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Nigeria - Apply for Withholding Tax

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Procedure[edit]

1.You will start by registering as a taxpayers at a nearby tax office in your area of operation:-

  • In this case, you go to a nearby tax office and obtain an application for registration form and fill it in completely;
  • Accompanied with proof of identity, submit the filled form to the tax office;
  • Upon submission of documents, your passport photo and finger prints shall be captured by the tax officers;
  • Upon verification of submitted details, a taxpayers identification number (TIN) is issued to you;

2.Thereafter you can proceed with filing the withholding tax returns under the self Assessment Regime

  • You can either file Withholding tax returns in person or you can contact an authorized tax agent to file returns on your behalf. You / your agent should start the filing process by computing the tax liabilities; in this case, you shall be required to make sure that an assessment of taxes payable is done, and then you make payment for the With holding tax(es) due in any designated bank;
  • Thereafter obtain the With holding tax return form for the return you wish to file, fill it completely and submit it with an assessment notice and evidence of payment to the tax authority;

WHT is an advance payment of your income tax, therefore if at the end of a financial year your tax payable is N500,000 and an aggregate of all your WHT credit note is N200,000, the net tax you will pay to the government will be N300,000. That is why it is important to keep your WHT


  • Non-resident companies are subject to Withholding Tax (WHT) deductions on the income they earn from Nigeria. This becomes their tax upon filing returns
  • When the tax authority receives documents, they will assessed to ensure that each and every detail has been filled in the form; then you will be able to get the withholding tax return certificate.



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Required Documents[edit]

Evidence of direct payment of the whole or part of tax due into a bank designated for the payment of tax;
  • Tax Invoices
  • Payment Slips

Companies filing Annual Returns must also provide
  • Audited financial statements;
  • Capital allowances computation;
  • Detailed statement of profits from each transaction
  • Audited financial statements and tax computations (nonresident companies)



Office Locations & Contacts[edit]

VALUE ADDED TAX (VAT)OFFICE

Federal Ministry of Finance

Complex, Abuja.

Tel: 09-2340603

Fax: 09-2 635446


Nigerias Federal Inland Revenue Service

Revenue House, Plot 522 Sokode Crescent,

Off Dalaba Street, Wuse Zone 5, Abuja

Telephone No.: 08159490002, 08159490001, 08159490000

Email: enquiries@firs.gov.ng; complaints@firs.gov.ng or servicom@firs.gov.ng

Website: http://www.firs.gov.ng/

List of regional offices and their addresses of the Federal Inland Revenue Service can be viewed at

http://www.firs.gov.ng/contactus/Pages/FIRS%20Offices.aspx



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Eligibility[edit]

It is applied to Nigerian in receipt of the certain incomes mentioned above



Fees[edit]

  • Its free to apply for withholding tax.
  • Where a person rents or hires property/services from another, WHT at the rate of 10% will applies.
  • Dividends are subject to a 10% withholding tax whether paid to a resident or non-resident unless (in the latter case) the rate is reduced under a tax treaty. Dividends paid between two Nigerian companies are exempt.
  • A withholding tax of 10% is imposed on payments of interest to a resident or nonresident unless the interest is exempt. Exempt interest includes interest on savings accounts, provided the amount deposited is below NGN 50,00



Validity[edit]

This tax should be paid on or before the 20th day of the following month.



Documents to Use[edit]

Please attach documents that can be used by people. e.g. links



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Sample Documents[edit]

Please attach sample completed documents that would help other people.



Processing Time[edit]

  • Using the online method, it is instantly done after clicking the submit button. This usually takes a few minutes.
  • Using manual method, it takes about 30 minutes .



Related Videos[edit]

Videos explaining the procedure or to fill the applications. 
Attach videos using the following tag <&video type="website">video ID|width|height<&/video&> from external websites.
Please remove the "&" inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver, 
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url "http://www.youtube.com/watch?v=Y0US7oR_t3M" Video ID is "Y0US7oR_t3M". 
	



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Instructions[edit]

Employers are required by law to register and deduct tax from payments made to employees in respect of employment income.



Required Information[edit]

1. Proof of employment

2. Proof of identification



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Need for the Document[edit]

Withholding Tax is an advance payment of income tax. In principle, Withholding Tax is a payment on account of the ultimate income tax liability of the taxpayer or company.

Withholding tax is not a separate tax on its own and does not confer an exemption from the filing of annual tax returns by the company which had suffered WHT. The tax is normally to be deducted at source when a payment is to be made to the beneficiary.

The WHT provisions seek to collect taxes that may otherwise have been lost through evasion and/or avoidance.

The aim is to ensure that taxpayers are correctly taxed but it must be understood that transactions that are ordinarily not liable to tax in Nigeria are also not liable to WHT; thus, contracts and supplies of goods and services performed entirely outside Nigeria by non-resident taxpayers will not be liable to WHT.



Information which might help[edit]

Nigeria company or a non-resident company. The tax imposed is regarded as final tax, but corporate bodies are allowed to recoup WHT deduction where the dividend is to be redistributed as Franked Investment Income (FII).

The Petroleum Profit Tax Act (PPTA) however exempts dividends payable by oil producing companies on petroleum operations from WHT imposition.

Interest: This is income from investments of every kind. WHT is applicable to income from government securities and income from bonds or Treasury bills. Interest on loans paid by a Nigerian company is often not subject to WHT.

As a general rule, income on a property (rent, hire or lease payments or rights (royalties) situated in Nigeria is liable to tax in Nigeria, the place of payment notwithstanding.

Where a person rents or hires property/services from another, WHT at the rate of 10% will apply. But where a person provides services to another for e.g. air/land transport service, using its own equipment/facilities, the transaction becomes a contract of services rather than rental or hire.



Other uses of the Document/Certificate[edit]

Please explain what are other uses of obtaining this document/certificate.
e.g. Birth Certificate can be used as proof of identity.



External Links[edit]

http://www.vanguardngr.com/2013/09/administration-withholding-tax-1/

http://www.firs.gov.ng/Tax-Management/Pages/Tax-Types.aspx

http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-nigeriahighlights-2013.pdf

http://www.deloitte.com/view/en_NG/ng/insights/publications/inside-tax/d0205010137d2410VgnVCM3000003456f70aRCRD.htm

http://web.nairametrics.com/a-z-of-withholding-tax-in-nigeria-beginners-guide-for-small-businesses/


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Others[edit]

More information which might help people.