On 6 December 2021, the Tax Appeal Tribunal (TAT) sitting in Lagos issued a judgment on the applicability of Withholding Tax on management fees paid to a non-resident company.
The judgment suggests that describing an item as a reimbursement in a contract may not be sufficient to exclude it from WHT, and that the FIRS can disregard the wordings of a contract or any arrangement (especially where it is between related parties), if the FIRS takes the view that such arrangement is artificial. The judgment also included some contentious perspectives in assessing whether management fees (prior to the Finance Acts) were subject to WHT.
Please see PwC's Alert on this and a copy of the TAT judgement, below:
Download Tax Alert - TAT rules on the applicability of WHT on Mgt fee to NRCs