Ernst and Young, EY, has emphasized the need for corporate entities to abide by the new income tax regulations, 2018, released by the Federal Inland Revenue Service (FIRS), as non-compliance attracts heavy penalty.
In order to avert penalty, EY stated that companies should ensure that they, not only prepare and file the required documents, but also do so accurately to avoid imposition of penalties.
Speaking on the likely implications of the new regulations, EY Head of Tax Services, Akinbiyi Abudu, stated that significant penalties for non-compliance and other provisions which are far-reaching have been included in the new regulations, hence companies are encouraged to take the necessary steps to proactively examine the potential gaps that may arise from full implementation of the new Regulations.
Continuing, Akinbiyi stated: "Considering the magnitude of the penalties that could arise in the event of default in filing after the due date or incorrect disclosures, it is important that companies ensure they not only prepare and file the required documents, but also do so accurately to avoid imposition of penalties."
He said EY has taken up the challenge to sensitize industry stakeholders, clients and non-clients, regarding the new Transfer Pricing regulations and the key changes brought about by the development.
The new regulations are the first to be made on the Transfer Pricing, TP, regulations since its introduction in August 2012.
The new regulations replaces the Income Tax (Transfer Pricing) Regulations, 2012 (old regulations) and shall apply to financial years beginning after 12 March 2018.
EY's Head of Tax Services, Akinbiyi Abudu, notes that the company's 'Breakfast knowledge sharing session' is aimed at addressing all the enquiries pertaining to the 2018 Transfer Pricing regulations and the implications for taxpayers."
According to him the session, which will be held next week in Lagos is being organized as part of EY's commitment in supporting multinational enterprises to better understand their compliance obligations in Nigeria and avoid penalties for non-compliance.
According to Abudu, the introduction of the new regulations represents a significant step taken by the FIRS towards ensuring increased compliance and implementation of the arm's length principle in a manner consistent with the Organization for Economic Co-operation and Development TP Guidelines for Multinational Enterprises and Tax Administrations and the United Nations Practical Manual on Transfer Pricing for Developing Countries, both updated in 2017.