In a bid to improve tax compliance rate in Nigeria and also boost tax revenue for the Federal Government of Nigeria, the Federal Inland Revenue Service (“FIRS” - Nigeria’s federal tax authority) recently established a specialised Non-Resident Persons’ Tax Office (“NRPTO”).
In a public notice issued by the FIRS, the Federal tax authority noted that non-resident taxpayers constitute an important segment of the tax-paying public in Nigeria, hence the need to devote specialised attention to them. The FIRS further noted that the devotion of attention to non-resident taxpayers is to enhance tax certainty, promote voluntary compliance, reduce tax disputes and avoid incidence of double taxation.
In the public notice issued by the FIRS, it was noted that:
· The NRPTO will handle all tax affairs of non-resident persons (individuals or corporates);
· The NRPTO is located within the International Tax Department at 3rd Floor, FIRS Building, 17B Awolowo Road, Ikoyi-Lagos;
· Commencing 1 January 2020, all non-resident persons liable to tax in Nigeria shall submit every return, correspondence or enquiry relating to all the taxes administered by the FIRS to the NRPTO; and
· Tax file of non-resident persons shall be domiciled at the NRPTO.
As provided in the notice, a non-resident person refers to:
· A foreign company (i.e. any company or corporation (other than a corporation sole) established by or under any law in force in any territory or country outside Nigeria) as defined in the Companies Income Tax Act (Cap C2 LFN 2004 as amended) (“CITA”). Under CITA, foreign companies are liable to pay companies income tax in Nigeria on profits derived from Nigeria; or
· An individual (who is resident outside Nigeria and derives income or profit from Nigeria) as defined in the Personal Income Tax Act (Cap P8, LFN 2004 as amended).
It is expected that the creation of the NRPTO by the FIRS will streamline the tax compliance process for non-resident persons, reduce the administrative burden on non-resident persons and reduce tax compliance costs.
The contents of this news alert are meant for the general information of our clients and friends and do not amount to legal advice. All enquiries on the subject may be made to: firstname.lastname@example.org
Adepetun Caxton-Martins Agbor & Segun
9th Floor, St. Nicholas House, Catholic Mission Street, Lagos Island, Lagos State, Nigeria.
Telephone: +234 (1) 462 2094; 462 2480; 740 6743 Fax: +234 (1) 461 3140