Profits of companies established to promote sporting. Nigeria imposing tax on the income of persons other than companies, shall be guilty of an offence against this act. Tax practices in nigeria against the background of nigerias economy being. It is payable by companies that are registered in nigeria and non resident entities carrying on business in nigeria. Tat formally took off pursuant to the tax appeal tribunals establishment order 2009 issued by the minister of finance, federal republic of nigeria as published in the federal government official gazette no 296, vol. Companies income tax act, the words section 11 of the federal inland. Subsection 3, previously subsection 8, renumbere d by 2007 no. Appeals shall be as in the federal inland revenue service act.
Federation of nigeria, 2004 as amended by the companies income tax. Enactid by the national assembly of the federal republic of nigeria. Applicable laws constitution of the federal republic of nigeria 1999 companies and allied matters act cama companies income tax act cita criminal code act taxes and levies approved list for. Pdf readability assessment of nigerian company income tax act.
Corporate income tax cit is a tax imposed on companies resident in the republic of south africa i. Companies limited by guarantee are subject to a value added tax vat. Part iii income tax base division i calculating the income tax base subdivision a total income 5. Please note that this information is provided for general informational purposes only and is not intended to be legal advice. Enacted by the national assembly of the federal republicof nigeria. In this act, unless the context requires otherwise adjusted assessment means an assessment adjusted in accordance. Accounting for companies income tax cit covenant university. Payment of minimum tax by lossmaking companies or companies whose tax calculation show no tax payable. Finally, the finance act amends several onerous tax provisions which have impeded investment in nigeria, such as the complex insurance tax rules and the excess and interim dividend tax rules that limit the dividend available for distribution to shareholders as contained in the companies income tax act. Tax is payable for each year of assessment of the profits of any company at a rate of 30%. The federal inland revenue service firs in exercise of powers conferred on it by section 61 of the federal inland revenue service establishment act no. This act may be cited as the income tax act, 2004, and shall come into operation on the 1st july, 2004. This act shall apply to mainland tanzania as well as tanzania zanzibar. Pdf this study was undertaken to examine the readability of the nigerian company income tax act 2007 cita 2007, which is the main reference for.
This perspective is consistent with the provisions of the companies income tax act cita, the personal income tax act pita and the petroleum profit tax act ppta which prescribe that tax payers have an opportunity to recover any overpayment of tax within a six year period. Profits of companies established to promote sporting activities are also exempt. Federal republic of nigeria council on foundations. Cita exempts from tax the profits of companies engaged in certain public benefit activities, so long as the profits are not derived from trade or a business undertaking. Service establishment act 2007 c sections 58 and 60 of the companies income tax act, cap c21, laws of the federation of nigeria, 2004 as amended. You can read the full provisions of the act here companies income tax act cap. The bill also seeks to provide clarity and efficiency in the administration of the individual income taxes in nigeria. The companies income tax act in this act referred to as the principal act is amended as set out in this act. The companies income tax act, exempt from tax the profits of companies engaged in certain public benefits activities, so long as the profits are not derived from trade or business undertaking. The companies income tax act in this act referred to as. The company income tax act in the law that regulates the taxation of all limited liability company doing business in nigeria private and pubic limited companies alike, other than those engaged petroleum operations, the federal board of inland revenue is the sole authority for the administration of this tax. Act 2007 which empowers the service to carry out all necessary action that are expedient for the discharge of its functions, sections 55 of companies income tax act cita cap.
This is a creation of section 3 of federal inland revenue services act, 2007. Nigerian companies are taxed under the companies income tax act cita. Fourth schedule warrant and authority to levy by distress under the companies income tax act fifth schedule funds, bodies and institutions in nigeria to which donations may be made under section 25 of this act sixth schedule warrant and authority to enter premises, offices, etc. Every business liable to taxation, under the income tax act, 1962, is required to register with. All companies in nigeria are required by the companies income tax act 2007, to pay tax to the federal government on incomes or profits made by them. Fees, dues and allowances whenever paid for services. Tax appeal tribunal tat is established in accordance with section 591 of the federal inland revenue service establishment act 2007. For resident companies and organizationcompanies and organizations prepare and submit their annual self assessment tax return according to the firs specifications. The applicable tax rate is 30% 20% for companies with turnover less than n1. The currently enabling law is the companies income tax as amendment act 11 of 2007. Companies income tax amendment act, 2007 arrangement of sections section 1. Companies resident in nigeria are liable for cit on their worldwide income and nonresident companies are liable only to cit on their nigeriansource income.
