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THE TAXAIDER NEWSLETTER VOL 4, ISSUE 1 (JANUARY 2022)

First Thoughts: Trusting Your Gut

I’ve been there, and I’m sure you have too. You knew something was up, but you didn’t listen to your gut and now you’re regretting it.

Telling yourself that you are “just being paranoid” or “paranoid for no reason” doesn’t help, it only makes you feel worse.

The reality is that your gut is never wrong. Your gut is a completely dependable source of information about what is going on around you. It may not be consciously accessible, but it is always there, assessing what is going on around you. And it knows before your conscious mind does, whether something feels right or not.

TAXATION OF INSURANCE BUSINESS: WHAT YOU NEED TO KNOW

Companies Income Tax Act, Cap C2, LFN 2004 (“CITA”) is the general income-tax administrative framework for companies in Nigeria.

However, due to the peculiarity of the insurance business, Section 16 of CITA is particularly dedicated to companies operating in the insurance sector. Section 16 of CITA explicitly addresses the specific income-tax administrative needs of the insurance companies.

KEY HIGHLIGHTS OF NIGERIA’S FINANCE ACT 2021

Hello there

Welcome to another Tax Thursday.

You would agree with us that 2021 was an interesting year, and indeed a busy one. Just as the country was tackling its battles, the FIRS was also swamped with a few legal battles. Worthy of mention was the bid of some states majorly championed by Rivers State and Lagos State to get control over the collection and appropriation of VAT within their jurisdiction, and we all witnessed how this turned out. Additionally, just before the end of 2021, the FG released the Nigeria Finance Act of 2021, which introduced new taxes, levies, and tariffs.

CONSTITUENT ENTITIES RESUME CBC REPORTS FILING IN NIGERIA

Nigeria’s Federal Inland Revenue Service (FIRS) has issued a Public Notice [BO1] to lift its May 2021 suspension of Local Filing of Country-by-Country (CbC) Reports by Constituent Entities in Nigeria. Constituent Entities are the Nigeria-based subsidiaries and branches of Multinational Enterprises. Relevant Constituent Entities are now to, with effect from January 1, 2022, duly make their CbC Reports Local Filing with FIRS in compliance with Regulation 4 of the CbC Regulations 2018 (CbC Regulations).[BO2] You may recall that the obligation placed on relevant Ultimate Parent Entities (UPEs) under Regulation 3 of the CbC Regulations was never suspended.

STAMP DUTY ADMINISTRATION FOR FINANCIAL INSTITUTIONS IN NIGERIA: WHAT YOU NEED TO KNOW

Stamp duty is a levy on written and electronic documents or instruments. Stamp duties are levied on instruments on either Ad-valorem or flat rate basis and the body in charge of the administration of stamp duties is either the federal Inland Revenue Service (FIRS) (duties on instruments for transactions between corporate bodies and individuals, group, or body of individuals) or the State Internal Revenue Service (duties on instruments for transactions between individuals).

TAX DEDUCTIBILITY OF BAD AND DOUBTFUL DEBT: WHAT YOU NEED TO KNOW

An organization in the business of making profit and trade continuity will issue invoices, render a service, and carry out a particular function which is expected to have a direct impact on the inflow of the business. While carrying out the day-to-day operation of the business and in some unexpected situations, the proceeds from the services rendered or goods sold are either never paid or remain unpaid over a long period.

2021 NIGERIA’S FINANCE BILL: KEY PROPOSED CHANGES

The Finance Bill 2021 has been transferred to the National Assembly for consideration. The new bill introduces several amendments to 12 different laws and takes effect in 2022. Below are some of the key proposed changes introduced by the Finance Bill 2021:

FIRS EXTENDS WAIVER OF INTEREST AND PENALTIES ON OUTSTANDING LIABILITIES

INTRODUCTION:

The Federal Inland Revenue Service (FIRS) via a public notice announced an extension of the deadline for filing Company Income Tax Returns due from January 2021 to November 2021 to 30^th November 2021.

However, on 30^th November 2021, FIRS via the Tax Pro-Max announced the suspension on interest and penalties for all taxes on back years assessment till 31^st December 2021.

NIGERIA’S COUNTRY-BY-COUNTRY REPORTING REGULATIONS: WHAT YOU NEED TO KNOW

Nigeria signed the Country-by-Country Multilateral Competent Authority Agreement (CbC MCAA) on the 27th of January 2016 and thereafter introduced the Income Tax (Country-By-Country Reporting) Regulations in 2018 as an administrative framework for CBC reporting in Nigeria.

THE TAXAIDER NEWSLETTER VOL 3, ISSUE 11 (NOVEMBER 2021)

First Thought: The Art of Minimalism

In a world that seems to be constantly increasing in complexity, it is comforting to imagine that happiness relies on simplicity. Minimalism is the art of knowing how much you need and then showing gratitude for just that.