Question Tag: Nigerian Tax Law

Search 500 + past questions and counting.

ATAX – May 2019 – L3 – Q6 – Transfer Pricing

Outline key aspects of transfer pricing regulations in Nigeria, including objectives, key concepts, and methods.

Question

The need for monitoring and controlling the operations of multi-national enterprises (MNEs) and their local subsidiaries or associate companies around the world has necessitated special interest in various governments putting in place mechanisms for the treatment of transfer pricing. Although transfer pricing is not new in Nigeria, the law regulating it, the Income Tax (Transfer Pricing) Regulation Act, was enacted in August 2012. It specifies that “every taxpayer” is expected to develop a transfer pricing policy in regard to transfer pricing and control transactions, as well as treatment of transactions of permanent establishments (PE) and dispute resolutions.

You have been invited by the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) to present a paper at a workshop on transfer pricing regulations in Nigeria. The primary objective of the workshop is to provide the participants, both local and foreign stakeholders in the Nigerian business environment, necessary information on transfer pricing issues in Nigeria.

You are required to outline relevant points to address the following issues:

a. Objectives of application of transfer pricing regulation in Nigeria (3 Marks)
b. The concepts of:
i. Connected taxable persons (3 Marks)
ii. Arm’s length principle (3 Marks)
c. Description of three transfer pricing methods (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Arm's Length, Nigerian Tax Law, Taxable Persons, Transfer Pricing, Transfer Pricing Methods
Level: Level 3

Topic: Transfer Pricing

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

Calculate the tax liabilities and deferred tax provisions for ICTREC Mining Company Limited, ensuring compliance with Nigerian tax law and addressing FIRS requirements for accurate financial reporting. The report will guide the company in meeting its tax obligations and preparing financial statements free of queries.

Question

The Managing Director of ICTREC Mining Company Limited is concerned about the correct computation and presentation of deferred taxes in the company’s financial statements. Last year, the Federal Inland Revenue Service raised a query on the company’s financial statements and the annual tax returns filed for tax assessment purposes.

To avoid any future tax queries on the financial statements, the Managing Director has approached your firm of chartered accountants to assist in preparing financial statements suitable for presentation at the company’s annual general meeting and submission to the tax authorities for determining tax liabilities.

All relevant books of accounts for ICTREC Mining Company Limited’s financial transactions have been made available to you. The following is an extract from the accounts for the year ended December 31, 2021:

Income and Expenses (N’000):

Turnover: 125,400
Rent and Rates: 12,200
Direct Mining Transportation Cost: 1,190
Direct Mining Cost: 47,400
Gross Profit: 64,610
Dividends Income (net): 3,900
Interest on Foreign Deposit: 2,750
Total: 71,260
Salaries and Wages: 25,340
Depreciation of Mining Plant: 2,500
Depreciation (Other Non-Current Assets): 7,840
Other Administrative and General Expenses: 4,210
Loan Interest: 850
Loss on Sale of Old Mining Plant: 200
Net Profit: 30,320

Additional Information:

Interest on foreign deposit was repatriated through the company’s domiciliary account in a Nigerian deposit money bank.
Unrelieved losses amount to N2,800,000.
Capital allowance agreed with tax authorities for the year was N7,250,000.
Tax written down value of qualifying capital expenditure as of December 31, 2021, was N35,110,000, while net book value was N23,700,000.
Opening tax written down values and net book values were N42,620,000 and N33,900,000, respectively.
Unpaid tax at the beginning of the year was N15,620,000, with payments made during the year totaling N18,860,000.
Depreciation rate of 10% per annum applies to the mining plant.
The mining plant was revalued in 2017, with a revaluation surplus of N5 million included in the financial statements that year.

Required:

You have been directed by your Principal Partner to work on this assignment and prepare a draft report for his review. The report should show the computation of the following:

Tax liabilities for the relevant year of assessment
(7 Marks)
Deferred tax provisions for 2021 and 2022
(8 Marks)

Total: 15 Marks

Answer

Find Related Questions by Tags, levels, etc.

