Transfer Pricing In Nigeria: Are You Audit Ready?

As the 30 June Transfer Pricing (TP) returns filing deadline approaches, taxpayers and consultants are occupied with ensuring that their Related Party Transactions (RPTs) are well-documented, accurately disclosed and filing is completed on time to avoid administrative penalties (minimum of ₦10 million). Some taxpayers are also taking advantage of the waiver of penalties and regularising their TP compliance status by filing any outstanding TP returns and Country-by-Country Reporting (CbCR) notifications on the TaxPro Max platform (the Platform).

From experience, we have observed that after the June TP returns filing season, there is usually an increase in TP audits. This might be because taxpayers' TP returns form part of the information utilised by the Federal Inland Revenue Service (FIRS) for TP risk assessment, as the returns include information about the taxpayers' RPTs. Interestingly, in the last few weeks, we have noted an increase in the FIRS' TP audit drive,