Recently, the Federal Inland Revenue Service (FIRS) issued the Income Tax (Transfer Pricing) Regulations, 2018 (the 2018 TP Regulations), which replaced the Income Tax (Transfer Pricing) Regulations, 2012.
The 2018 TP Regulations; which has a commencement date of 12 March 2018, introduced additional compliance obligations for taxpayers and enhanced administrative penalties for any non-compliance with the obligations.
In its Public Notice released on 3 October 2018, FIRS has granted taxpayers up to 31 December 2018 to ensure their full compliance with all pending Transfer Pricing (TP) obligations – filing of TP declarations, disclosures and submission of TP documentation, etc. According to FIRS, it intends to start imposing the increased administrative penalties on erring taxpayers after 31 December 2018.
The release of the Public Notice by FIRS is commendable and is seen as a step in the right direction, as it helps in clearing some of the uncertainties taxpayers have on the administrative procedures for implementation of the 2018 TP Regulations.
It is expected that taxpayers will make the best use of this opportunity given by FIRS and ensure full compliance with the obligations created by the 2018 TP Regulations.