Nigeria: Deadline For Filing Income Tax And Transfer Pricing Returns – Avoid The Last Minute Rush And Material Penalties

The deadline for filing of income tax and transfer pricing (TP) returns with Federal Inland Revenue Service (FIRS) is fast approaching for corporate taxpayers whose financial year-end is 31 December. The Companies Income Tax Act (CITA) and Income Tax (Transfer Pricing) Regulations 2018 (the TP Regulations) require corporate taxpayers to file annual companies income tax (CIT) and TP returns within six (6) months after their financial year-end (i.e., due date for filing). Failure to do so attracts administrative penalties.

While the penalty for failure to file CIT returns on the due date is ₦25,000 for the first month of default and ₦5,000 for each subsequent month, the penalties for failure to file TP returns on the due date have been revised upward as follows:

• Failure to file the TP declaration form (if applicable) within the stipulated time attracts a penalty of ₦10 million for the first month of default and ₦10,000 for every day the failure continues
• Failure to file the TP disclosure form within the stipulated time attracts a penalty of ₦10 million or 1% of the value of the controlled transaction(s), whichever is higher, for the first month of default and ₦10,000 for every day the failure continues.

CITA and the TP Regulations allow taxpayers to apply for an extension of the due date for filing of their CIT and TP returns, respectively, where they are unable to meet such due date. While taxpayers are only required to show good cause when applying for an extension of the due date to file TP returns, taxpayers are required to meet certain stringent conditions when making an application for extension of the due date to file CIT returns.

However, it should be noted that the grant of extension of the filing date is solely at the discretion of FIRS. In view of the above, taxpayers are advised to ensure that their CIT and TP returns are filed at their respective tax offices on or before 28 June 2019 in order to avoid the administrative penalties.

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.