Seun Adu Profile picture
Aug 28, 2018 12 tweets 7 min read Twitter logo Read on Twitter
Breaking:@firsNigeria has published #Nigeria’s revised #TransferPricing Regulations (NTPR). The #NTPR is effective for basis periods commencing after 12 March 2018 and incorporates #BEPS outcomes and suggestions from @ATAFtax.
The #NTPR includes significant penalties for non-compliance (a) failure to file TP declaration = ₦10million + ₦10k/month (b) failure to file updated TP declaration/notification = ₦25k/day.
(c) failure to file TP disclosure = ₦10million or 1% of the value of related party transactions (RPT) not disclosed + ₦10,000/day (d) filing incorrect disclosure = ₦10million or 1% of the value of RPT incorrectly disclosed #NTPR.
(e) failure to file TP documentation upon request = ₦10million or 1% of the total value of RPTs + ₦10k/day (f) failure to furnish information upon request = 1% of the value of each RPT for which information relates + ₦10k/day #NTPR.
#NTPR follows @ATAFtax suggested approach and introduces a cap of 5% of EBITDA on tax deductibility of royalty payments. This is not consistent with the arm’s length principle. It also questionable if such a change can be made via Regulations.
#NTPR requires taxpayers to prepare #BEPS Master File and Local File as part of TP doc. Also, exempts taxpayers with total RPT values less than ₦300million from preparing TP doc. However, they must submit the TP doc within 90 days’ notice from @firsNigeria.
#NTPR suggests @firsNigeria will not automatically accept prices accepted for @CustomsNG customs valuation purposes. This could expose taxpayers to double taxation.
The #NTPR gives effect to the anti-avoidance provisions in CITA, PITA, PPTA, CGTA and VATA. This suggests @firsNigeria may be signaling its intention to look into the VAT impact of TP adjustments. Does VATA have arm’s length provisions?
#NTPR expands definition of persons covered under the regulations (connected persons) to include persons considered related or associated in VATA, and @OECDtax and @UN TP guidelines.
@firsNigeria will publish specific guidelines on safe harbors from time-to-time #NTPR.
Head of @firsNigeria TP unit will now have the power to make decision on whether a case/assessment should be referred to the Decision Review Panel. #NTPR. Taxpayer will no longer have this right.
#NTPR introduces provision similar to #BEPS provision on capital-rich, low-function companies.

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