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A MEMBER OF GENEVA GROUP INTERNATIONAL

A MEMBER OF GENEVA GROUP INTERNATIONAL. 10 Udi Street, Osborne Foreshore Estate, Ikoyi Lagos. 2nd Floor, Oakland Center 48 Aguiyi Ironsi Street Maitama , Abuja Phone: 01-8533 902 services@saffron-ng.com. www.saffron-ng.com. INVEST IN NIGERIA.

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A MEMBER OF GENEVA GROUP INTERNATIONAL

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  1. A MEMBER OF GENEVA GROUP INTERNATIONAL 10 Udi Street, Osborne Foreshore Estate, Ikoyi Lagos. 2nd Floor, Oakland Center 48 AguiyiIronsi Street Maitama, Abuja Phone: 01-8533 902 services@saffron-ng.com. www.saffron-ng.com

  2. INVEST IN NIGERIA ‘Recognizing Regulatory & Tax pitfalls and avoiding them’

  3. Companies Income Tax Personal Income Tax Petroleum Profits Tax Value Added Tax Withholding Tax Education Tax Information Technology Tax Capital Gains Tax Taxes in Nigeria 3

  4. . Lack of understanding of the documentation challenges encountered in processing business permits e.g. preparation of feasibility report Contractual issues e.g. signing documents net of taxes Lack of understanding of the local regulation for registration. Registration of company with share capital lower than ten million naira (N10 million)- will not qualify for obtaining business permit and expatriate quota Importation of capital not using government approved channels. This affects repatriation of such capital Failure to register with all necessary bodies e.g. Pension commission, National Social Insurance Trust Fund (NSITF) Common Pitfalls- General 4

  5. Need to register for taxes- CIT,VAT,PAYE at commencement of business Need to file for business income tax within the first 18 months of commencement of new business Need to comply with statutory obligation to file monthly VAT and WHT returns within time even where returns are nil FAILURE TO DO ALL THE ABOVE MAY RESULT IN PENALTIES AND INTEREST NOT BUDGETED FOR. PAYE issues- The PIT Amendment Act 2011 and changes in the calculation of 183 days to include leave days for expatriates Common Pitfalls- Taxes 5

  6. Need to ensure all related parties transactions including technical fees are at arms length, meeting all documentary requirements in all tax jurisdictions where the transaction might be subject to transfer pricing regulations. This is in view of the soon to be released transfer pricing regulation in Nigeria Taxation by deemed income for non resident company will no longer be applicable with proposed transfer pricing rules as the Revenue Authorities will be empowered to determine acceptable pricing Not taking full advantage of the double tax treaty agreement with Nigeria and investor’s country in repatriating income or dividend at lower WHT rates Not taking advantage of pioneer status opportunities for approved or potentially approvable business Common Pitfalls- Taxes 6

  7. Costs for setting up the new company (i.e. pre-incorporation and incorporation expenses, stamp duty and filing fees for registration of authorized share capital) are not an allowable expenses for tax purposes. The effect of the commencement provisions in the tax laws must be carefully considered as it is possible for the first years profit to be taxed twice or thrice based on the existing tax provisions Companies commencing business has a right of election of either the actual year or preceding year basis of determining their tax liabilities for the second and third year of operation. Any company that incurred losses on commencement of business is exempted from minimum tax if, the company: is in its first four calendar years from the date of commencement of business; or has a minimum of 25% of its paid up share capital made up of imported equity; or is engaged in Agricultural business. Consideration for new businesses 7

  8. Saffron: Local Strength. Global Structure • How can we support you? • We are proactive about taxes and we ensure you are up to date with all your taxes • We work with you to ensure your business is run in the most tax efficient manner • We support you with early set-up challenges and can support you across the African region through our networks. • We are ethical and professional and we can’t work with you if you aren’t • We have over 30 years experience and are recognized thought leaders within the industry 8

  9. For further discussion please contact us at services@saffron-ng.com or 01 8533902 OR any of our Partners. • Mrs Adebimpe Balogun on 0807 109 1200/ • e-mail: abalogun@saffron-ng.com’ • Professor M.T. Abdulrazaq on 0807 109 1201/ • e-mail: mtabdulrazaq@saffron-ng.com We look forward to hearing from you….

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