FIRS Update: Transfer Pricing and Country-By-Country Tax Filings Now Integrated on TaxPro-Max Platform

Filing your company taxes just got easier. The Federal Inland Revenue Services (FIRS) has moved the Transfer Pricing Returns (TP Returns) and the Country by Country Reporting (CbCR) notifications filing to TaxPro-Max, the same platform for filing your Income and Value Added Taxes. Previously, you would have filed your TP Returns and CbCR on the Transfer Pricing Platform (E-TP platform).?

With this upgrade, you can easily view all your tax information on one dashboard, and your login credentials will remain the same.?

If you have already filed your TP Returns and CbCR on the E-TP platform, you do not need to do so again on the new TaxPro-Max platform. But in the future, you will use the new platform.?

How do you know if you are supposed to pay these taxes??

According to FIRS, Transfer Pricing (TP) involves setting appropriate prices for goods, services, loans and intangibles supplied or transferred by one enterprise to another, both of them being members of the same group or otherwise connected. This means that if a parent company or group has two subsidiaries and those subsidiaries want to transact with each other, the trade price must be fair and similar to what an outside customer would pay.?

To file your TP Returns, you must fill out the Transfer Pricing Disclosure and Transfer Pricing Declaration forms and disclose all your transactions with close parties locally and abroad. You have up to 6 months after your year-end to file this tax. For example, if your year-end is in June, you must file on/before December of the same year.?

For the Country by Country Report (CbCR), this is for groups/conglomerates with a revenue of at least €750m. One of your subsidiaries, the Constituent Entity (CE), sends a notification form to FIRS on/before your year-end. This form informs FIRS that you will file the CbCR report for your subsidiary.?

According to this PwC article, the CbCR report provides certain financial information, including your revenues, profit or loss before income tax, income tax paid, income tax accrued, stated capital, number of employees, retained earnings, and tangible assets about each subsidiary. As the parent company, you must file this report within 12 months of your year-end.

Failure to fill one of the forms mentioned above on time can attract a fine as high as ?10m or more and a ?10,000 fee for each day one is late.?

What does this new system mean for me??

Because of the migration to TaxPro Max, you now have until June 30th, 2024, to file your TP Returns and CbCR Notification. So make sure to do so to avoid paying the penalty.?

You can also find more information about FIRS’ public notice here.

If you have any inquiries or require further information about these recent policy adjustments and their implications for your ongoing audit exercises or tax liabilities, please get in touch with us today at [email protected]