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We have never stopped believing in possibilities since 1960. We have kept our hopes and dreams alive even through the worst adversities. We have fought defeat and stayed friends with victory. Our differences may have been our enemy yet we choose to take it as different identity surviving under ... Read More
https://www.youtube.com/watch?v=4eFVUx8VgHo Thank God its Friday. Today is the last Friday of the month. Relax with our "thank God its Friday video" by reading our latest Blog post. Its Educative, Inspiring and Motivating. Have a fulfilled and Lovely Weekend.
  Have you heard of this great opportunity? It’s a unique offer that no one must miss especially auditors, accountants, HR and finance managers. . Its International Financial Reporting Standards (IFRS)Jamboree. PML Advisory is a growing advisory & consulting business in Nigeria. The leaders are one of pioneers of IFRS in Nigeria. ... Read More
 Changes in IFRS for SMEs  The International Accounting Standards Board (IASB) is currently working on changes to the IFRS for Small and Medium Enterprises (SMEs), which are expected to affect over 15 sections of International Financial Reporting ... Read More
Did you miss our blogs this week? You can ease up your weekend by watching our videos and reading interesting articles on PML Advisory Website. Log on NOW!!! https://www.youtube.com/watch?v=md1n__H2sfg
The human body works like every business system, how? For starters it is made up of different systems that work independently but are also integrated. The brain like the CEO runs the activities of the body. There is information flow, through the blood. Just as it is necessary for ... Read More
Qualifications and Education Requirements • Bachelor’s Degree (ideally a degree in marketing, finance or accounting). Preferred Skills, Qualifications and Other Requirements • Strong leadership skills. • Desire to learn, grow and contribute creative ideas and make the effort to achieve the team's goals. • Ability to work independently without supervision yet at the same ... Read More
Meeting up with organizations vision can be achieved by having a good business plan which enhances profit making. Your business would be greatly affected by a competitive environment because you have created an uncontested market space by having a good business plan. Business plan is a formal statement of ... Read More
Amazing video we got here!!!! You can ease up your weekend by watching our videos and reading interesting articles on pml advisory website. https://www.youtube.com/watch?v=Y65ca099A24
Social media networks were a novelty 5 years ago, but today their importance is no longer debated. Yes, businesses have definitely realized the power of social media and accepted that social media marketing has to be part of their marketing and PR mix. In Social Media Examiner's 2013 End of ... Read More

CELEBRATION OF NIGERIA’S 54TH INDEPENDENCE

Implications of Non-Compliance under the revised Income Tax (Transfer Pricing) Regulations, 2018  The Federal Inland Revenue Service (“FIRS” or the “Service”) recently published the revised Income Tax (Transfer Pricing) Regulations, 2018 (the “Regulations”) with commencement date on 21st day of March, 2018 and will be applied to the basis periods of the connected persons beginning after the effective date of the Regulation. The Regulation repeal the Income Tax (Transfer Pricing) Regulations, 2012. This exercise is in line with the power conferred with the Service by the provision of Section 61 of the Federal Inland Revenue Service (Establishment) Act, 2007   This articles mainly examined the implication of non-compliance with the Regulations and the need for Multinational Enterprises (“MNEs”) and Local Entities (“LEs”) with connected persons and controlled transaction in their company to proactively install compliance measures so as not to negatively impact their business.   The taxation landscape is rapidly changing globally and Nigeria tax system is not an exception, taxation is indeed not a business as usual and It has been proved that the first phase of tax planning is tax compliance (i.e. to comply with the relevant provisions of the legislations and regulations) while order measures proffered still need to be complied with, this is to avert or mitigate the cost of non-compliance.   Transfer pricing generally called “TP” has also been the major interest of the FIRS in pursuit of revenue generation. TP is not illegal. What is illegal is transfer mispricing, also well-known as transfer pricing manipulation. Transfer pricing is one of the most imperative issues in international tax. Hence, the affected entities are expected to make TP a major area of priority.   The new Regulations substitute the term “connected taxable person” with “connected person” which means persons are deemed connected where one person has the ability to control or influence the other person in making financial, commercial or operational decisions, or there is a third person who has the ability to control or influence both persons in making financial, commercial or operational decisions. While “controlled transaction” means a commercial or financial transaction between connected persons.   The TP Regulations expand the scope of application, which includes Person Income Tax Act, Company Income Tax Act, Petroleum Profit Tax Act, Capital Gain Tax Act, and Value Added Tax Act, this shall be applied to controlled transaction between connected persons.   The followings are the non-compliance issues a connected person with controlled transactions may encounter;  
Regulations      TP Offense (Default)  Administrative Penalties  Comments
                      13   Failure to file TP declaration form within 18 months after the date of incorporation or 6 months after the end of the accounting year, whichever is earlier.       Failure to file updated TP declaration form or provide notification about director of the connected person within 6 months after the end of the accounting year in which the event occurred.     Upon default, shall be liable to pay N10,000,000 for the first month of default, and   N10,000 for every day in which the failure continues.     Upon default, shall be liable to pay N25,000 for every day in which the failure continues.   New business incorporated with group structure or arrangement with connected person whether resident in Nigeria or elsewhere are required to make declaration.     Existing business are required to make an updated declaration upon merger or sale or acquisition up to 20% or with changes in the structure, arrangement or circumstances that influences connected or not connected to the entity. Also, where there is an appointment or retirement of a director of the connected person.  
