12 September 2018
In the exercise of its rule-making authority under its enabling legislation,1
the Board of the Federal
Inland Revenue Service (“FIRS”) has issued the Income Tax (Transfer Pricing) Regulations 2018
(the “2018 Regulations”). The 2018 Regulations revokes and replaces the Income Tax (Transfer
Pricing) Regulations 2012 (the “2012 Regulations”) which hitherto governed regulations over
transfer pricing in Nigeria. The 2018 Regulations fairly incorporate the current international trends
in the regulation of transfer pricing and is designed to guarantee greater compliance with the
transfer pricing regime in Nigeria. This would in turn increase Nigeria’s tax revenue and reduce tax
evasion occasioned through the underpricing or overpricing of related party transactions.
This client alert is aimed at highlighting the headline changes introduced by the 2018 Regulations.
In line with our tradition of keeping our clients apprised of any changes in the law that may impact
on their businesses and commercial undertakings, we have provided summaries of the key changes
introduced by the new transfer pricing regime.