The Federal Inland Revenue Service (FIRS) has issued the Income Tax (Common Reporting Standard (CRS)) Regulations, 2019 (“the Regulations”) pursuant to its powers under Section 61 of the FIRS (Establishment) Act, 2007.
The Regulations, which took effect from 1 July 2019, gives effect to the provisions of the following instruments, amongst others:
a. Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (AEOI) signed by the Federal Republic of Nigeria on 17 August 2017; and
b. CRS and its Commentaries contained in the Standard for AEOI in Tax Matters, approved by the Organisation for Economic Cooperation and Development on 15 July 2014, and set out in the AEOI Implementation and Compliance Guidelines.
The scope of the Regulations includes:
The Regulations requires a “Reporting Financial Institution”, in respect of the 2019 calendar year and every subsequent calendar year, to file an “Information Return” with the FIRS setting out the information required to be reported, as described in the Guidelines, in relation to every “Reportable Account” that is maintained by the Institution at any time during the calendar year. Where a Reporting Financial Institution has identified no Reportable Account, the Regulations requires such Institution to file an Information Return with the FIRS stating that it maintained no Reportable Accounts in respect of that year. The deadline for submission of the Information Return under the Regulations is 31 May of the year following the calendar year to which the Return relates.
The Regulations further stipulates various penalties for non-compliance with reporting requirements, up to a maximum sum of N10million in the first month of the default, and N1million for each subsequent month in which the default continues.
We shall issue a detailed newsletter on the Regulations in due course.
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