The Federal Inland Revenue Service (FIRS) has unveiled comprehensive guidelines for Advance Pricing Agreements (APAs), a significant development for multinational companies operating in Nigeria.
The new guidelines outline a framework for companies to negotiate transfer pricing arrangements in advance with tax authorities. Eligible companies can apply for unilateral, bilateral, or multilateral APAs, with specific financial thresholds for qualification.
To be eligible, companies must have controlled transactions valued at least $10 million for a single transaction or $50 million for a group of transactions annually. The process involves a non-refundable application fee of $20,000, with potential additional costs for processing.
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APAs will be valid for a maximum of three years, with the possibility of applying the methodology to three previous years. The agreement requires annual compliance reports and continuous monitoring to ensure adherence to the original terms.
FIRS aims to reduce uncertainty for multinational enterprises and optimise resources for both taxpayers and tax authorities.
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