Our Archives

Call 08068929770 or 08122972656 for any enquiries.

Project Topic:

TRANSFER PRICING AND BUSINESS PROFIT TAXATION OF MULTINATIONAL COMPANIES IN NIGERIA

Project Information:

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 70 ::   Attributes: Data Analysis,abstract, table of content, references ::   916 people found this useful

Project Body:

CHAPTER ONE

1.1    Background To The Study

Transfer pricing constitute the price determined for the sale of goods and services between a related and controlled organization. An illustration is when

a subsidiary firm sells goods to a parent organization. When the parent organization pays for the goods the cost paid by the parent firm constitutes the transfer price.  Legal entities which operate under the control of a single corporation consist of those firms and their branches which are wholly or majorly owned ultimately by the parent corporation. Also firms are considered to be under common control if they share family members on their boards of directors. Transfer pricing can be used as a profit allocation method to allocate a multinational firms net profit (or loss) before tax to the countries where it does business. Consequently transfer pricing results in the setting of prices among firms of divisions within an enterprise. The use of transfer pricing multinationally   has a Tax advantage, but this is against the regulatory requirement of Tax collectors as they are against the use of transfer pricing for tax avoidance. This implies that if a company uses transfer pricing  they can book profits of goods and services in another country that may have a lower tax rate. But in some cases they can avoid tariff  on goods and services exchanged internationally in the transfer of goods and services from one country to another within an interrelated company transaction.

 

 The Organization for Economic Cooperation and Development (OECD), and auditing firms within each international location are responsible for international tax laws and audit financial statements according to the Arm’s length principle. Article 9 of the OECD Model Tax Convention is dedicated to the Arm’s Length Principle (ALP).The principle stipulates  that the transfer prices set between the corporate entities should be  in manner as If they were two independent entities. OCED has provided a framework   in the Transfer Pricing Guidelines which stipulate the details regarding the arm’s length price. The benefit of transfer price show that  the ALP is based on real markets and gives the governments and MNE a single international standard for the contracts that provide an allowance for various different government entities to collect their share of tax at the same time creating enough room for the MNE’s to avoid the double taxation. .    Transfer pricing helps in reducing the duty costs by shipping goods into high tariff countries at minimal transfer prices so that duty base associated with these transactions are low. Reducing income taxes in high tax countries by overpricing goods that are transferred to units in those countries where the tax rate is comparatively lower thereby giving them a higher profit margin.

 

 

1.2  Statement of the Problem

Transfer pricing also possess some challenges. Disagreement among the organizational division managers often does ensue as to what should be the nature of   transfer policies. Also additional costs are encountered regarding the with the required time and manpower required to execute transfer pricing and designing the accounting system. Difficulties also arise as to estimating the right amount of pricing policy for intangibles such as services, since these departments do not provide measurable benefits. Dysfunctional behavior could also arise among managers of organizational units. Another matter of concern is the process of transfer pricing is highly complicated and time-consuming in large multi-nationals. Buyer and seller perform different functions from each other that undertakes different types of risks. For instance, the seller may or may not provide the warranty for the product. But the price a buyer would pay would be affected by the difference. The risks that impact prices are as follows .Financial & currency risk, Collection risk , Market and entrepreneurial risk ,Product obsolescence risk, Credit risk 

 

1.3 Objectives of the Study

To determine transfer pricing and business profit taxation of multinational companies in Nigeria.

 

1.3  Research Questions

What is Transfer pricing

What is the effect of transfer pricing on the business profit taxation of multinational companies.

1.4  Significance of the Study

The study  shall elucidate on the nature and impact of Transfer pricing and business profit taxation of multinational companies in Nigeria .

 

1.5  Research Hypothesis

Ho The effect of Transfer Pricing on the Business Profit of Multinational companies in Nigeria is low

 

Hi The effect of Transfer Pricing on the Business Profit of Multinational companies in Nigeria is high

 

1.6  Scope of the Study

The study focuses on the appraisal of Transfer pricing and Business profit Taxation of multinational companies in Nigeria.

 

 

 

1.7  Limitations of the Study

 

The study was confronted by some constraint including logistics and geographical factors.

