Transfer Pricing Regulations and Tax Compliance among Nigerian Companies

  • Gbadegesin Babatunde ADEYEYE University of Lagos
  • Abdul-Lateef Kolapo BALE Federal Inland Revenue Service, Nigeria
  • Oluwamayowa Olalekan Iredele Department of Accounting, University of Lagos, Akoka, Nigeria
  • Adeyemi Mobolaji ADEYEYE Department of Accounting College of Applied Social Sciences Lagos State University of Technology, Lagos, Nigeria
Keywords: Tax authority, Tax evasion, Tax fraud,, Tax policy, Transfer pricing


This study investigates the effectiveness of transfer pricing regulations of 2018 and tax compliance among Nigerian companies. The main objective of the study is to examine how effective is transfer pricing regulations in curbing tax evasion through transfer pricing scheme. The population of the study is the staff of Federal Inland Revenue service in Lagos State who are involved in the operation and implementation of transfer pricing regulations. The sample of the study was 151 staff of Federal Inland Revenue service in Lagos randomly selected from the population. The study adopted survey research design, using a structured questionnaire to obtain primary data. The data were analysed using descriptive and inferential statistical techniques. The descriptive statistics used include percentages, mean, minimum, maximum values and standard deviation. The inferential statistical technique used was One sample t-test. A 5-point measurement scale was used to gauge the effectiveness of the transfer pricing regulations. Inferences were deduced at 5% level of significance. The result of the analysis indicates that transfer pricing regulations is effective in curbing tax evasion perpetrated through transfer pricing scheme. By way of recommendation, it was suggested that tax authorities should continue to reinvigorate their strategies in checkmating loopholes exploited by the taxpayers to perpetrate tax fraud through transfer pricing. Tax authorities must be trained appropriately from time to time on the various dimensions of the strategies used by unscrupulous taxpayers to evade and avoid tax; and how the impact of such strategies could be reduced to the barest minimum.


