September 18, 2018
The Federal Inland Revenue Service (FIRS or the Service) has issued a Public Notice (PN) on the notification requirements for Multinational Enterprises (MNEs) in line with the recently released Income Tax (Country by Country Reporting) Regulations (CbCR). The PN reiterates the provisions of Regulation 6 of the CbCR and the prescribed mode for the notification.
Pursuant to Regulation 6 of the CbCR, the PN requires a Constituent Entity (CE) of an MNE Group, that is resident in Nigeria, to notify the FIRS on whether the CE is an Ultimate Parent Entity or a Surrogate Parent Entity. In the event that it is neither of the two, it is required to notify the FIRS of the identity and tax residence of the entity responsible for filing its Country-by-Country Report with the FIRS, not later than the last day of its Reporting Accounting Year.
To ease compliance, the FIRS has published a Notification Form to be completed by taxpayers. The Notification Form, which can be accessed on the FIRS’ website, is designed to assist taxpayers to provide the required information to the Service. Furthermore, the PN directs that the required notification be submitted to the Director of the International Tax Department of the FIRS.
Where a CE fails to file this notification, such entity will be liable to a penalty of N5million in the first instance and N10,000 for each day that the default continues.
The issuance of this PN indicates the FIRS’ readiness to implement the provisions of the Regulations. It is instructive to note that the CbCR has a commencement date of 1 January 2018. Thus, it will apply to accounting periods commencing on or after 1 January 2018.
Taxpayers are encouraged to proactively put measures in place to ensure compliance with the Regulations.