International Transfer Pricing and Tax Compliance: A Study of Listed Multinational Corporations in Nigeria

The volatility of the global economy, coupled with unpredictable market conditions, regulatory changes, and geopolitical risks, significantly impacts the value of multinational corporations (MNCs). Additionally, evolving consumer preferences complicate transfer pricing, decision-making, and investment strategies, ultimately shaping investor perceptions and market valuations. This study examines the relationship between international transfer pricing and tax compliance among listed MNCs in Nigeria. An ex post facto research design was employed, utilizing secondary data sourced from the Machameratio Data PC platform, covering the period from 2012 to 2023. The study population comprised 566 MNCs listed on the Nigerian Exchange Group, with Census Sampling Techniques used to ensure comprehensive analysis. Findings indicate a strong and significant relationship between international transfer pricing and tax compliance. Effective marginal tax rates also play a crucial role in shaping tax compliance behavior among listed MNCs. Furthermore, efficient transfer pricing practices contribute to improved tax compliance, enhanced financial performance, and tax savings. The study concludes that a well-structured international transfer pricing framework reduces the corporate tax burden while promoting financial stability and growth. It recommends the timely adoption of a comprehensive international transfer pricing treaty and regulatory policies to ensure continuous tax compliance, which should be effectively implemented and publicized.