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Guide to Income Tax (Common Reporting Standard) Regulations 2019 for the Automatic Exchange of Financial Account Inform

Guide to Income Tax Regulations 2019

Frequently Asked Questions (FAQ)

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Wole Obayomi

Partner & Head, Tax, Regulatory & People Services

KPMG in Nigeria

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Income Tax (Common Reporting Standard (CRS)) Regulations, 2019 for the Automatic Exchange of Financial Account Information (AEOI) was promulgated by the Federal Inland Revenue Service (FIRS) on 1st July 2019. The initial reporting date was 31 May 2020 which was recently extended by the FIRS to 30 September 2020 in response to business disruptions occasioned by COVID-19.

As part of our contribution to taxpayer education, we have simplified the import of the CRS-AEOI Regulations in this newsletter to enlighten taxpayers and address their concerns on how it affects them, where applicable.

What is the CRS?

CRS is a standard released by Organization of Economic Cooperation and Development (OECD) for the automatic exchange of pre-agreed information between all participating jurisdictions1. The information is collected by Financial Institutions (FIs) in each jurisdiction and submitted to the tax authorities in their jurisdiction. The aim of the CRS is to improve international tax transparency and reduce tax evasion among taxable residents of a country with income from other jurisdictions.

In Nigeria, the Federal Inland Revenue Service (FIRS) issued the Income Tax (Common Reporting Standard) Regulations, 2019 (“The CRS Regulations”) and the Income Tax (Common Reporting Standard) Implementation and Compliance Guidelines, 2019 (“The CRS Guidelines”) to set rules for the implementation of CRS in Nigeria.

What is AEOI?

range of agreements that tax authorities across the world have signed to exchange data automatically. The Multilateral Competent Authority Agreement (MCAA) provides the legal basis for the AEOI between participating countries. AEOI allows for the exchange of information regarding nonresident taxpayers with the tax authorities in the taxpayers’ country of residence.

Participating jurisdictions that implement AEOI send and receive pre-agreed information automatically each year. AEOI enables tax authorities to identify non-compliant taxpayers and aims to improve the deterrence and detection of cross border tax evasion. It is intended to further strengthen international efforts to increase transparency and cooperation by tax authorities.

How many jurisdictions have signed up to CRS?

The number continues to increase as more jurisdictions commit to exchanging data automatically. As at 3 September 2020, 108 countries have signed the MCAA. The list of countries participating in the CRS can be found on the OECD CRS portal. Nigeria became a signatory to the Agreement on 17 August 2017. As a result, Nigeria will exchange information with 107 participating jurisdictions in 2020.

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