petroleum Profits Tax Act and 20 of the Capital Gains Tax Act empowers the Federal Inland Revenue Service (“FIRS” or “the Service”) to disregard any disposition or make necessary adjustments if transactions between connected persons appear to be artificial or fictitious - that is, not at arm’s length.
1.2 In order to give effect to the above provisions, the Service published the Income Tax (Transfer Pricing) Regulations, 2018 pursuant to section 61 of the Federal Inland Revenue Service (Establishment) Act No. 13 of 2007.
1.3 Regulation 16 of the Income Tax (Transfer Pricing) Regulations, 2018 requires connected taxable persons to record, in writing or on any other electronic device or medium, sufficient information or data with an analysis of such information and data to verify that the pricing of controlled transactions are consistent with the arm’s length principle.
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