Topic: Taxation and Corporate Governance
Series: NOV 2022

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

Question

Mr. Abass works with the Federal Ministry of Works, Abuja. He lives in a self-contained flat in Gwagwalada and travels every weekend to see his first wife and children in Kaduna. He also visits and stays with his second wife and children in Nyanya, Nassarawa State on Thursdays and Fridays of every week.

Required:
Determine the tax authority to which Mr. Abass would be liable to tax in any year of assessment.

Answer

Find Related Questions by Tags, levels, etc.

Tags: : Principal Place of Residence, Multiple Residences, Nigerian Tax Law, Tax authority, Tax residency
Level: Level 2

Topic: Personal Income Tax
Series: NOV 2015

TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement

Identify the badges of trade and compute the minimum tax payable for a given year of assessment.

Question

a. The difficulty in determining what constitutes a trade has led to many litigations and the huge number of tax cases that exist on the issue. The problem from the decided cases is that of finding an absolute test for identifying a trade.

The conclusion had always been that there are no fixed rules but that each case could be examined on its own facts.
Required:
State FOUR considerations that influence the identification of badges of trade. (8 Marks)

b. Ndakogi Nigeria Limited commenced business in 2007. The extract of the statement of profit or loss of the company for the year ended December 31, 2021, has revealed the following:

Required:
Compute the minimum tax payable

Answer

Find Related Questions by Tags, levels, etc.

Tags: Badges of Trade, Minimum Tax, Nigerian Tax Law, Tax computation
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2022

TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System

Discuss the tax filing obligations and implications of non-compliance for a new company, covering both corporate tax and VAT.

Question

Mr. Danko Chinyere, who has worked in a neighboring African country for many years, returned to Nigeria in August 2018. He incorporated a private limited liability company known as ChiDan Limited located in Lagos on October 30, 2018. The company deals in processing and packaging of plantain chips for local consumption.

The directors of the company opened a business bank account with one of the leading commercial banks in November 2018. The company commenced full operations on January 2, 2019.

Your firm, Adama & Co., was appointed as the tax consultant to ChiDan Limited in January 2021. At the first engagement meeting with the company, you discovered that the company was yet to register with the Federal Inland Revenue Service (FIRS). Relevant taxes, including value-added tax (VAT), were not remitted to FIRS.

An extract of the company’s first set of financial statements made up to December 31, 2020, is as follows:

Required:
Advise management of the company on the following:
a. Due date for submission of audited financial statements to the tax office. (2 Marks)
b. Requirements for filing of VAT returns and remittance of VAT liabilities – Section 16 of VAT Act (as amended). (4 Marks)
c. Basis of assessment on commencement of business – Section 29 (3) of CITA
(as amended) (6 Marks)
d. The income tax liabilities payable for the relevant year of assessment
(18 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Commencement Rules, Corporate Tax, Nigerian Tax Law, Tax Filing, VAT Compliance
Level: Level 2

Topic: The Nigerian Tax System
Series: MAY 2022

TAX – May 2019 – L2 – Q3a – The Nigerian Tax System

Explain tax collection responsibilities of different government tiers and define residency rules for tax purposes in Nigeria.

Question

Mr. Chukwudi, your mentee from childhood, has always been guided by your advice. He travelled to the United States to actualise his dreams. He subsequently obtained a degree in accountancy/taxation from a leading University and worked in the United States until November 30, 2016, when he returned to Nigeria. In January 2017, he attended a written interview for a post of a tax manager at the Federal Inland Revenue Service but failed the interview because of his poor knowledge of the Nigerian tax laws. Mr. Chukwudi is likely to be shortlisted for the position of inspector of taxes in his state of origin and has sought your advice on some areas of the Nigerian tax laws.

