The Nigerian Transfer Pricing (TP) Division of the Federal Inland Revenue Service (FIRS) has requested companies to submit copies of their Group’s Transfer Pricing Policy. Additional details of this request are included in the KPMG link for reference:
Although this request is directed towards a “Transfer Pricing Policy” the initiative is an indication of the focused transfer pricing objectives of developing countries, and heightened awareness for application of the “arm’s-length” principle. The initiative is interesting due to the fact that the request is for a macro basis policy re: arm’s-length transactions between related entities, vs. a detailed template of information that may not have direct relevance on assessing risk from a transfer pricing perspective.
For Best Practices, this request invites multinationals to develop a general transfer pricing policy as an integral part of the Tax Risk Framework documentation, with potential application of a useful documentation tool to provide publicly as applicable.
In concert with the global emphasis on transfer pricing, Nigeria’s Federal Inland Revenue Service (FIRS) has issued new transfer pricing (TP) forms to be filed with the annual corporate income tax returns for 2013. Additionally, a new Transfer Pricing Division has been implemented following Best Practices by other tax administrations.
A Transfer Pricing Declaration form and Transfer Pricing Disclosure form are released to implement the TP regulations issued in 2012. The Transfer Pricing Declaration form includes information on the company’s directors and parent company, whereas the Transfer Pricing Disclosure form requests information about the company’s performance in relation to the group, in addition to disclosure of zero consideration goods, services, or intercompany loans.
The new disclosures highlight the trend for increased disclosures, for which there should be Best Practices implemented to ensure timely compliance and global consistency of tax reporting positions.
A KPMG summary is included as an insightful reference.