Here are 20 sweeping changes to the Nigerian #tax laws that may affect you! pwc.smh.re/0FXk
1. Excess dividend tax to apply only to untaxed distributions other than profits specifically exempted from tax and franked investment income
2. Small businesses with turnover under N25m to be exempted from Companies Income Tax
3. Lower CIT rate of 20% to apply to medium-sized companies with turnover between N25m and N100m.
4. Commencement and cessation rules to be modified to eliminate overlap and gaps to avoid double taxation during commencement
5. Minimum tax provisions amended to 0.5% of turnover and only small companies (less than 25m turnover) are exempted, so non-resident companies will now pay minimum tax
6. Insurance companies can now carry forward tax losses indefinitely, deduct reserve for unexpired risk on time apportionment basis and special minimum tax for insurance companies to be abolished
7. Bonus of 2% of tax payable for medium-sized companies and 1% for large companies for early payment of CIT
8. Introduction of thin capitalisation of 30% of EBITDA for interest deductibility. Any excess deduction can only be carried forward for 5 years
9. Introduction of deemed tax presence for non-residents with respect to imported technical and management services. Applicable fees to be taxed at a final WHT rate of 10%
10. Any expense incurred to earn exempt income to be specifically disallowed as a deduction against taxable income
11. Dividend distributed from petroleum profits now to suffer 10% withholding tax
12. Banks to request for Tax Identification Number (TIN) before opening bank accounts for individuals, while existing account holders must provide their TIN to continue operating their accounts
13. Email correspondences to be recognised for dealings with tax authorities
14. The meaning of supply and definition of goods and services has been expanded to cover intangible items other than land, among others
15. Specific requirement for VAT deregistration for discontinuing operations
16. Introduction of VAT reverse charge on imported services
17. VAT registration threshold of N25 million turnover in a calendar year has been introduced
18. Remittance of VAT now to be on cash basis, that is, difference between output VAT collected and input VAT paid in the preceding month
19. Compensation for loss of employment below N10m to be exempted from CGT
20. Stamp duty on bank transfers to apply only on amounts from N10,000 and above. Transfers between same owner’s accounts in the same bank also to be exempted.
