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Prevention of Income and Profit-Shifting to Tax Haven Countries in Nigeria

Prevention of Income and Profit-Shifting to Tax Haven Countries in Nigeria One of the major strategies usually employed by companies to avoid taxation in Nigeria is to shift their incomes or profits to their subsidiaries located in low or no tax countries, usually referred to as ‘tax haven countries’. This is a result of the globalisation of international trade which made it possible for companies to extend their businesses to countries other than where they are headquartered. Thus the article examines income and profit-shifting to tax haven countries, its international regulations as well as its regulations in Nigeria. The article found that Nigeria does not have an adequate legal framework to prevent companies from shifting incomes and profits to their tax haven subsidiaries. The article recommends that the Nigerian government should urgently put in place the necessary legal framework and administrative procedures to implement the Organisation for Economic Co-operation and Development (OECD) 15-Action Plan on Base Erosion and Profit Shifting (BEPS) in line with international best practices. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png African Journal of International and Comparative Law Edinburgh University Press

Prevention of Income and Profit-Shifting to Tax Haven Countries in Nigeria

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Publisher
Edinburgh University Press
Copyright
Copyright © Edinburgh University Press
ISSN
0954-8890
eISSN
1755-1609
DOI
10.3366/ajicl.2022.0424
Publisher site
See Article on Publisher Site

Abstract

One of the major strategies usually employed by companies to avoid taxation in Nigeria is to shift their incomes or profits to their subsidiaries located in low or no tax countries, usually referred to as ‘tax haven countries’. This is a result of the globalisation of international trade which made it possible for companies to extend their businesses to countries other than where they are headquartered. Thus the article examines income and profit-shifting to tax haven countries, its international regulations as well as its regulations in Nigeria. The article found that Nigeria does not have an adequate legal framework to prevent companies from shifting incomes and profits to their tax haven subsidiaries. The article recommends that the Nigerian government should urgently put in place the necessary legal framework and administrative procedures to implement the Organisation for Economic Co-operation and Development (OECD) 15-Action Plan on Base Erosion and Profit Shifting (BEPS) in line with international best practices.

Journal

African Journal of International and Comparative Law – Edinburgh University Press

Published: Nov 1, 2022

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