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Application of the new transfer pricing legislation

The Nigerian Federal Inland Revenue Service (FIRS) has communicated to the Organisation of Economic Cooperation and Development’s (OECD) Country-By-Country (CbC) reporting group that it has signed CbC reporting regulations. This was announced by the African Tax Administration Forum (ATAF) on 21 January 2018. The regulations form part of the reporting implementation package set out by Action 13 of the Base Erosion and Profit Shifting (BEPS) process.

At the time of this alert, the regulations have not been officially gazetted. It is expected, however, that the first fiscal period for which local filling applies will start on or after 1 January 2017.

Details of the CbC reporting regulations will be provided when they are published.

What is CbC reporting?

The BEPS Action Plan, adopted by the OECD and G20 countries in 2013, recognised that enhancing transparency for tax administrations is a crucial aspect for tackling the BEPS problem. This can be addressed by providing them with adequate information to assess high-level transfer pricing and other BEPS-related risks.

The BEPS Action 13 report (Transfer Pricing Documentation and Country-by-Country Reporting) provides a template for multinational enterprises (MNEs) to disclose information annually regarding each tax jurisdiction where the MNE operates. This report is called the Country-by-Country (CbC) Report.

As per the standard CbC legislation, multinationals whose consolidated turnover in the previous financial year exceeds EUR 750 million are subject to these rules.

Next steps to be taken

Taxpayers that are part of MNE groups and have operations in Nigeria should be aware of these regulations and prepare to comply with them.

For more information, please contact one of the following:

–       Michael Hewson, Director, e-mail:, cell: +27 82 345 1212

–       Valdis Leikus, Associate Director, e-mail:, cell: +27 76 867 1478