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Bilateral Advance Pricing Agreement Template for Nigeria

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Key Requirements PROMPT example:

Bilateral Advance Pricing Agreement

"I need a Bilateral Advance Pricing Agreement for my pharmaceutical manufacturing company operating between Nigeria and India, focusing on raw material procurement and licensing arrangements, with the agreement to commence from January 2025."

Document background
The Bilateral Advance Pricing Agreement (BAPA) is a crucial instrument in Nigerian international tax practice, designed to provide certainty and prevent disputes in cross-border transfer pricing matters. This document is particularly relevant for multinational enterprises conducting significant intercompany transactions between Nigeria and other jurisdictions. It establishes agreed-upon methodologies for determining transfer prices, helping companies comply with both Nigerian and foreign transfer pricing regulations while avoiding double taxation. The agreement typically covers specific transactions for a fixed period (usually 3-5 years) and requires detailed documentation of the proposed pricing methodology, critical assumptions, and compliance requirements. BAPAs are particularly valuable in complex industries or when dealing with unique transactions where standard transfer pricing approaches may be difficult to apply.
Suggested Sections

1. Parties: Identification of the taxpayer, Nigerian Federal Inland Revenue Service (FIRS), and the foreign tax authority

2. Background: Context of the agreement, including business operations and reason for seeking BAPA

3. Definitions: Definitions of key terms used throughout the agreement

4. Scope of Agreement: Specific transactions, products, or services covered by the agreement

5. Term of Agreement: Duration of the agreement, including start and end dates

6. Transfer Pricing Methodology: Detailed explanation of the agreed transfer pricing method and how it will be applied

7. Critical Assumptions: Key assumptions underlying the agreement that, if changed, could affect its validity

8. Annual Compliance Requirements: Documentation and reporting requirements to demonstrate compliance

9. Review and Adjustment Procedures: Process for periodic reviews and making adjustments if necessary

10. Confidentiality: Provisions regarding the confidentiality of information shared under the agreement

11. Termination Provisions: Circumstances and procedures for early termination of the agreement

12. Dispute Resolution: Procedures for resolving disagreements between parties

13. Governing Law: Specification of Nigerian law as governing law and relevant international treaties

Optional Sections

1. Renewal Provisions: Terms for extending the agreement beyond its initial term, used when parties want to include automatic or conditional renewal options

2. Force Majeure: Provisions for extraordinary events affecting agreement implementation, included when operating in volatile markets or regions

3. Anti-Abuse Provisions: Specific clauses to prevent misuse of the agreement, included when there are specific concerns about potential abuse

4. Compensating Adjustments: Procedures for making tax adjustments in both jurisdictions, included when specific adjustment mechanisms are needed

5. Related Party Transactions: Additional provisions for transactions involving other related entities, included when multiple related entities are involved

6. Currency and Exchange Rate Provisions: Specific provisions for handling currency fluctuations, included when transactions involve multiple currencies

Suggested Schedules

1. Schedule A - Covered Transactions: Detailed list and description of all transactions covered by the agreement

2. Schedule B - Transfer Pricing Methodology Details: Technical details of the pricing methodology, including formulas and calculations

3. Schedule C - Critical Assumptions Documentation: Detailed explanation of all critical assumptions and their basis

4. Schedule D - Compliance Requirements: Specific documentation and reporting requirements with templates

5. Appendix 1 - Financial Projections: Relevant financial projections supporting the transfer pricing methodology

6. Appendix 2 - Organizational Structure: Details of the corporate structure and related parties

7. Appendix 3 - Functional Analysis: Analysis of functions, assets, and risks of involved parties

8. Appendix 4 - Comparable Analysis: Documentation of comparable transactions or companies used in the analysis

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions












































Clauses






























Relevant Industries

Oil and Gas

Manufacturing

Pharmaceutical

Technology and Telecommunications

Financial Services

Consumer Goods

Automotive

Mining and Natural Resources

Agriculture and Food Processing

E-commerce and Digital Services

Relevant Teams

Tax

Finance

Legal

Treasury

Compliance

International Business

Corporate Planning

Financial Reporting

Risk Management

Transfer Pricing

Relevant Roles

Chief Financial Officer

Tax Director

Transfer Pricing Manager

International Tax Manager

Finance Director

Head of Tax

Corporate Controller

Treasury Manager

Legal Counsel

Compliance Officer

Financial Planning Manager

Group Financial Controller

Tax Compliance Manager

International Business Development Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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