Summary
The Federal Inland Revenue Service (FIRS) has issued the Income Tax (Common Reporting Standard) Implementation and Compliance Guidelines (the "guidelines"). The guidelines were issued to supplement the Income Tax (Common Reporting Standard) Regulations, 2019 (the Regulations). It is aimed at giving effect to Nigeria's commitment under the inclusive framework with respect to base erosion and profit shifting and exchange of information.
Details
The guidelines provide for a common standard on reporting and due diligence for financial account Information, in accordance with the provisions of the Organization for Economic Co-operation and Development (OECD)'s approved Standard for Automatic Exchange of Financial Account Information (AEOI) on Tax Matters.
The guidelines have three major parts as follows:
- Part I – Preliminary information on the guidelines
- Part II – General reporting requirements and the due diligence requirements with respect to each Reportable Accounts (RA) of Reporting Financial Institutions (RFI). It specifies the details of information to be reported by the RFI and gives an elaborate definition and explanation of certain reporting terms.
- Part III – Commentaries on the general common reporting requirements, due diligence requirements and effective implementation of the Common Reporting Standard (CRS).
Implication
The guidelines provide detailed information and explanation on the CRS. It provides guidance on the implementation of the Regulations which was recently issued by the FIRS. The guidelines, which is modelled after the OECD's AEOI, shows the FIRS' commitment to explore international approved standards in addressing the prevailing issue of base erosion and profit shifting by ensuring automatic exchange of information between Nigeria and other jurisdictions.
It is pertinent for taxpayers to make good use of information provided under the guidelines and seek professional guidance to understand the extent of their obligations under the guidelines to avoid unforeseen penalty exposures.nd benefits of the eTAX.
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.