Nigeria has issued the Income Tax (Country-by-Country Reporting) Regulations 2018 (the CbCR Regulations). The Regulations are part of the implementation plans under Action 13 of OECD’s Base Erosion and Profit Shifting (BEPS) project. This is also a follow-up to Nigeria’s signing of the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports in January 2016, which was subsequently ratified by the Federal Executive Council in August 2016.
The CbCR Regulations provide guidance to multinational enterprises (MNEs) on their reporting obligations to Federal Inland Revenue Service (FIRS) in relation to their group income, taxes paid, and other indicators of their group economic activity. These information will enable FIRS perform high-level transfer pricing risk assessment as well as evaluate other BEPS related risks.
The issuing of the CbCR Regulations further underscores Nigerian Government’s resolve to fight aggressive tax avoidance schemes and profit shifting in Nigeria. The CbCR Regulations are expected to empower FIRS to put in place adequate frameworks and mechanisms to enable it collaborate with the revenue authorities of other tax jurisdictions in fighting BEPS.
We will provide detailed commentary on the CbCR Regulations in a subsequent newsletter.