The Federal Inland Revenue Service (FIRS) on Thursday, 13 February 2020, issued a public notice (the Notice) informing dormant companies to regularise their tax returns by 30 June 2020. According to the Notice, a company is dormant if it has formally informed FIRS that it will be temporarily out of business for at least one financial year due to understandable exigencies such as adverse economic circumstances.
Failure of any dormant company to regularize its tax status with the FIRS will result in steep penalties; such as delisting such company from the list of incorporated companies and placing a lien on the company’s bank accounts.
The process of regularising a company’s corporate tax returns includes filing the following:
- Audited financial statements/statement of affairs
- Tax and capital allowance computations
- Duly completed self-assessment forms
It is important to note that the tax law places the obligation on a taxpayer to comply with all filing obligations. Therefore, dormant companies who have not been filing their tax returns, are in breach of the provisions of the law and may be liable to penalties. We encourage taxpayers to review their records to ensure that all relevant tax obligations are complied with to avoid consequences that may arise from non-compliance, as reiterated in the Notice. Please click here to access the Notice.