Matters/Taxation
Assessment review for a multinational FMCG group
A transfer pricing exposure closed at the negotiating table, on evidence prepared to the standard a tribunal would have demanded.
Forum
Federal Inland Revenue Service
Year
2023
Discipline
Taxation
Outcome
Liability reduced materially
The background
What happened
A group's intra-group service and royalty arrangements were challenged following a transfer pricing audit.
The demand carried penalties that exceeded the primary tax in issue.
The group wished to avoid a public dispute with an active regulator.
The question for the court
Whether the group's benchmarking supported the pricing of intra-group services, and whether penalties were sustainable where documentation existed.
Counsel
Taxation team, with the group's in-house tax function
Result
- The primary liability was settled at a small fraction of the original demand.
- Penalties were withdrawn in full.
- The years in issue were formally closed.
A comparable matter?
If this resembles something live, a partner will take the call.
+234 816 899 4065How it was argued
The case we put
Three lines of argument, run together rather than in the alternative.
Prepare as if for the tribunal
We assembled the benefit test, contemporaneous documentation and a refreshed benchmarking study to litigation standard before opening negotiations.
Separate penalty from principal
Where contemporaneous documentation exists, penalties premised on its absence cannot stand — and that was conceded early.
Close it in writing
The settlement was documented so the years in issue are closed, not merely quiet.
Why it matters
Negotiation works when the file is trial-ready. The preparation is the leverage.
Federal Inland Revenue Service · 2023
See the full ledger
Instruct us
Bring us the matter others have called difficult
Urgent injunctive and enforcement matters are triaged the same day. Everything else is acknowledged within one business day.
Confidential enquiry