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Nigeria: Capital gains tax withholding for employers in Lagos

Nigeria: Capital gains tax withholding for employers

The Lagos State Internal Revenue Service (LIRS) issued a notice on 6 January 2019 appointing employers and other payers of capital sums as “collecting agents” for purposes of withholding and remitting capital gains tax regarding certain capital payments. The effective date for the notice is 1 January 2019.


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The notice requires employers to withhold and remit capital gains tax on “capital sums” paid to employees as “compensation for the loss of employment.” A capital sum in this context refers to any money or money’s worth that is paid to taxpayers in respect of qualifying transactions that fall within the meaning of “disposal of assets.” Such transactions include compensation for the loss of office or employment, payment for surrender or forfeiture of rights, etc. 

The notice also requires appointed agents to file with their annual returns, a statement of the recipients of capital sums in a prescribed format and “nil” returns when applicable.

Read a January 2019 report [PDF 178 KB] prepared by the KPMG member firm in Nigeria

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