Tax & Business Matters - Nigeria

FIRS Issues New Transfer Pricing Regulations

The Federal Inland Revenue Service (FIRS) has issued the Income Tax (Transfer Pricing) Regulations, 2018.

The new Regulations incorporate the 2017 updates to the OECD’s TP Guidelines and some provisions contained in the African Tax Administration Forum’s (ATAF) Suggested Approach to drafting TP legislation. The Regulations also introduce administrative penalties for a wide range of offences.

Read our alert for further analyses and download a copy of the Regulations below. Also watch TV interviews by our TP Partner, Seun Adu.

Download PwC Alert_FIRS Issues New TP Regulations 2018

Download Nigeria_Income Tax (Transfer Pricing) Regulations 2018

Seun Adu's interview - CNBC Africa

Seun Adu's interview - Channels TV

 

Jumping the tax gun?

How legitimate is the FIRS order to banks to freeze accounts of tax defaulters; what roles should banks play; and what recourse do taxpayers have?

Did the FIRS jump the gun in directing banks to freeze accounts of taxpayers alleged to have defaulted in paying their taxes? Did the banks jump the gun in obeying the order to freeze such accounts and should the taxpayer jump the gun to settle the alleged tax liabilities?

Read my article published by BusinessDay on Wed 22 August 2018 for answers to these questions and more! Also watch my earlier interview on CNBC Africa.

Download FIRS Freezing Order_Taiwo Oyedele_Aug2018

Taiwo's Interview on CNBC Africa re FIRS Bank Freezing Order

Singapore ratifies Double Tax Treaty with Nigeria

Singapore has ratified the Double Tax Agreement (DTA) earlier signed between the country and Nigeria. See link to our previous tax alert.

The DTA is based on the OECD Model Tax Convention and enters into force in Singapore on 1 November 2018 with an effective date of 1 January 2019. In addition to reduced tax rates such as in the case of withholding tax on certain income, the protocol to the DTA also provides for non-discrimination. This means any benefit such as lower tax rate contained in the treaty will override the provisions of the domestic law and at the same time if the domestic laws subsequently provide for rates that are lower than the DTA, the lower domestic rates will apply.

Both Nigeria and Singapore have signed up to the OECD’s new Multilateral Instrument (Action 15 of the Base Erosion and Profit Shifting) to amend their tax treaties. Accordingly, the DTA will eventually be amended to incorporate any new measures designed to curb base erosion and profit shifting.

The treaty is yet to be ratified in Nigeria by the National Assembly which is required to give the treaty the force of law in Nigeria.

Watch this space for future development on the subject.

Cameroon and Nigeria have concluded a Double Taxation (Avoidance) Agreement

In furtherance of efforts to expand Nigeria's tax treaty network, we understand that a Double Taxation Avoidance Agreement has just been concluded as of Friday 3 August 2018 between Nigeria and Cameroon.

It is expected that the competent authorities of both countries will sign the agreement in the near future. In addition, the treaty will have to be presented to the National Assembly for ratification before it can take effect and have the full force of the law in Nigeria.

Watch this space for further update as this develops.

 

FIRS orders banks to freeze accounts of defaulting taxpayers

The Federal Inland Revenue Services (FIRS) has started writing to banks to appoint them as collection agents of taxpayers considered to be in default of tax payments. In order to achieve this, the FIRS is directing the relevant banks to freeze the accounts of the taxpayers to prevent them from drawing funds from the accounts.

See details below:

Download PwC Tax Alert_Letters of Substitution_August2018