An overview of Nigeria’s 2018 Income Tax (Country by Country Reporting) Regulations


The Federal Inland Revenue Service (FIRS) recently released the Income Tax (Country by Country Reporting) Regulations, 2018 (“CbCR Regulations” or “the Regulations”), which marks yet another significant step by Federal Government of Nigeria in its quest to align the Nigerian tax system with outcomes of ongoing international tax reforms.

Though not a member-country of the Organisation for Economic Cooperation and Development (“OECD”), Nigeria has, nevertheless, been taking steps to adopt and implement the initiatives emanating from the OECD Base Erosion and Profit-shifting (“BEPS”) program.

It is in line with its commitment towards implementing the OECD BEPS framework that Nigeria signed the Multilateral Competent Authority Agreement for the Automatic Exchange of Country-by-Country Reports (“CbC MCAA”) on 27 January 2016, and released the CbCR Regulations.

Effective date
The effective date is January 2018 to be adopted retrospectively, as the Regulations were issued in June 2018.

Scope of the CbCR Regulations
The CbCR Regulations apply only to Multi-National Enterprises (MNE) Groups that meet the following criteria:

  1. Revenue benchmark: Total consolidated revenue of not less than N160,000,000,000 during the accounting year immediately preceding the reporting accounting year. The revenue benchmark translates to EUR 750 million at a conversion rate of 1 EUR: N213 average Central Bank of Nigeria (“CBN”) exchange rate as at 27 January 2016 when Nigeria signed the CbC MCAA.
  2. Tax residency: Ultimate Parent Entity (UPE) or Constituent Entity (CE) are resident for tax purposes in Nigeria
  3. Financial statements consolidation: Nigerian tax-resident UPE which file consolidated financial statements, or whose Nigerian tax-resident CE’s financial statements are consolidated by the Group’s UPE. Based on the consolidation rules of the IFRS applicable in Nigeria, MNE Groups will be required to file CbC Reports in Nigeria where the UPE has power (either through voting rights or contractual powers) over the other entities to direct their relevant activities, has exposure or rights to receive returns from them and has the ability to use its powers to influence the amount of the returns.

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