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Status of transfer pricing in Africa: Part II

South Africa

A number of regional and international developments have contributed to the current emphasis on transfer pricing by African tax authorities. In the final of this two-part series Taxand South Africa takes a look at the transfer pricing situation in Africa.

The Ghana Revenue Authority (GRA) will apply the principles contained in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD Guidelines), except when they are inconsistent with the provisions of the Ghanaian Regulations.

The Nigerian Regulations are based on the OECD Guidelines and United Nations Practical Manual on Transfer Pricing for Developing Countries (the UN Manual), in the event of conflicting interpretation, the relevant tax laws will prevail.

The Regulations make provision for advance pricing agreements (APAs( and recognises the OECD Guidelines. However, in the case of inconsistency between the OECD Guidelines and the Regulations, the Regulations will take precedence.  

The OECD Guidelines are the basis for determining an acceptable transfer pricing methodology, and the Zambia Revenue Authority (ZRA) accepts the use of foreign comparables, but prefers comparable information to be in respect of Zambian companies.

Countries such as Mozambique and the Democratic Republic of the Congo (DRC) do not currently have comprehensive transfer pricing regimes, but provisions in their tax code require transactions between related parties to be entered into at arm’s length

Discover more: Status of Transfer Pricing in Africa Part II 

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Taxand's Take

Significant progress has been made in Africa to develop transfer pricing regimes beyond broad anti-avoidance provisions.  It is expected that this trend will continue throughout the African continent in the near future.

Taxand's Take Author

Celia Becker
South Africa
Sub-Saharan Africa

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