Transfer Pricing in the Oil Industry
: Improving Tax Anti-Avoidance Regimes in the Gulf Of Guinea

  • Z. A. Nyah

    Student thesis: Doctoral ThesisDoctor of Philosophy


    The research is based on the international tax concept of transfer pricing and specifically examines it as a mechanism used abusively by international oil companies (IOCs) to dodge taxes. Transfer price manipulation (TPM) has recently emerged as an issue of concern to stakeholders in the oil industry due to the fairly extensive scope of operations and assets that are controlled by IOCs and the economic recession of 2008 that widely caused a decline in corporate profits. Over time, the effect has been reinforced reliance by multinational enterprises (MNEs) on aggressive tax planning schemes to optimize after tax profits and the adoption of countervailing measures by governments to protect their domestic tax bases from undue erosion. Notwithstanding that IOCs pay large amounts in taxes to governments around the world the atmosphere has been particularly tense with critics accusing them of being notorious abusers of international tax rate differentials. In reaction to this perceived threat, many resource rich countries seeking to mobilize badly needed but increasingly scarce fiscal revenues have over the years allocated considerable resources to developing anti-avoidance regimes capable of deterring, detecting and remedying aggressive tax avoidance schemes. This raises three important concerns, namely: (i) the extent of involvement of IOCs in TPM, (ii) the effectiveness of present anti-avoidance regimes in the Gulf of Guinea in terms of tackling abusive practices, and (iii) measures that can be taken to improve effectiveness of these regimes. It is against this backdrop that anti-avoidance regimes in two OECD (US, France) and two GoG (Cameroon, Nigeria) countries are analyzed. Using qualitative analysis as basis for the study it is argued that defects in the engineering and administration of anti-avoidance regimes in the GoG could create an incentive or facilitate recourse by IOCs to complex TPM schemes designed to avoid taxes. The range of techniques used to achieve this outcome is examined and defects in the design and implementation of existing GoG tax anti avoidance regimes are identified. Finally, in order to improve the effectiveness of these regimes the study recommends domestic and international measures to be taken to diminish existing lacunae and mitigate recourse by IOCs to TPM schemes.
    Date of Award2016
    Original languageEnglish
    SupervisorJanet Liao (Supervisor) & Abba Kolo (Supervisor)


    • Transfer pricing
    • Oil industry
    • Arm's length price
    • Gulf of Guinea

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