In this article, we have highlighted factors to consider in
preparation for a transfer pricing audit.
Since the introduction of the Income Tax (Transfer Pricing)
Regulations 2018 in Nigeria, it is fair to say that companies have
started paying increasing attention to complying with the transfer
pricing regulations. Ever since, there has only been a handful of
Transfer Pricing (TP) audits carried out by the tax authority in
Nigeria. This is because the 2018 TP regulations is relatively new
and, as such, the FIRS is still collating and analyzing the
plethora of TP returns submitted by affected taxpayers.
The Federal Inland Revenue Service (FIRS), which had temporarily
postponed ongoing TP audits during the pandemic, lost no time in
resuming the audit as soon as the lockdown was lifted during the
last quarter of 2020. In addition to the ongoing TP audit on
related parties' transactions, the tendency that more
taxpayers would be chosen for a TP desk review/TP audit is
