ARTICLE
19 August 2019

FIRS Says WHT And VAT Are Due On All Payments In Cash Or Kind To Agents, Dealers, Distributors And Retailers By Principal Companies

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PwC Nigeria

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PwC Nigeria is one of the leading professional services ?rms in Nigeria with of?ces in Lagos, Abuja and Port Harcourt, with over 1,000 staff and 31 resident partners. We are committed to serving as a force for integrity, good sense and wise solutions to the problems facing businesses and the capital markets. We are guided by one promise – to do what is right, be it with our people, clients, community, or environment.
The FIRS has issued a Public Notice on the deduction of withholding tax and VAT on compensation paid to agents, dealers, distributors and retailers by principal companies
Nigeria Tax

The FIRS has issued a Public Notice on the deduction of withholding tax and VAT on compensation paid to agents, dealers, distributors and retailers by principal companies.

The Notice requires such principal companies, particularly those in the Fast Moving Consumer Goods (FMCG) that WHT and VAT are due on compensation, commission rebates and other means of incentives or rewards whether paid by cash, credit note, or goods-in-transit must be subjected to WHT and VAT at the appropriate rates and remit to the FIRS not later than the 21st of every month.

This Notice will have implications on the tax treatment of trade incentive plans to your distributors and agents. Such plans usually include buy-one-get-one free (BOGOF), two-for-the-price-of-one, rebates, discounts, and commissions.

Given the lack of details and clarity regarding the Notice, we recommend that you review your specific circumstances within the context of existing tax legislation before implementation. You should consult where necessary.

See a copy of the Notice below:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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