Safe Harbour Rules And The Nigerian Transfer Pricing Regulation – A Critical Examination

The transfer pricing regulations cover all transactions between 'connected taxable persons' that could impact the profit or loss position of any of the parties including transactions that entail the use of intangible assets, provision of goods or services, loans, lease or sale of assets; licensing, transfer, procurement etc. 'Connected taxable persons' can broadly be defined as companies or entities operating in Nigeria and having common control, management or ownership with other companies or who participate directly or indirectly in the management, control or capital of another company or persons otherwise connected with another person.¹ Transfer pricing rules require transactions between connected taxable persons to be in accordance with the arm's-length principle and consistent with the arms-length principle stipulated under Article 9 of the United Nations (UN) and Organisation for Economic Co-operation and Development (OECD) Model Tax Conventions on Income and