The Federal Inland Revenue Service (FIRS) has released the Income Tax (Country-by-Country Reporting (CbCR)) Regulations on June 19, 2018. It was published in an official gazette on January 8, 2018. This CbCR Regulations give guidelines to multinational enterprises (MNEs) on how they fulfill their reporting responsibilities to Federal Inland Revenue Service (FIRS) along with their group income, taxes paid, and other indicators of their group economic activity. These information allows FIRS perform high-level transfer pricing risk assessment and also evaluate other BEPS related risks. The CbC reporting regulations effects for reporting accounting years starting on or after January 1, 2018. Some of the key points of the regulations are given below:

General Rule

The content of the CbC report should follow BEPS Action 13 guidelines. It should be filed in English, with further instructions to be issued by FIRS.

Each Ultimate Parent Entity (UPE) of an MNE Group having N160,000,000,000 or more than the amount is obliged to submit a CbC report in a defined format with the FIRS on an annual basis, conditioning that such entity is resident in Nigeria for tax purposes. A Constituent Entity of an MNE Group that satisfies certain conditions will be required to file a CbC report with the FIRS within the deadline period. But, a Constituent Entity will not be required to submit a CbC Report if same has been filed through a Surrogate Parent Entity in the format specified in the Regulations. Any Constituent Entity that is resident in Nigeria for tax purposes should inform the FIRS whether it is a UPE or Surrogate Parent Entity. Where it is neither of the two, it should notify the FIRS of the identity and tax residence of the Reporting Entity not later than the last day of the Reporting Accounting Year of the MNE Group.

Deadline

The CbC Report should be submitted not later than 12 months after the end of the Reporting Accounting Year of the MNE Group.

Penalty for non-compliance

Failure to submit the CbC Report within the due time would face a penalty of N10, 000,000 in the first instance and N1,000,000 for every month in which the default continues. Again, N10, 000,000 would have charged for submitting an incorrect or false CbC report and for providing late notification, the penalty would be N5,000,000 plus N 10,000 per day of delay.