                14               Failure to file TP disclosure form (Non-disclosure of TP transactions) within 6 months after the end of each year or 18 months after the date of incorporation, whichever is earlier.             Incorrect disclosure of controlled transactions.   Upon default, shall be liable to pay the higher of: N10,000,000 or 1% of the value of the controlled transaction not disclosed, for the first month of default, and   N10,000 for every day in which the failure continues.     Upon default, shall be liable to pay the higher of: N10,000,000 or 1% of the value of the controlled transactions incorrectly disclosed.     Connected person shall without notice or demand make annual disclosure (voluntary disclosure) of transactions for each year of assessment as may be prescribed by the FIRS from time to time.           Connected persons are expected to disclose their controlled transaction to reflect the arm’s length principle.
          16           Failure to file TP document within 21 days of receiving a request (Notice) from the Service.               Shall be liable to pay the higher of: N10,000,000 or 1% of the total value of all controlled transactions, and   N10,000 for every day in which the failure continues.   Connected person are required to prepare and maintain master file and local file in the course of controlled transaction as part of their TP documentation as specified in the schedule to the Regulations.  
          17           Failure to furnish information or document within the required time specified in a notice.               Shall be liable to pay 1% of the value of each controlled transactions for which the information or document was requested, in addition to   N10,000 for each day in which the failure continues   It is pertinent to note that connected person with the value of controlled transactions of less than N300,000,000 may choose not to maintain TP documentation as specified in Regulation 16. However, upon request, they must prepare and file TP documentation within the 90 days of receipt of such notice.  
    Where the connected persons partake in transfer mispricing issues (i.e. TP manipulation) regarding controlled transactions, the FIRS may notwithstanding the aforesaid administrative penalty, carry out TP adjustment on such controlled transaction based on transaction by transaction basis to reflect the arm’s length principle. Hence, penalty and interest may apply on the resultant adjusted amount.   It is imperative to note that, the above TP offenses stipulated under Regulation 13, 14, 16 and 17 are subject to the provision of Regulation 15 of the Regulations which state that the connected person may apply in writing for extension of period for making declarations or disclosure within which to comply with the provisions of regulation provided that, the application must have being submitted before the expiration of the time stipulated and the applicant must shows good cause for its inability to comply with the stipulated submission dates. Where the taxable person (applicant) fails to meet with the extended submission date (agreed date), the administrative penalty shall apply upon default as if no extension of period was granted.   Conclusion The revised Regulations bring to light those grail areas in the old Regulation, related entities are expected to perform TP evaluation  to enable them determine the non-compliance area of emphasis to their business while those with low TP compliance should update their compliance status as the cost may grossly impact their business. We belief, the FIRS will issue circular to this effect to provide guideline on the implementation of the Regulations.   For further information or clarification on the foregoing, please contact: Christopher Ugwunwa ([email protected]) or Abiola Fajimi ([email protected]) with the subject: Implication of Non-Compliance under the Revised TP Regulation.