You are required to provide explanations on the following:

(a) (i) The various tiers of government and their revenue authorities, responsible for the collection of levies and taxes in Nigeria. (3 Marks)
(ii) Four specific taxes and levies collectible by different tiers of government. (6 Marks)
(iii) A resident individual in Nigeria, for a particular year of assessment. (3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Nigerian Tax Law, Resident Individual, Tax Authorities, Tax Collection, Tiers of Government
Level: Level 2

Topic: The Nigerian Tax System
Series: MAY 2019

ATAX – May 2019 – L3 – Q6 – Transfer Pricing

Outline key aspects of transfer pricing regulations in Nigeria, including objectives, key concepts, and methods.

Question

You are required to outline relevant points to address the following issues:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Arm's Length, Nigerian Tax Law, Taxable Persons, Transfer Pricing, Transfer Pricing Methods
Level: Level 3

Topic: Transfer Pricing

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

Calculate the tax liabilities and deferred tax provisions for ICTREC Mining Company Limited, ensuring compliance with Nigerian tax law and addressing FIRS requirements for accurate financial reporting. The report will guide the company in meeting its tax obligations and preparing financial statements free of queries.

Question

Income and Expenses (N’000):

Turnover: 125,400
Rent and Rates: 12,200
Direct Mining Transportation Cost: 1,190
Direct Mining Cost: 47,400
Gross Profit: 64,610
Dividends Income (net): 3,900
Interest on Foreign Deposit: 2,750
Total: 71,260
Salaries and Wages: 25,340
Depreciation of Mining Plant: 2,500
Depreciation (Other Non-Current Assets): 7,840
Other Administrative and General Expenses: 4,210
Loan Interest: 850
Loss on Sale of Old Mining Plant: 200
Net Profit: 30,320

Additional Information:

Interest on foreign deposit was repatriated through the company’s domiciliary account in a Nigerian deposit money bank.
Unrelieved losses amount to N2,800,000.
Capital allowance agreed with tax authorities for the year was N7,250,000.
Tax written down value of qualifying capital expenditure as of December 31, 2021, was N35,110,000, while net book value was N23,700,000.
Opening tax written down values and net book values were N42,620,000 and N33,900,000, respectively.
Unpaid tax at the beginning of the year was N15,620,000, with payments made during the year totaling N18,860,000.
Depreciation rate of 10% per annum applies to the mining plant.
The mining plant was revalued in 2017, with a revaluation surplus of N5 million included in the financial statements that year.

Required:

You have been directed by your Principal Partner to work on this assignment and prepare a draft report for his review. The report should show the computation of the following:

Tax liabilities for the relevant year of assessment
(7 Marks)
Deferred tax provisions for 2021 and 2022
(8 Marks)

Total: 15 Marks

Answer

Find Related Questions by Tags, levels, etc.

Topic: Taxation and Corporate Governance
Series: NOV 2022

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

Question

Required:
Determine the tax authority to which Mr. Abass would be liable to tax in any year of assessment.

Answer

Find Related Questions by Tags, levels, etc.

Tags: : Principal Place of Residence, Multiple Residences, Nigerian Tax Law, Tax authority, Tax residency
Level: Level 2

Topic: Personal Income Tax
Series: NOV 2015

TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement

Identify the badges of trade and compute the minimum tax payable for a given year of assessment.

Question

b. Ndakogi Nigeria Limited commenced business in 2007. The extract of the statement of profit or loss of the company for the year ended December 31, 2021, has revealed the following:

Required:
Compute the minimum tax payable

Answer

Find Related Questions by Tags, levels, etc.

Tags: Badges of Trade, Minimum Tax, Nigerian Tax Law, Tax computation
Level: Level 2

Topic: Tax Administration and Enforcement
Series: MAY 2022

TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System

Discuss the tax filing obligations and implications of non-compliance for a new company, covering both corporate tax and VAT.

Question

The directors of the company opened a business bank account with one of the leading commercial banks in November 2018. The company commenced full operations on January 2, 2019.

