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Liberia – Transfer Pricing (2025)

Liberia’s transfer pricing framework is centered on the Liberia Income Tax Transfer Pricing Regulations and supported by provisions in the Consolidated Liberia Revenue Code. The domestic rules expressly reference the Arm’s Length Principle: Section 3.2(b) of the Liberia Income Tax Transfer Pricing Regulations. The scope of the regulations covers transfers, purchases, licensing and use of intangible assets, although there are no separate specific rules targeted at particular categories of intangibles or transaction types. The definition of related persons is provided in Section 208 of the Consolidated Liberia Revenue Code as Amended and contains a general rule plus enumerated specific cases.

Arm’s Length Principle and the role of the OECD Guidelines

Liberia applies the arm’s length principle consistently with Article 9 of the OECD Model Tax Convention on Income and Capital and the United Nations Model Convention in force at the time the relevant controlled transaction is conducted. The Liberia Income Tax Transfer Pricing Regulation explicitly refers to the OECD Transfer Pricing Guidelines: Section 3.5(c) of the Liberia Income Tax Transfer Pricing Regulations. In practice, the domestic regulation requires application in a manner consistent with the arm’s length standard, and the OECD Guidelines serve as an operative interpretative reference.

Section 208 of Liberia’s Income Tax Act (Consolidated Liberia Revenue Code as Amended) provides the definition of a related person. In its terms, the law contains a general rule stating that “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.” The section then lists specific cases: (1) a natural person and a relative of that natural person, unless the Commissioner General is satisfied that neither individual acts in accordance with the directions, requests, suggestions, or wishes of the other; (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 legal person and (A) a person who, alone or together with a related person(s) under another application of the 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, either directly or through one or more interposed legal persons; or (B) a person who, under another application of the Section, is a related person of a person to whom subparagraph (A) applies. The Section also defines “relative” to include spouse, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew or niece of the other individual, or a spouse of any of the listed natural persons. The explicit inclusion of permanent establishments confirms that relationships between a PE and its owner are treated as related parties.

Methods and selection criteria

Liberia expressly recognizes standard transfer pricing methods. The Liberia Income Tax Transfer Pricing Regulation provides for the use of Comparable Uncontrolled Price (CUP), Resale Price, Cost Plus, Transactional Net Margin Method (TNMM), Profit Split and allows for the use of other methods. Use of an “other method” requires approval by the Commissioner General where, given the nature of the transactions, an arm’s length price cannot be appropriately determined using one of the listed methods: Section 4.2(e) of the Liberia Income Tax Transfer Pricing Regulations. Regarding selection criteria, the regulations prescribe the use of the “most appropriate method” depending on the circumstances of the case: Section 4.2(a) of the Liberia Income Tax Transfer Pricing Regulations. There is no rigid legal hierarchy; method choice must be substantiated based on transactional facts and comparability factors.

Comparability and arm’s length ranges

Liberia follows the comparability analysis guidance set out in Chapter III of the OECD Transfer Pricing Guidelines. Section 4.2(a) of the Liberia Income Tax Transfer Pricing Regulations indicates that the jurisdiction aligns its comparability analysis with the OECD Model Tax Convention on Income and on Capital as revised 2017 and the OECD Transfer Pricing Guidelines as revised 2017. The jurisdiction does not prefer domestic comparables over foreign comparables. The tax administration does not use secret comparables for assessment purposes. The law permits the use of an arm’s length range and/or statistical measures to determine arm’s length remuneration, incorporating OECD guidance: Section 5.1(b) of the Liberia Income Tax Transfer Pricing Regulations. Comparability adjustments are required where appropriate, in line with OECD guidance: Section 6.2 of the Liberia Income Tax Transfer Pricing Regulations.

