The Federal Inland Revenue Service (FIRS) recently denied some companies seeking to utilise withholding tax (WHT) credit notes carried forward from prior years against their 2016 income tax assessments. The position communicated by the FIRS is that only the WHT credit notes relating to the year of assessment being filed will be granted.
In addition, the FIRS directed taxpayers with unutilised WHT credits relating to prior years to apply for a refund which would require a tax audit.
Given the challenges associated with obtaining tax refunds from the FIRS, the directive for taxpayers to apply for refunds rather than utilise their credit against future taxes is against the clear wordings and intent of the law.
Read more here Download PwC Tax Alert_Restriction of WHT Credits
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.