Tax & Business Matters - Nigeria

The Nigeria Immigration Service has published Guidelines on Migrants e-Registration

The Nigeria Immigration Service has released guidelines for migrants e-registration requiring foreigners to register not later than 31 December 2019 or face sanctions.

This is expected to address immigration challenges and reduce the incidence of insecurity, among others. It also aims to alleviate the process of updating migrants' status and serve as a means of identification.   

See our alert below for further details and link to the Guidelines:

Download PwC Tax Alert_Migrant e-Registration Guidelines_August2019

 

FIRS to go after directors, managers and company secretaries for their company's tax liabilities

The FIRS today released a public notice threatening to go after the directors, managers, secretaries and other persons concerned with the management of companies to recover tax liabilities owed by their companies where such organisations fail to regularize the lien placed on their bank accounts by the FIRS within 30 days of the FIRS Notice.

The FIRS is relying on sections 31, and 49(2)(a-d) of the FIRS Establishment Act to support its planned action.

FIRS says WHT and VAT are due on all payments in cash or kind to agents, dealers, distributors and retailers by principal companies

The FIRS has issued a Public Notice on the deduction of withholding tax and VAT on compensation paid to agents, dealers, distributors and retailers by principal companies.

The Notice requires such principal companies, particularly those in the Fast Moving Consumer Goods (FMCG) that WHT and VAT are due on compensation, commission rebates and other means of incentives or rewards whether paid by cash, credit note, or goods-in-transit must be subjected to WHT and VAT at the appropriate rates and remit to the FIRS not later than the 21^st of every month.

This Notice will have implications on the tax treatment of trade incentive plans to your distributors and agents. Such plans usually include buy-one-get-one free (BOGOF), two-for-the-price-of-one, rebates, discounts, and commissions.

Given the lack of details and clarity regarding the Notice, we recommend that you review your specific circumstances within the context of existing tax legislation before implementation. You should consult where necessary.

See a copy of the Notice below:

Financial Reporting Council says transactions that require approval of a statutory body can be recognised without the approval

Rule 4 issued by the Financial Reporting Council of Nigeria prohibits an entity from recognising a transaction or event of a financial nature that requires approval or registration or any act to be performed by a statutory body in Nigeria until such approval has been obtained. Such transactions or events shall be regarded as having financial reporting implication only when such act has been performed or the approval / registration obtained.

For instance, as a result of this rule, companies that have entered into various foreign agreements such as technical services, licence agreement, management services etc that require the approval of the National Office for Technology Acquisition and Promotion (NOTAP) were not allowed to accrue for such expenses or otherwise recognize the payment for the expenses incurred in their financial statements.

Other common transactions requiring regulatory approvals include fixed assets certification, management fees, and certain incentives. It is noteworthy that a recent court decision had ruled against this rule in a case involving Stanbic IBTC Bank. The revocation is therefore consistent with the court ruling.

The revocation takes effect from 11 July 2019 and it is to be applied prospectively.

A copy of the Rule revocation is attached:

Download Revocation of Rule 4 FRCN