(a): Peculiarities of Withholding Tax

Withholding Tax (WHT) is a tax deducted at the source from payments made to taxable persons for goods and services. It serves as an advance payment of tax for the recipient, who can offset it against other tax liabilities. In certain cases, the WHT deducted at the source acts as a final tax for the recipients.

Part (b): Withholding Tax in International Transactions

i. Rate of Withholding Tax: For recipients from countries with a Double Tax Treaty with Nigeria, the WHT rate is reduced to 7.5% for dividends, interest, and royalties as per the terms of the treaty.

ii. Types of Income Involved:

1. Royalties
2. Interest
3. Dividends

Part (c): Currency of Payment for Non-Naira Transactions

Where the transaction currency is not in Naira, Withholding Tax should be withheld in the foreign currency and paid to the relevant tax authority via the Central Bank of Nigeria (CBN). The CBN will then convert the foreign currency to Naira using the current exchange rate and credit the appropriate government account with the equivalent sum.

Part (d): Required Particulars in Withholding Tax Payment Schedule

A valid Withholding Tax Payment Schedule should include the following particulars:

1. Name of the taxpayers subject to the withholding tax deductions.
2. Addresses of these taxpayers.
3. Nature of activities or services provided and the period covered.
4. Tax Identification Number (TIN) of each taxpayer.
5. Total amount payable and amount of tax withheld.