International Journal of Accounting and Taxation

Transfer Pricing: The Nigerian Perspective
Ahmed OlatunjiIsau

Abstract
Transfer pricing is a result of globalization and international trade. The tax authorities in virtually all major countries are focused on transfer pricing as a mechanism for preventing tax avoidance and as a means of ensuring that a reasonable basis is employed to identify and extract economic benefits of business operations in their jurisdictions. Over the last decade, Nigeria has experience tremendous increase in the establishment of Multinational Companies. While this is good for the development of the Nigerian economy, there is also the need for the Government to ensure that prices of intra-company transactions are set at the right prices and that transfer pricing is not employed as a tool of tax avoidance. To avoid mis-pricing and potential loss of tax revenue, the Nigerian Government enacted the Income Tax (Transfer Pricing) Regulations 2012 which adopted the OECD model on Transfer Pricing. This article will therefore attempt to examine, appraise and highlightthe major provisions of the Income Tax (Transfer Pricing) Regulations 2012 and make appropriate recommendations. The significance of this article is that it will educate corporate taxpayers in Nigeria and foreign investors as well as their advisors on the new transfer pricing legislation.

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