The Federal Inland Revenue Service (FIRS) on Monday, 17 September 2018, issued a public notice for publication in newspapers concerning the rules for multinational enterprise (MNE) groups that meet the notification requirement under the country-by-country (CbC) reporting regulations to comply with the requirement.
A provision of the CbC regulations requires a “constituent entity” of an MNE group that is tax-resident in Nigeria, to notify the FIRS of the identity of the group’s entity that will file the CbC report. This notification is to be submitted by the last day of the reporting accounting year of the MNE group. Failure to file a timely notification would be subject to a penalty of N5 million (approximately U.S. $14,000), with the penalty amount increasing N10,000 for each day in which the failure continues.
Given that the effective date of the CbC reporting regulations is 1 January 2018, and also given that many MNEs operating in Nigeria have 31 December year-end, many MNEs would need to submit their CbC reporting notification to the FIRS by 31 December 2018.
Tax professionals have observed that publication of the notice clearly reflects the resolve of the FIRS to enforce compliance with the CbC reporting regulations and with all transfer pricing regulations in Nigeria. MNE groups are, therefore, would want to consider putting in place the necessary framework for full compliance to avoid the imposition of penalties.
Read a September 2018 report [PDF 121 KB] prepared by the KPMG member firm in Nigeria
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