Documentation and reporting

Taxpayers are required to prepare transfer pricing documentation. Section 6 of the Liberia Income Tax Transfer Pricing Regulations requires a master file consistent with Annex I to Chapter V of the TPG and a local file consistent with Annex II to Chapter V of the TPG. The domestic legislation does not require a country-by-country report consistent with Annex III to Chapter V of the TPG (the relevant checkbox for a CbC report was not marked in the country profile). The regulations also require specific transfer pricing returns, which may be separate or annexed to the income tax return. Regarding timing, the Liberia Income Tax Transfer Pricing Regulation requires any person with related-party transactions in a year of income who is eligible to file an Income Tax Return to file a Transfer Pricing Return together with all required documentation; the submission period runs until 31 March: Section 6 of the Liberia Income Tax Transfer Pricing Regulations. The profile does not provide domestic guidance on the language of submission or specify the exact forms to be used; only the filing deadline is stated. As for penalties specifically targeted at transfer pricing documentation, the legislation does not set out TP-specific penalties; general penalties for late filing and payment and other penal measures for tax evasion or non-submission of documents apply, as referenced in Section 6.2 of the Liberia Income Tax Transfer Pricing Regulations. Detailed monetary amounts or procedural specifics for such penalties are not provided in the profile.

Safe harbours and simplification measures

A safe harbour exists for small taxpayers regarding documentation obligations. Section 6 of the Liberia Income Tax Transfer Pricing Regulations together with Section 200(c) of the Consolidated Liberia Revenue Code as Amended establish that a small taxpayer is eligible for simplified treatment. The small taxpayer threshold is Liberian Dollars (LRD) 3 Million or the equivalent United States Dollars at the prevailing market exchange rate at the time of the transaction. This safe harbour relieves qualifying small taxpayers from the full documentation regime.

APAs and MAP

Liberia operates an APA program and has published Liberia APA Guidelines. The APA framework includes the following features as described in the guidelines: an agreement between a taxpayer and the LRA (and potentially one or more other tax administrations); coverage of future related‑party transactions within the scope of the transfer pricing rules; a specified term with a maximum of 5 years; the possibility of rollback; and an application fee of USD 4 500. While the profile sets out these key elements, it does not provide a detailed timeline for APA processing, negotiation timeframes, or step-by-step procedural rules; such specifics are not contained in the country profile. Liberia does not have a MAP regulation according to the information provided in this profile.

Sanctions and other considerations

There are no transfer-pricing-specific penalties set out in the regulations; general penalties for failing to file or pay taxes on time and criminal measures for tax evasion or failure to submit documentation apply (see Section 6.2 of the Liberia Income Tax Transfer Pricing Regulations). Regarding secondary adjustments, recharacterization, year‑end adjustments and secondary adjustments, the profile indicates that Liberia does not allow or require taxpayers to make year‑end adjustments (the questionnaire response for “Does your jurisdiction allow/require taxpayers to make year-end adjustments?” was negative). Similarly, the jurisdiction does not apply secondary adjustments according to the profile. On attribution of profits to permanent establishments, Liberia does not follow the Authorised OECD Approaches (AOA) and none of its tax treaties follow the AOA; the profile does not indicate an alternative approach.

Conclusion

Liberia’s transfer pricing regime is anchored in domestic regulations that explicitly reference and incorporate the arm’s length principle and the OECD Transfer Pricing Guidelines. The law mandates substantive documentation (master and local files) and the filing of a transfer pricing return by 31 March, while providing a small‑taxpayer safe harbour at LRD 3 Million. Recognized transfer pricing methods include the traditional OECD methods and allow for other methods with Commissioner General approval, applying the “most appropriate method” standard. An APA program exists with a maximum term of five years and an application fee, but there is no MAP regulation documented in the profile and several procedural details (languages, detailed timelines, TP-specific penalty amounts) are not provided in the country profile. Where the profile lacks domestic guidance, practitioners should consult the OECD Transfer Pricing Guidelines for practical guidance.

References

Country profile information is available on the OECD transfer pricing country profiles page: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html

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