 

 

 

1.9 Definition of Terms

Competent authority‖;  is a person identified as such in a Double Taxation Convention and who by that Convention is given the authority to carry out certain functions under that Convention;‖

(i) ―controlled transaction‖ means a commercial or financial transaction between connected taxable persons;

 

(j) ―connected taxable persons‖ in the context of these Regulations is as defined in regulation 10 of these Regulations;

(t) ―OECD‖ means the Organization For Economic Cooperation and Development;

 

(u) ―other regulatory approvals‖ include approvals issued by the National Office For Technology Acquisition and Promotion; Department of Petroleum Resources, the Nigeria National Petroleum Corporation and any other such regulatory authorities or bodies.

 

(v) "person" means a natural or legal person;

 

(w) "Resale Price Method" means a method in which the resale margin that a purchaser of property in a controlled transaction earns from reselling the property in an uncontrolled transaction is compared with the resale margin that is earned in a comparable uncontrolled purchase and resale transaction;

(x) ―Service‖ means Federal Inland Revenue Service or the ‗FIRS‘;

(y) ―TP; This typically  means Transfer Pricing;

 

(z) ―TP Disclosure Form‖ means the form on which a tax payer is required to disclose information on all related transactions;


Get The Complete Project »

Project Department:

MORE ACCOUNTING FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS

Instantly Share this Project On Social Media:

CLOSELY RELATED ACCOUNTING FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS

AN APPRAISAL OF THE IMPLICATION OF ELECTRONIC BANKING IN NIGERIA BANKS (A CASE STUDY OF ACCESS BANK)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   8195 engagements

CHAPTER TWO REVIEW OF RELATED LITERATURE Electronic banking in Nigeria has overtime been viewed by many especially economists as having a lot of implications on the economy of Nigeria and especially...Continue reading »

A CRITICAL ANALYSIS OF THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 75 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   6573 engagements

ABSTRACT The study was carried out to analyse how an organization performs making use of the financial statements with First Bank of Nigeria Plc serving as the case study. the study disclosed that th...Continue reading »

AN EVALUATION OF THE PERFORMANCE OF NIGERIAN STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIA ( A CASE STUDY OF NIGERIAN STOCK EXCHANGE)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 78 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   4267 engagements

HISTORICAL BACKGROUND OF THE NIGERIA STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIAN. The nigeria stock excahnge denoted by NSE is a government establishment where stocks are traded on a daill...Continue reading »

APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION: A CASE STUDY OF APOSTOLIC CHURCH, DELTA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   4454 engagements

2.1 CONCEPTUAL FRAMEWORK A budget is can be defined by accountants as “a planned outcome to be generated and for the expenditure to ensure during that period and the capital to be employed to a...Continue reading »

ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN CALABAR LOCAL GOVERNMENT AREA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 69 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   3870 engagements

ABSTRACT The economy of Nigeria cannot function properly or thrive without the micro, small and medium scale enterprises (SMEs). These small scale enterprises cannot function properly if they are not ...Continue reading »

ASSESSMENT OF ADEQUATE RISK RECOGNITION AND MANAGEMENT IN NIGERIAN INSURANCE COMPANIES (A CASE STUDY OF UNION ASSURANCE COMPANY, UYO)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 86 ::   Attributes: Questionnaire, Data Analysis  ::   3308 engagements

THE CONCEPT OF RISK Risk has been the subject of study by different scholars over the years with several meaning and definitions. But the most accepted definitions are that of J.E Banister and P.A Baw...Continue reading »

What are you looking for today?

TESTIMONIALS:

  • 1. Mohammed A.B from Veterinary Laboratory, Zanzibar ,Tanzania said "You are doing good job to assists in research. God bless you.".
    Rating: Very Good
  • 2. Grace Madu from IMT enugu said "Thank you so much; i will tell my friends about you guys!!! Please give them a good job just like mine!!! God bless you!!!".
    Rating: Excellent
  • 3. Favour Adeoti from Unimaid said "For the good deeds and help to students like me, may God almighty continue to bless u and empower you to do more. Thank u very much...".
    Rating: Excellent
  • 4. Saddiq Abubakar Shuaibu from ESAE BENIN UNIVERSITY said "I check your site because I want you to help do this project thank you".
    Rating: Excellent
  • 5. Temitope Olumide from UAM makurdi said "I can not believe i could trust online platforms but you prove to me that there are still some good people out there. Thank you Mr Donald".
    Rating: Excellent
  • 6. Topeola Atinuke from the bells said "hmmmm, not sure yet about all dis comment still working on dem yet....tank u".
    Rating: Average

Paper Information

Format:ms word
Chapter:1-5
Pages:70
Attribute: Data Analysis,abstract, table of content, references
Price:₦3,000
Get The Complete Project »

Best Selling Projects

Our Archives