Tax & Business Matters - Nigeria

FIRS Issues Public Notice on the Filing of Tax Returns by Entities in Tax Free Zones

The Finance Act 2020 amends section 18 of the Nigeria Export Processing Zones Act and the Oil and Gas Export Free Zone Act to require all entities registered and operating within the Zone to comply with section 55 of CITA regarding the filing of annual tax returns. The FIRS has issued a public notice in this regard.

Tax Appeal Tribunal issues judgement on the applicability of VAT on casino revenue, imported services and recharges

Tourist Company of Nigeria Plc (“TCN” or the “Appellant”) engages in the gaming and hospitality business including the operation of a casino in Nigeria. The FIRS assessed TCN to unpaid VAT for the 2016 year of assessment to which the company objected and appealed to the Tax Appeal Tribunal.

The key issued centered on imported services (including cost recharges from third party foreign service providers), services from local vendors, and casino revenue.

Read our alert for details of the facts, arguments and the judgement. Download PwC Tax Alert_TAT ruling on casino revenue imported services & recharges

Tax Appeal Tribunal upholds deemed profits assessment

Section 30(1)(b) of the Companies Income Tax Act (CITA) empowers FIRS to assess a company to tax on a fair and reasonable percentage of turnover where it appears to FIRS that the company either has no assessable profits or assessable profits that are less than expected or the profits of such companies cannot be ascertained. This is called a Deemed Profits Assessment [DPA].

In 2015, FIRS directed all foreign companies with Nigerian operations to file tax returns based on their actual profits in line with section 55 of CITA. A foreign company complied with this directive but had no tax payable based on its actual returns. FIRS disregarded the actual returns and issued a DPA to which the company objected and appealed to the TAT. The Tribunal upheld the FIRS assessment without due consideration to facts adduced in evidence and whether FIRS validly exercised its discretion.

Find out more here: Download PwC Tax Alert_TAT upholds deemed profits assessment_March2021

FIRS Ethics Perception Survey

Are you a taxpayer, tax consultant, company tax representative or tax manager? Do you interact with the Federal Inland Revenue Service (FIRS)? If yes, we invite you to complete a short survey (not more than 5 minutes) to share your experience and perception of the FIRS in observing due process and ethical standards.

 

 

The outcome will be used to develop measures to address identified lapses and institute robust controls in line with extant laws and global best practices.

 

Your responses will be treated in confidence.

 

Please click here to complete the survey. The survey closes on 31 March 2021.