This is in spite of the various pending memoranda and proposals for tax law reform submitted to the federal government by different stakeholders, such as nigerian insurers association, association of food, beverages and. Income arising from tax accounting provision for aircraft engine overhauls cz 35 treatment of backdated payments for social rehabilitation. Printed and published by the federal government printer. The bill also covers the taxation of business combination and seeks to prevent abuse of pro vision of the act on group restructuring. Company income tax the companies income tax act 2007 cita2007 regulates the taxation of companies through the firs. Federal republic of nigeria companies income tax act 19.
These include profits accruing in, derived form brought into or received from a trade, business or. Federal inland revenue service establishment act, 2007 shall have the powers to. Income tax act 2007 chapter 3 contents part 1 overview 1 overview of income tax acts t c af owe i v r e2ov part 2 basic provisions chapter 1 charges to income tax 3 overview of charges to income tax 4 income tax an annual tax 5 income tax and companies chapter 2 rates at which income tax is charged the rates 6 the starting rate, basic rate and. Companies income tax act as applicable to dividend distribution. Tax laws nigerian companies are taxed under the companies income tax act cita. Under companies income tax act you have to pay companies income tax if you are a resident or nonresident company incorporated in nigeria. An examination of the laws on tax reliefs and exemption in. Having now been passed by both arms of the national assembly, and thereafter assented to by the president, it is expected that its. The study recommends that tax simplification policy in nigeria should.
Individuals are subject to tax under the personal income tax act as amended. The petroleum profit tax is subject to any resident company or person in charge of a nonresident company who are exploring for petroleum or. Taiwo oyedele is a partner and head of tax and regulatory services at pwc nigeria. Thank you for reading this post, if you have found it useful please share with your network using one of the share buttons below. Just realized that the scene where ned finds out peter is spiderman and in awe drops the halfbuilt death star means some poor guy put together about 2000 pieces just so it could be dropped. Donations made by individuals, on the other hand, are not tax deductible. Nigeria imposing tax on the income of persons other than companies, shall be guilty of an. Income tax act 2007 no 97 as at 25 march 2020, public. A company is defined for the purpose of cita 1990 under s. Nigerian companies are now liable to income tax at 60%.
Blizzard baron photo more posts from the lego community. The amount charged is 30% o the profit earned in the year preceding assessment. Companies are mandated by law to pay company income tax cit in nigeria based on the profit. This act may be cited as the value added tax amendment act, 2007. The firs, relying on section 19 of cita, assessed the dividends. Assets situated outside nigeria without prejudice to the foregoing provisions of this act, as. I certify, in accordance with section 2 1 of the acts authentication act, cap. Companies income tax a company income tax in nigeria is administered exclusively by the federal inland revenue services firs. Company income tax cit the principal law is the companies income tax act cita which imposes cit on profits accruing in, derived from, brought into or received in nigeria. Petroleum profits tax act an act to impose a tax upon profits from the winning of petroleum in nigeria, to provide for the assessment and collection thereof and for purposes connected therewith.
Schedule to the companies income tax act or the petroleum profits tax act. Fifth schedule funds, bodies and institutions in nigeria to which donations may be made under section 25 of this act sixth schedule warrant and authority to enter premises, offices, etc. Companies resident in nigeria are assessable to tax on their worldwide income, whilst nonresident companies are subject to tax on profits accrued in or derived from nigeria, to the extent that the profits are not attributable to operations outside nigeria. An act to consolidate the provisions of the companies income tax act 1961 and to make other provisions relating thereto. Thecompanies income tax act in this act referred toas. And for related matters 16th day of april, 2007 enacted by the national assembly of the federal republic of nigeria 1.
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