By law, certain tax liabilities such as VAT and withholding taxes must be paid in the currency of transaction. This means for instance, if a fee was paid in USD then the applicable VAT and WHT must be remitted to the tax authority in USD.
We have received official communication from the FIRS dated 16 November 2017 approving the payment of outstanding foreign currency tax liabilities in Naira at the exchange rate of N325 to US$1. No rates were given for other major foreign currencies such as GBP and EURO.
Other details and conditions are stated below:
- the concession covers tax due up to 31 December 2016; taxes payable in respect of the current year 2017 are excluded
- payment must be made on or before 14 December 2017
- notification should be sent to the FIRS Chairman stating amounts paid, date of payment, tax type, assessment number & date, and evidence of payment
- this concession is one-off and payments after 14 December 2017 will revert to the applicable currencies
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.