The Nigerian company and the non-resident companies (a Portuguese company and a French company) signed a consortium contract with an international oil company, and that contract needed them to carry out distinct place of work. The non-resident companies were liable for the part of the contract to be fulfilled outside Nigeria (offshore) whereas their Nigerian affiliate was liable for the in-country work (onshore). By this time, there was an income tax treaty for the avoidance of double taxation between France and Nigeria.
The High Court held that if that previous position was against to the law, the tax authority was not barred from reversing its position in an advance ruling. The High Court consented with the contentions of the tax authority and held in favor of the government by turning to the assessments due to corporate income tax and withholding tax. In respect of VAT assessment, taxpayers were not responsible for VAT.