Adeyeye, G. B. (2013). The Impact of Taxpayers’ Perception of Good Governance on Voluntary Tax Compliance in Lagos State, Nigeria. Unpublished Thesis, Department of Accounting, University of Lagos, Nigeria.
Ajzen, I. (1991). The Theory of Planned Behaviour. Organisational behaviour and human decision processes, 50(2), 179-211.
Ajzen, I. & Fishbein, M. (1980). Understanding attitudes and predicting social behaviour. Englewood Cliffs, NJ: Prentice Hall.
Aka, G. (2022). Nigeria's Transfer Pricing Regulations - Key Steps to Annual Compliance. Retrieved from on 19/05/2022.
Akinleye, G., Olaoye, C., & Fajuyagbe, B. (2018). Effects of Transfer- Pricing Regulations and Compliance on Tax Administration in Nigeria. Acta Universitatis Danubius, 14(5), 86-97.
Blumberg, B., Cooper, D. R., & Schindler, P. S. (2005). Business Research Methods. Maidenhead: McGraw-Hill.
Bryman, A. (1989) Research Methods and Organisation Studies. London: Unwin Hyman.
Baridam, D. M. (2008). Research Methods in Administrative Sciences, Port Harcourt: Sheerbroke Associates.
Cecchini, M., Leitch, R., & Strobel, C. (2013). Multinational transfer pricing: A transaction cost and resource-based view. Journal of Accounting Literature, 31(1), 31–48.
Creswell, J. W. (2013). Qualitative inquiry and research design: Choosing among five approaches (3rd ed.). Thousand Oaks, CA: Sage Publications, Inc.
Dischinger, M., & Riedel, N. (2011). Corporate taxes and the location of intangible assets within multinational firms. Journal of Public Economics, 95(7–8), 691–707.
Dudar, O., Spengel, C., & Voget, J. (2015). The impact of taxes on bilateral royalty flows. ZEW-Centre for European Economic Research Discussion Paper, 15-52. Retrieved from on 26/17/2019.
Federal Inland Revenue Service, (2020). FIRS Annual Reports, 2020. Retrieved from
Federal Inland Revenue Service (2018). Guidelines on transfer pricing documentation. Abuja, Garki: FIRS.
Federal Republic of Nigeria Official Gazette (2018). Income Tax (Transfer Pricing) Regulations, 2018. Federal Government Printer, Lagos, Nigeria.
Gravelle, J. (2010). Tax havens: International tax avoidance and evasion. Economy, 88 (2), 288–307.
Grubert, H., & Mutti, J. (2017). Taxes, tariffs and transfer pricing in multinational corporate decision making. The Review of Economics and Statistics, 73(2), 285–293.
Grubert, H., Goodspeed, T., & Swenson, D. L. (2013). Explaining the low taxable income of foreign-controlled companies in the United States. In Studies in international taxation (pp. 237–276). University of Chicago Press.
Hines, J. R., & Rice, E. M. (1994). Fiscal Paradise: Foreign tax havens and American business. The Quarterly Journal of Economics, 109(1), 149–182.
Huizinga, P., & Laeven, K. (2008). International profit shifting within multinationals: A multi-dimensional perspective. Journal of Public Economics, 92(5–6), 1164–1182.
Jacob, J. (2016). Taxes and transfer pricing: Income shifting and the volume of intrafirm transfers. Journal of Accounting Research, 34(2), 301–312.
Korol, S. Y., Nykyforuk, O. I., Pelekh, U. V., Barabash, N. S. & Romashko, O. M. (2022). Transfer Pricing Documentation: Globalization and Regional Optimization. Universal Journal of Accounting and Finance 10(1), 219-230, Retrieved from DOI: 10.13189/ujaf.2022.100123.
Lagos State Government BudgIT Research (2018). Lagos 2018 Budget Fiscal Framework. Retrieved from on 20/06/2021.
Lagos State Ministry of Commerce and Industry (2011). Vision and Mission Statements. Retrieved from mpid=8&mnusubministry&mnu= module on 16/3/2012.
McKinley, J. D., & Owsley, P. D. (2003). Transfer pricing and its effect on financial Reporting. Journal of accountancy 2(4), 11-23.
Merle, R., Al-Gamrh, B., & Ahsan, T. (2019). Tax havens and transfer pricing intensity: Evidence from the French CAC-40 listed firms. Cogent Business & Management, 6(1), 1-26.
Olokesusi, F. (2011). Lagos: The Challenges and Opportunities of an emergent African MegaCity. A Paper presented at the NISEP. Seminar Series on 5th July, 2011.
Oloyede, T. (2010). Taxation: Principles and Practice in Nigeria. Ibadan: Silician Publishing Company.
Omirigbe, O. J. & Ibrahim, B. I. (2020). The Concept of Transfer Pricing: Prospects, Challenges and the way forward. Retrieved from publication/346017786_THE_CONCEPT_OF_TRANSFER_PRICING_PROSPECTS_CHALLENGES_AND_THE_WAY_FORWARD.
Organisation for Economic Co-operation and Development (OECD) (2010). Transfer pricing guidelines for multinational enterprises and tax administrations. Paris. Retrieved from %A0Paris. on 25/10/2017.
Osho, A. E., Efuntade, A. O. & Jemiseye-Dav, R. A. (2020). The Impact of Taxation on Transfer Pricing in Nigeria Economy. International Research Journal of Finance and Economics. ISSN 1450-2887, Issue 177, 139-151. Retrieved from
Otusanya, O. (2014). Anti-social financial practices in Nigeria: Significant others Perceptions. Journal of Financial Crime, 21(2), 149-173.
Oyewo, B. & Adeyeye, G. (2018). Budgetary Participation and Managerial Performance in Public Sector Organisations: A Study from Nigeria. Annals of Spiru Haret University: Economic Series, 18(1), 28-59.
Pallant, J. (2001). SPSS survival manual - a step by step guide to data analysis using SPSS for windows (version 10), Buckingham Open University Press.
Picciotto, S. (2015). Indeterminacy, complexity technocracy and reform of international corporate taxation. Social and Legal Studies, 24(2), 165-184.
Richardson, G., & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of Accounting and Public Policy, 26(6), 689–704.
Rogers, H. & Oats, L. (2022). Transfer pricing: changing views in changing times. Accounting Forum. 46(1), 83-107. Retrieved from on 20/05/2022.
Sebele-Mpofu, F. Y., Mashiri, E. & Warima, S. (2022). Enhancing the effectiveness of transfer pricing regulation enforcement in reducing Base Erosion and Profit Shifting in African countries: A Scoping Review. Journal of Accounting, Finance and Auditing Studies, 8(1), 99-131.
Seth, S. (2022). Transfer Pricing. Retrieved from on 10/05/2022.
Sikka, P. (2009). The dark side of transfer pricing: the role of transfer pricing in tax avoidance, and Wealth Retentiveness. University of Essex, UK. 23-30.
Spence, C., Dambrin, C., Carter, C., Husillos, J. & Archel, P. (2015). Global Ends, Local Means: Cross-national homogeneity in professional service firms. Human Relations, 68(5), 765-788.
Taylor, G., Richardson, G., & Lanis, R. (2015). Multinationality, tax havens, intangible assets, and transfer pricing aggressiveness: An empirical analysis. Journal of International Accounting Research, 14(1), 25–57.
United Nations (2013). Practical Manual on Transfer Pricing Transfer for developing Countries. Newsletter of FfDO/DESA (New York, May 29, 2013).
Uyar, M. (2014). A Study on Accounting of Transfer Pricing and its Effect on Taxation. Accounting and Finance Research, 3(1), 79-84.
How to Cite
ADEYEYE, G. B., BALE, A.-L. K., Iredele, O. O., & ADEYEYE, A. M. (2022). Transfer Pricing Regulations and Tax Compliance among Nigerian Companies. Global Journal of Accounting, 8(1), 46-61. Retrieved from

Most read articles by the same author(s)