The Nigerian transfer pricing rules are still relatively new, as detailed implementation of the transfer pricing law effectively began only with the release of the Transfer Pricing Regulations in 2012. Taxpayers must therefore make sure that they take steps to prepare their transfer pricing policy and documentation at an early stage if they are to effectively identify transfer pricing risk areas that could be scrutinized by the tax authorities during a tax audit.
Nigeria has been working with the UN in relation to capacity building within the tax administration, including a project involving the UN Committee of Experts on International Cooperation in Tax Matters aiming to establish a specific transfer pricing unit within the Nigerian tax authority. Nigeria is also working with other African countries through the African Tax Administration Forum to strengthen the expertise within the tax administration. With the introduction of the Transfer Pricing Regulations in Nigeria there will be increased scrutiny of transfer pricing during tax audits. Taxpayers must take this into account when operating in Nigeria.
