In a bid resolve issues bordering on tax payment compliance, tax disputes, and double taxation, the Federal Inland Revenue Service (FIRS) has established a tax office for non-resident tax persons in Nigeria.
Specifically, a non-resident person refers to a foreign company as defined in the Companies Income Tax Act (Cap C2, LFN 2004 as amended). It also refers to an individual resident outside Nigeria but derives income or profit from Nigeria, as defined in the Personal Income Tax Act (Cap P8, LFN 2004as amended).
According to the information contained in an official public notice signed by the Executive Chairman of FIRS, Mr. Babtunde Fowler, the Non-Resident Persons’ Tax Office (NRPTO) will handle all tax affairs of non-resident persons (individuals or corporate) liable to taxes in Nigeria.
PUBLIC NOTICE: Establishment of Non- Resident Persons Tax Office
Also according to the official public notice, the FIRS has identified non-resident taxpayers as very important segment of the tax-paying public, hence, the need to devote specialised attention to them.
In view of the foregoing, the FIRS informed the non-resident persons that are resident in Nigeria and the general public that the tax office has been established and is located “within the International Tax Department at 3rd Floor, FIRS Building, 17B Awolowo Road, Ikoyi – Lagos.”
Providing further details, the FIRS disclosed that as from 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 Service to the Non-Resident Persons’ Tax Office.
Also, FIRS disclosed that henceforth, Tax files of all non-resident persons shall be domiciled at the new tax office.
Why this matters: As the Federal Government pushes the revenue agencies to increase budgetary target on a yearly basis, the FIRS on its part continually intensifies their tax collection efforts. Meanwhile, this tends to result in frequent disputes between taxpayers and tax authorities.
The tax issues arising from this range from disputes on issues such as interpretation of tax laws, inconsistencies in tax authorities’ position, provisions of the law and several others have been raised as reasons for tax disputes.
For instance, in 2014, the case between the Federal Board of Inland Revenue (FBIR) v Halliburton West Africa Limited (2014), the FIRS reneged from its earlier published circular on the tax treatment of recharges by non-resident companies and this resulted in a major tax dispute.