Companies that are part of a Multinational Enterprise (MNE) Group and have 31 December as their accounting year end are expected to file their Country-by-Country (CbC) Report and Notification Form to the Federal Inland Revenue Service (FIRS) by 31 December 2019. The threshold for compliance with these filing obligations is ₦160 billion in consolidated annual turnover for companies headquartered in Nigeria while the threshold for MNEs headquartered outside Nigeria is €750 million in consolidated annual turnover.

The requirement to file the Notification Form and the Report is provided in Part II of the Income Tax (Country by Country Reporting) Regulations, 2018 (the Regulations) which mandates Constituent Entities (CE) of MNE Groups to notify the FIRS whether they are Ultimate Parent Entities (UPE) or Surrogate Parent Entities (SPE) and file their CbC Reports where obligated. The Report and the Notification must be filed on or before the last day of the reporting accounting year of the Group. Failure to discharge any of these obligations could potentially expose the taxpayer to a minimum penalty of ₦5 million.


FIRS had published the CbC Regulations in a gazette dated 8 January, 2018. The purpose of the Regulations is to provide tax authorities with information on the global activities, profits and taxes of MNEs to better assess international tax avoidance risks, improve transparency in the tax practices of the MNEs; and prevent tax evasion or avoidance through base erosion and profit shifting.

Regulation 6 requires that a constituent entity of an MNE Group that is resident in Nigeria for tax purposes should notify the FIRS whether it is an ultimate parent entity or surrogate parent entity. Where it is neither of the two, it should notify the FIRS of the identity and tax residence of the Reporting Entity not later than the last day of the Reporting Accounting Year of the MNE Group (for companies with 31 December year-end, this must be done by Tuesday, 31 December, 2019). Regulation 3 also requires a UPE of an MNE Group that is resident in Nigeria for tax purposes and meets the aforementioned threshold to file a Country-by-Country Report in a format prescribed by the FIRS. Where a constituent entity fails to provide the required notification to the FIRS, such entity will be liable to a penalty of ₦5million in the first instance and ₦10,000 for every day in which the default continues. Similarly, failure to submit the CbC Report, by the UPE or SPE, within the time stipulated would attract a penalty of ₦10million in the first instance and ₦1million for every month in which the default continues.


In the light of the fast-approaching deadline of 31 December, 2019, taxpayers should take necessary measures to ensure full compliance and provide accurate information while doing so. Given that the implementation of the Regulations is still in its early stage (this is only the second year), it is important that taxpayers seek professional guidance to ensure that the information submitted is correct and in the proper format.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.