Saturday,
May 09, 2020 03:59 PM / KPMG Nigeria/ Header Image Credit: Brandspur

The Federal Inland Revenue
Service (FIRS or "the Service") has issued the following Information Circulars
numbered 2020/02 - 08 ("the Circulars") titled:
1. Clarification on the
Implementation of the Value Added Tax (VAT) Provisions of the Finance Act, 2019
("VAT Circular");
2. Circular on Tax
Implications of the Operation of Regulated Securities Lending Transaction (SEC
Lending) in Nigeria ("SEC Lending Circular");
3. Clarifications on
Sundry provisions of the Finance Act 2019 as it relates to Companies Income Tax
Act ("CITA Circular");
4. Clarifications on the
Provisions of the Stamp Duties Act ("Stamp Duties Circular");
5. Clarification on
Commencement and Cessation Rules, and Business Reorganisation: - Sections 29 of
CITA, 32 of CGTA and 42 of VATA (as amended by the Finance Act, 2019)
("Business Reorganisation Circular");
6. Circular on Tax
Implications of Operation of Real Estate Investment Companies ("REIC") in
Nigeria ("REIC Circular"): and
7. Clarification on the
Amendment to Section 16 of Companies Income Tax Act (CITA) in Relation to
Taxation of Insurance Companies ("Insurance Taxation Circular")
The Circulars are aimed at
providing guidance to stakeholders on the interpretation of the amendments to
extant tax laws by the Finance Act 2019, and practical issues associated with
their implementation. The
Circulars supersede any
previously issued circular, notice or publication by the FIRS, which is
inconsistent with the Circulars to the extent of its inconsistency.
The outlines of the
provisions of each Circular are as follows:
1. The VAT Circular No.
2020/02:
- Definition of Goods and
Services
- Rate of tax
- Transition issues
- Registration and
Deregistration
- Registration by
Non-residents
- Self-account provision
- Introduction of VAT
threshold
- Determination of N25
million turnover threshold
- Business sold or
transferred
- Exported services
- Penalty regime
2. The SEC Lending
Circular No. 2020/03:
- Relevant regulatory
provisions
- Nature of regulated
securities lending transactions
- Definition of key terms
- Incomes under a SEC
Lending
- Taxation of income on
SEC Lending under CITA
- Income earned by an
individual under a SEC Lending
- Application
of Stamp Duties Act to SEC Lending

3. The CITA Circular No.
2020/04:
- Section 19 of CITA on
payment of dividend by a Nigerian company
- Exemption of small
companies from income tax: withholding tax obligations, tertiary education tax
obligation, treatment of capital allowances and anti-abuse
measures
- Profits on goods exported
- Tax deductible interest
expense
- Section 27 of CITA -
expenses incurred in earning tax-exempt income
- Tax or penalty borne on
behalf of another person
- Section 29 of CITA -
filing of tax returns
- Minimum tax - definition
of "gross turnover"
- Gas utilization
(downstream operations)
- Rate of tax
- Section 77 of CITA - removal of provisional tax, and filing and payment of tax
- Withholding tax rate for
construction contracts
- Relief for foreign loans
4. The Stamp Duties
Circular No. 2020/05:
- Applicability of stamp
duties to electronic documents
- Instruments and receipts
liable to stamp duties
- Mode of denoting stamp
duties
- Electronic documents
received in Nigeria
- Authority to collect
stamp duties
- Stamp duties on bank
deposits or transfers above N10,000
- Stamp duties on loans
and credit facilities
- Stamp duties on contract
notes
- Stamp duties on
contracts
- Transition issues
5. The Business
Reorganisation Circular No. 2020/06:
- Basis of assessment for
the first year to third years of assessment
- Basis of assessment
during cessation of business
- Business reorganisation
and restructuring
6. The REIC Circular No.
2020/07:
- Regulatory overview of
REITs
- Definitions of Real
Estate Investment Schemes (REIS) and "real estate"
- Nature of REIS
- Taxation of the income
derived by REICs
7. The Insurance Taxation
Circular No. 2020/08:
- Non-life insurance
companies: determination of reserve for unexpired risk, estimate of outstanding
claims and outgoings, minimum tax, gross premium, and template for computing
companies income tax (CIT) liability.
- Life insurance
companies: definition of gross income and template for computing CIT liability.

Related News
- FIRS Issues
Information Circular on the Implementation of VAT Changes in the Finance
Act
- COVID-19:
FIRS Announces Waiver of Interest and Penalty on Outstanding Tax
Liabilities
- Nigeria
Needs Data harmonization and Tax Reforms To Boost Economy - Taiwo Oyedele
- Ahead of
Tomorrow on WebTV: Discussions on COVID-19; Tax Measures to reposition
Nigeria's Economy
- FIRS
Announces Additional Palliative Measures in Response to COVID-19 Pandemic
- Co-ordinated
Policy Key to Effective COVID-19 Tax and Fiscal Stimulus Measures - Yomi
Olugbenro
- Proper
Coordination Needed For Nigerian COVID-19 Tax and Fiscal Policy Stimulus-
Yomi Olugbenro
- Ahead of
Tomorrow On WebTV: Discussions on COVID-19; Tax and Other Fiscal Stimulus
in Nigeria
- FIRS
Launches e-Filing Portal for Transfer Pricing
- COVID-19
Tax Measures - LIRS Extends Filing Deadline for Annual Returns
- TAT Affirms
the Applicability of Excess Dividend Tax on Dividend Paid from Tax-Exempt
Incomes
- FIRS Grants
Tax Concessions in Response to COVID-19
- FIRS
Automates Value Added Tax Filing and Collection System
- FIRS
Collects N5.26trn in 2019; Equivalent to 59.8% of N8.80trn Target

