- Updated
- June 2022
- Sections
- 13
- Questions
- 33
Key Facts
Core Framework
Section 3.2(b) of the Liberia Income Tax Transfer Pricing Regulations.
Section 3.5(c) of the Liberia Income Tax Transfer Pricing Regulations.
The Liberia Income Tax Transfer Pricing Regulation applies in a manner that is consistent with the arm’s length principle in Article 9 of the OECD Model Tax Convention on Income and Capital and the United Nations Model Convention in place at the time the relevant controlled transaction is conducted. Moreover, Section 3.5(c) of the Regulation refers to the OECD TPG.
Section 4.2(a) of the Liberia Income Tax Transfer Pricing Regulations.
Liberia’s Transfer Pricing Regulation aligns its comparability analysis on the comparability provisions found in OECD Model Tax Convention on Income and on Capital as revised 2017 as well as the OECD Transfer Pricing Guidelines as revised 2017.
Section 5.1(b) of the Liberia Income Tax Transfer Pricing Regulations.
The guidance on arm’s length range and/or statistical measure contained in the OECD TPG is effectively incorporated in Liberia’s Transfer Pricing Regulations.
Documentation
TP Methods
- CUP
- Resale Price
- Cost Plus
- TNMM
- Profit Split
- Other
Selection: Most appropriate method
Dispute Resolution
Simplifications
Special Topics
Section 5.1(b) of the Liberia Income Tax Transfer Pricing Regulations.
Even though there are no specific rules for controlled transaction involving intangibles, the scope of Liberia’s Transfer Pricing Regulations covers transfer, purchase, license and use of intangibles.
Section 6.2 of the Liberia Income Tax Transfer Pricing Regulations.
Liberia does have penalties for not filing and paying taxes as per the due dates. There are other penal actions for tax evasion or non-submission of documentations. These same rules apply to the TP regime.
Section 6 of the Liberia Income Tax Transfer Pricing Regulations. Section 200 ( c ) of the Consolidated Liberia Revenue Code as Amended
A safe harbour rule is enshrined in the Liberia Transfer Pricing Regulation for small taxpayers lodging documentations. Small taxpayer is defined in Section 200 (c) of the Liberia Revenue Code as Amended. The income threshold for a small taxpayer in Liberia is LRD 3 Million or the equivalent United Stated Dollars exchange rate prevailing in the market at the time of the transaction.
Full OECD Questionnaire
Legal ReferenceSection 3.2(b) of the Liberia Income Tax Transfer Pricing Regulations.
Legal ReferenceSection 3.5(c) of the Liberia Income Tax Transfer Pricing Regulations.
The Liberia Income Tax Transfer Pricing Regulation applies in a manner that is consistent with the arm’s length principle in Article 9 of the OECD Model Tax Convention on Income and Capital and the United Nations Model Convention in place at the time the relevant controlled transaction is conducted. Moreover, Section 3.5(c) of the Regulation refers to the OECD TPG.
Legal ReferenceSection 208 of the Consolidated Liberia Revenue Code as Amended
Section 208 of Liberia’s Income Tax Act provides the definition of a related person: “(a) General Rule. Where any person, other than as an employee, acts in accordance with the directions, requests, suggestions, or wishes of another person whether or not they are in a business relationship and whether or not those directions, requests, suggestions, or wishes are communicated to the first mentioned person, as further elaborated in regulations, both persons are treated as related to each other. (b) Specific Cases. Without limiting the generality of subsection (a), the following persons are treated as related persons. (1) a natural person and a relative of the natural person, unless the Commissioner General is satisfied that neither individual acts in accordance with the directions, requests, suggestions, or wishes of the other individual; (2) a person and a partner of the person, unless the Commissioner General is satisfied that neither person acts in accordance with the directions, requests, suggestions, or wishes of the other person; (3) a permanent establishment and its owner; and (4) a person who is a legal person and— (A) a person who, either alone or together with a related person or related persons under another application of this Section, controls or may benefit from fifty per cent or more of the rights to income or capital or voting power of the legal person, as the case requires, either directly or through one or more interposed legal persons; or (B) a person who, under another application of this Section, is a related person of a person to whom subparagraph (A) applies. (5) In this Section, “relative” means a natural person who is related to another individual by blood, adoption or marriage and includes a natural person who is a spouse, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew or niece of the other individual, or a spouse of one of these listed natural persons.”
Legal ReferenceSection 4.2(e) of the Liberia Income Tax Transfer Pricing Regulations.
The Liberia Income Tax Transfer Pricing Regulation also provides for the use of other methods. A taxpayer request to use the other method may be approved by the Commissioner General of the Liberia Revenue Authority (LRA), where in view of the nature of the transactions, an arm’s length price cannot be determined appropriately using one of the other methods as described above.
- CUP (provided)
- Resale Price (provided)
- Cost Plus (provided)
- TNMM (provided)
- Profit Split (provided)
- Other (provided)
Legal ReferenceSection 4.2(a) of the Liberia Income Tax Transfer Pricing Regulations.
