This article was published in The Guardian Newspaper on 2 September 2020. Below is an excerpt from the article.
There are exceptional circumstances that could cause businesses to deviate from their transfer pricing policies. The downturn in both the global and Nigerian economies due to the impact of COVID-19 will have serious implications for many multinational businesses operating in Nigeria, especially in the areas of transfer pricing policy implementation and documentation.
Predictably, businesses in Nigeria have been affected by the COVID-19 pandemic as economic activities in the country have reduced significantly since March 2020, when a temporary shutdown of the economy was announced by the Federal Government to curtail the spread of the virus. The tax authorities will, in the future, require businesses that are adversely affected by COVID-19 to explain losses or decreased profits for the relevant years.
It is, therefore, necessary for businesses to start examining the impact of COVID-19 on various aspects of their operations in order to show that the transfer prices adopted and other transactional and commercial decisions taken were in line with the arm’s length principle.