Tax Management

These services relate particularly to individuals such as employees in form Pay as You Earn (PAYE) and business owners (such as: Entrepreneurs, Managing Directors, Directors) in form of Direct Assessment.
We help our clients to meet the requirements of Personal Income Tax Act 2011 as amended regarding the following:

1. Self-Employed Individuals

A Self-employed individual is either an individual carrying on a personal business, profession or vocation; or each of the individuals jointly carrying on a business in partnership (commonly known as partners).
A self- employed person is required to file Returns with the Tax Authority nearest to his place of residence. The income is taxed on preceding year basis.

Contents of a Personal Income Tax Return:
i. Duly completed Self-Assessment form.

ii. Duly completed Income Tax Form (Form A) containing the followings;
a. Statement of full amount of income earned in the preceding year from all sources;
b. Particulars of income, reliefs, deductions and allowances the person is entitled to;
c. Declaration/attestation on of the correctness and completeness of Returns by the taxable person;

iii. Evidence of payment of taxes.

Due Date for Filing Personal Income Tax Returns

A Personal Income Tax Return must be filed on or before 31st March of the year of assessment

2. Personal Income Tax Returns by Individuals in Employment

Personal Income Tax is paid by individuals in employment through the Pay As You Earn (PAYE) scheme. These individuals income are taxed on an actual basis; this means that their income earned in a year is taxed within the same year.
The contents of tax returns remain the same as under self-employed individuals except that the taxpayer is required to declare;

1. Income other than employment income earned from all sources in the preceding year.
2. Income earned from employment in the current year.

3. Employers Responsibility under the Pay As You Earn (PAYE) Tax Scheme

Employers are required to deduct and account for personal income tax deducted from the Employment income of their employees under the PAYE scheme by way of a return filed with the Tax Authority on a monthly basis.
PAYE returns must be submitted for each month on or before the 10th day of the month following the month to which the tax deductions relate using the appropriate schedule.

Filing of Annual Returns by Employers
Employers are required to file annual returns in respect of PAYE deductions made from their respective employees’ income in the past year
Contents of Annual Returns:

1. Completed form A (Income Tax Form for Returns of Income and claims for allowances and relief)

2. Form H1 (Annual Income declaration)

3. A schedule of tax deduction from the employer containing the following information:
a. Name of employer.
b. Taxpayer Identification on Number (TIN) of the employer.
c. Names of employees
d. Taxpayer Identification on Number (TIN) of employee
e. Total emolument for each employee
f. Consolidated relief
g. Tax deducted

4. Schedule of overall total tax charged and remitted

5. Evidence of payment of taxes.

Due Date for Filing Annual Returns by Employers

Every employer is required to file a return not later than 31st January of every year

First     N300,000 @ 7% Next

Next     N300,000 @ 11%

Next      N500,000 @ 15%

Next      N500,000 @ 19%

Next      N1,600,000 @ 21%

Above   N3,200,000 @ 24%

 

1. Company Income Tax Services

Every limited liability company is required to file Returns with Federal Inland Revenue Service even if exempted by the law from paying tax.

New companies are expected to file their returns within eighteen (18) months of incorporation on or six (6) months after accounting year end whichever come first.

While existing companies are expected to file their returns within six (6) months after their accounting year end.

Contents of a Company’s Income Tax Returns

The contents of the returns to be filed include:

1. Duly completed Self-Assessment form.
2. Audited Financial Statement comprising:

• Statement of financial position otherwise called Balance Sheet
• Statement of comprehensive income (Profit and Loss Account)
• Statement of changes in equity.
• Statement of cash flows.
• Notes on significant Accounting Policies and other explanatory   information
• Comparative figures of preceding year on the Generally Accepted Accounting Principles (GAAP) basis to be included in the returns.

1. Tax computations.
2. Capital allowances computation.
3. Schedule of Fixed Assets
4. Evidence of payment of the taxes due.

The Audited Financial Statement should be signed by two Directors. While the accounts should be audited and signed by External Auditors.

Due Date for Filing Companies Income Tax Returns

• While existing companies are expected to file their returns within six (6) months after their accounting year end.
• New companies are expected to file their returns within eighteen (18) months of incorporation on or six (6) months after accounting year end whichever come first.

Education Tax Returns are to be filed separately in prescribed form, alongside Companies Income Tax or Petroleum Profit Tax and its taxes should be paid separately.

Contents of Education Tax Returns:
1. Computation of education tax payable

2. Duly Completed Self-Assessment form attested to by a Director or Secretary of the company

3. Evidence of payment of the education on taxes due.

CGT returns arises from capital gain earned from the disposal of a chargeable asset. CGT returns are filed along with the various tax returns for individuals and companies. Capital Gains Tax is paid separately at the rate of 10%.

Businesses, individuals and other corporate bodies are liable to file Capital Gains Tax Returns when they dispose of chargeable assets at 10% on the Gains. Chargeable assets are: all assets, options, debts, foreign currencies save for exemptions in the Principal Act.

Contents of CGT returns:

• Duly completed self-assessment forms
• Computation of Capital Gains Tax payable
• Schedule of Assets including proof of sale
• Evidence of asset and asset improvement
• Other relevant information
• Evidence of payment of the CGT

The due date for filing CGT according to the CGTA Section 17(3) is the last day in that year of assessment.

Companies or entities, which are members of a group or otherwise connected with another company or entity in Nigeria or overseas, are required to submit the following along with the annual income tax returns:

a) Transfer Pricing Declaration Form:
This form is completed once except in the event of significant changes to the information provided initially. The form is to be completed and submitted at the Tax Office where the taxpayer normally files its income tax returns.

b) Transfer Pricing Disclosure Form:
This form shall be completed in order to disclose details of controlled transactions for each year of assessment. The form shall be packaged separately with a copy each of Audited Financial Statements, completed Self-Assessment Form and tax computation schedules and submitted along with the annual income tax returns at the Tax Office where the taxpayer normally files its income tax returns-Source: FIRS