The Liberia Income Tax Transfer Pricing Regulations prescribe the use of the most appropriate transfer pricing method to a controlled transaction depending on the circumstances of the case.
- Hierarchy of methods (not selected)
- Most appropriate method (selected)
Liberia’s Income Tax Transfer Pricing Regulation does not contain specific guidance on commodity transactions.
- For controlled transactions involving commodities, the guidance contained in paragraphs 2.18-2.22 of the TPG is followed. (not selected)
- Domestic legislation mandates the use of a specific method for controlled transactions involving commodities (if so, please explain) (not selected)
- Other (if so, please explain) (not selected)
Legal ReferenceSection 4.2(a) of the Liberia Income Tax Transfer Pricing Regulations.
Liberia’s Transfer Pricing Regulation aligns its comparability analysis on the comparability provisions found in OECD Model Tax Convention on Income and on Capital as revised 2017 as well as the OECD Transfer Pricing Guidelines as revised 2017.
Legal ReferenceSection 5.1(b) of the Liberia Income Tax Transfer Pricing Regulations.
The guidance on arm’s length range and/or statistical measure contained in the OECD TPG is effectively incorporated in Liberia’s Transfer Pricing Regulations.
Legal ReferenceSection 6.2 of the Liberia Income Tax Transfer Pricing Regulations.
The guidance on comparability adjustments contained in the OECD TPG is effectively incorporated in Liberia’s Transfer Pricing Regulations.
Legal ReferenceSection 5.1(b) of the Liberia Income Tax Transfer Pricing Regulations.
Even though there are no specific rules for controlled transaction involving intangibles, the scope of Liberia’s Transfer Pricing Regulations covers transfer, purchase, license and use of intangibles.
Legal ReferenceSection 5.3 of the Liberia Income Tax Transfer Pricing Regulations.
The guidance on intra-group services contained in the OECD TPG is effectively incorporated in Liberia’s Transfer Pricing Regulations.
Even though there are no specific rules for controlled transaction involving financial transactions, the scope of Liberia’s Transfer Pricing Regulations would address such transactions.
Even though there are no specific rules for controlled transaction involving CCAs, the scope of Liberia’s Transfer Pricing Regulations would address transactions involving CCAs. Liberia does not have domestic legislation or regulation on cost contribution agreements and tends to rely on the OECD TPG.
Legal ReferenceSection 6 of the Liberia Income Tax Transfer Pricing Regulations.
- Master file consistent with Annex I to Chapter V of the TPG (selected)
- Local file consistent with Annex II to Chapter V of the TPG (selected)
- Country-by-country report consistent with Annex III to Chapter V of the TPG (not selected)
- Specific transfer pricing returns (separate or annexed to the tax return) (selected)
- Other (specify) (not selected)
Legal ReferenceSection 6 of the Liberia Income Tax Transfer Pricing Regulations.
The Liberia Income Tax Transfer Pricing Regulation requires any person with a related party transaction in a year of income who is eligible to file an Income Tax Return to file a Transfer Pricing Return along with all required documentation. The submission period is until 31 March.
Legal ReferenceSection 6.2 of the Liberia Income Tax Transfer Pricing Regulations.
Liberia does have penalties for not filing and paying taxes as per the due dates. There are other penal actions for tax evasion or non-submission of documentations. These same rules apply to the TP regime.
Legal ReferenceSection 6 of the Liberia Income Tax Transfer Pricing Regulations. Section 200 ( c ) of the Consolidated Liberia Revenue Code as Amended
A safe harbour rule is enshrined in the Liberia Transfer Pricing Regulation for small taxpayers lodging documentations. Small taxpayer is defined in Section 200 (c) of the Liberia Revenue Code as Amended. The income threshold for a small taxpayer in Liberia is Liberian Dollars (LRD) 3 Million or the equivalent United Stated Dollars exchange rate prevailing in the market at the time of the transaction.
Legal ReferenceLiberia APA Guidelines
Liberia has an APA program and has published its APA Guidelines. The APA Guidelines, among others, contain the below provisions: 1. An agreement between a taxpayer and the LRA (and potentially also one or more other tax administrations); 2. With respect to future related-party transactions within the scope of the transfer pricing rules; 3. For a specified term (a maximum of 5 years), with possibility of rollback. 4. A fee of USD 4 500 is applicable for an APA request. Liberia does not have a MAP regulation.
- Rulings (selected)
- Enhanced engagement programs (not selected)
- Advance Pricing Agreements (APA) (selected)
- Mutual Agreement Procedures (not selected)
- Other (please specify) (not selected)
Legal ReferenceSection 6 of the Liberia Income Tax Transfer Pricing Regulations. Section 200 ( c ) of the Consolidated Liberia Revenue Code as Amended
A safe harbour rule is enshrined in the Liberia Transfer Pricing Regulation for small taxpayers lodging documentations. Small taxpayer is defined in Section 200 (c) of the Liberia Revenue Code as Amended. The income threshold for a small taxpayer in Liberia is LRD 3 Million or the equivalent United Stated Dollars exchange rate prevailing in the market at the time of the transaction.
None of Liberia’s tax treaties follows the AOA.
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