Nigeria: Transfer pricing awareness survey (KPMG report)

Nigeria: Transfer pricing awareness survey, KPMG report

The KPMG member firm in Nigeria conducted in 2020 a survey to gauge the effects of the coronavirus (COVID-19) pandemic on taxpayers’ businesses and specifically concerning their awareness of transfer pricing compliance requirements, risk assessment, and audit experiences.

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A report based on the feedback to the survey from 46 respondents, representing major industry sectors, indicates there is a consistent level of compliance with the relevant transfer pricing regulations. Concerning the “Income Tax (Country-by Country Reporting) Regulations,” taxpayer responses to the survey reveal a high level of awareness and compliance, as taxpayers in Nigeria are quickly embracing changes in the ever-evolving transfer pricing landscape.

The survey reveals that most taxpayers have put in place measures to deal with the effects of COVID-19, with revenue and cashflows being the most affected aspects of their business operations. However, while a significant number of the respondents had neither ongoing nor completed transfer pricing audits, the results of the survey reveal that there has been an upsurge in the number of information and documents requests (IDRs) (which generally precede a transfer pricing audit exercise) issued to taxpayers between the time when the survey was completed and published—due to the Federal Inland Revenue Service (FIRS) treating transfer pricing audits as a mechanism to enforce compliance and increase revenue collection.

Read an April 2021 report [PDF 10 MB] prepared by the KPMG member firm in Nigeria

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