ARTICLE · 12 DECEMBER 2019

15 Insights On Transfer Pricing In Nigeria

Taxaide Professional Services Ltd

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Thereby reducing the tax payable to the Revenue Authority. This action is referred to as "Profit Shifting.

NigeriaTax

Abimbola Oyebowale

1. What is Transfer Pricing?

Transfer Pricing (TP) is described as the method by which connected organisations or related parties price goods, assets, services, intellectual properties, loans, guarantees and other commercial transactions between them. The The prices paid for goods or services delivered or received have a direct impact on the profits of the seller and buyer and by implication, on tax. Unlike transactions between independent parties, related parties tend to place less emphasis on ensuring that the price charged for a transaction reflects market circumstances.

2. Why is the Revenue Authority (Federal Inland Revenue Service "FIRS")? concerned about Transfer Pricing?

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