FIRS Establishment of Non-Resident Persons Tax Office

FIRS Establishment of Non-Resident Persons Tax Office

The Federal Inland Revenue Service (FIRS) recently released a public notice on the establishment of the Non-Resident Persons Tax Office (NRPTO). The establishment of the office is intended to enhance tax certainty, promote voluntary compliance, reduce tax dispute and avoid incidence of double taxation of non-resident persons operating in Nigeria.

Non-resident persons for tax purposes, are companies or individuals liable to tax on the profit or income deemed to have been derived from Nigeria. Non-resident companies and individuals are within the tax jurisdiction of the federal tax authority which is administered by the FIRS.

The Public Notice described a non-resident person as a foreign company that makes profit in Nigeria as defined in the Companies Income Tax Act Cap C2 LFN 2004 as amended 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.

Effective date
All non-resident persons (companies or individuals) liable to tax in Nigeria are required to comply effective from 1 January 2020, to submit every return, correspondence and enquiry relating to all the taxes administered by the FIRS to the Non-residence Persons Tax Office.

Returns to be file at NRPTO
Every non-resident company and individual that is carrying on business in Nigeria is required to prepare and submit to the FIRS, in respect of its operations in Nigeria, all returns which may include the following:

· Value Added Tax (VAT) monthly return;
· Withholding Tax (WHT) monthly return;
· Corporate and individuals annual Income tax returns; and
· Such order returns that may be required by the FIRS.

Furthermore, all correspondences and enquiry relating to all taxes from the effective date are to be submitted at the new established tax office.

NRPTO location
The non-resident person tax office location where every return, correspondence and enquiry related to all the taxes administered by the Federal Inland Revenue Service, shall henceforth be submitted to International Tax Department at 3rd Floor, FIRS Building, 17B Awolowo road, Ikoyi, Lagos.

Comments on the public notice
The establishment of a special tax office for non-resident persons by the FIRS is a welcome development intended to simplify tax administration of non-resident taxpayers in Nigeria.

However, the FIRS still need to address how non-resident taxpayers outside Lagos State will file their tax returns and correspondences as it would be inconvenient and uneconomical for non-resident taxpayers from other States, aside those within Lagos State, to submit their tax returns and correspondences at the established location. It is advised that the FIRS should leverage on its e-filing platform and assign a designated email for submission of tax returns and other correspondences.  

While we note that the FIRS may internally take care of the redirection of taxpayers file and tax identification number of the non-resident taxpayers, it is important for the purpose of clarity, to notify the affected persons, in so doing, this would reflect the objective on the ease of doing business in Nigeria.

Concluding thought
Considering the above, all non-resident taxpayers are expected to contact their respective tax consultants for professional support in complying with the FIRS directive and to avoid any implication of non-compliance.

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