An extract of the company’s first set of financial statements made up to December 31, 2020, is as follows:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Commencement Rules, Corporate Tax, Nigerian Tax Law, Tax Filing, VAT Compliance
Level: Level 2

Topic: The Nigerian Tax System
Series: MAY 2022

TAX – May 2019 – L2 – Q3a – The Nigerian Tax System

Explain tax collection responsibilities of different government tiers and define residency rules for tax purposes in Nigeria.

Question

You are required to provide explanations on the following:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Nigerian Tax Law, Resident Individual, Tax Authorities, Tax Collection, Tiers of Government
Level: Level 2

Topic: The Nigerian Tax System
Series: MAY 2019

Question Tag: Nigerian Tax Law

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

ATAX – May 2019 – L3 – Q6 – Transfer Pricing

Outline key aspects of transfer pricing regulations in Nigeria, including objectives, key concepts, and methods.

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement

Identify the badges of trade and compute the minimum tax payable for a given year of assessment.

TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System

Discuss the tax filing obligations and implications of non-compliance for a new company, covering both corporate tax and VAT.

TAX – May 2019 – L2 – Q3a – The Nigerian Tax System

Explain tax collection responsibilities of different government tiers and define residency rules for tax purposes in Nigeria.

ATAX – May 2019 – L3 – Q6 – Transfer Pricing

Outline key aspects of transfer pricing regulations in Nigeria, including objectives, key concepts, and methods.

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement

Identify the badges of trade and compute the minimum tax payable for a given year of assessment.

TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System

Discuss the tax filing obligations and implications of non-compliance for a new company, covering both corporate tax and VAT.

TAX – May 2019 – L2 – Q3a – The Nigerian Tax System

Explain tax collection responsibilities of different government tiers and define residency rules for tax purposes in Nigeria.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Nigerian Tax Law

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

ATAX – May 2019 – L3 – Q6 – Transfer Pricing

Outline key aspects of transfer pricing regulations in Nigeria, including objectives, key concepts, and methods.

You're reporting an error for "ATAX – May 2019 – L3 – Q6 – Transfer Pricing"

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

You're reporting an error for "AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance"

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

You're reporting an error for "TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)"

TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement

Identify the badges of trade and compute the minimum tax payable for a given year of assessment.

You're reporting an error for "TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement"

TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System

Discuss the tax filing obligations and implications of non-compliance for a new company, covering both corporate tax and VAT.

You're reporting an error for "TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System"

TAX – May 2019 – L2 – Q3a – The Nigerian Tax System

Explain tax collection responsibilities of different government tiers and define residency rules for tax purposes in Nigeria.

You're reporting an error for "TAX – May 2019 – L2 – Q3a – The Nigerian Tax System"

ATAX – May 2019 – L3 – Q6 – Transfer Pricing

Outline key aspects of transfer pricing regulations in Nigeria, including objectives, key concepts, and methods.

You're reporting an error for "ATAX – May 2019 – L3 – Q6 – Transfer Pricing"

AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance

You're reporting an error for "AT – Nov 2022 – L3 – Q7 -Taxation and Corporate Governance"

TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)

This question requires determining the appropriate tax authority for an individual with multiple places of residence.

You're reporting an error for "TAX – Nov 2015 – L2 – Q4b – Personal Income Tax (PIT)"

TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement

Identify the badges of trade and compute the minimum tax payable for a given year of assessment.

You're reporting an error for "TAX – May 2022 – L2 – SA – Q6 – Tax Administration and Enforcement"

TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System

Discuss the tax filing obligations and implications of non-compliance for a new company, covering both corporate tax and VAT.

You're reporting an error for "TAX – May 2022 – L2 – SA – Q1 – The Nigerian Tax System"

TAX – May 2019 – L2 – Q3a – The Nigerian Tax System

Explain tax collection responsibilities of different government tiers and define residency rules for tax purposes in Nigeria.

You're reporting an error for "TAX – May 2019 – L2 – Q3a – The Nigerian Tax System"

Our offerings

Contact Info

Customer

Get In Touch

admin