There has been a long standing dispute between the Federal Inland Revenue Service (FIRS) and oil producing companies on the applicable price of crude oil to be used for tax purposes. The Tax Appeal Tribunal (TAT) on 23 January 2015 ruled that the realisable price, and not the official selling price, should be used for the tax years during which the relevant Memorandum of Understanding (MOU) between the government and the oil companies remained valid.
It is unlikely that this decision will bring closure to the issue especially for periods not covered by the MOU and for oil companies that do not operate under such agreements.
Read our tax alert and a copy of the judgment below for further details.
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