TAX MASTERS EARLY BIRD DISCOUNT

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TAXABLE BENEFITS OF INDIVIDUALS

Benefits In Kind (BIKs) is defined as an expense incurred by an employer for the personal benefit of employees and includes company cars, free or subsidized accommodation etc. For tax purposes, BIKs are deemed to be additional income accruing to the employees in the course of employment and are therefore taxable.

Any benefit, salary, wage, fee, allowance, compensation, bonus, premium, or other perquisite enjoyed by an employee (whether temporary or permanent) in Nigeria are subject to tax, and form part of the employees’ gross emolument.

Under the Personal Income Tax Act, when an employer’s asset is enjoyed by an employee for his personal benefit, the deemed value of such benefit accruing to the employee is 5% of the annual acquisition cost if known, or 5% of the market value of the asset at the time of acquisition as determined by the revenue.

Furthermore, where the employee enjoys the benefits of assets rented or hired by the employer, the employee shall be treated as being in receipt of emolument on the amount incurred by the employer.

The implication of the above is that all such amounts as determined thereof shall form part of employment benefits of the employee, and are taxable.

Click http://taxmastersclass.blogspot.com.ng/2017/02/tax-masters-training.html 

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CIRCULAR ON NATIONWIDE IMPLEMENTATION OF THE CASH-LESS POLICY

On 21^st February, 2017, the Central Bank of Nigeria (CBN) issued a circular titled “Circular on Nationwide Implementation of the Cash-Less Policy”

The circular seeks to extend the Cash-Less Policy to the remaining 30 states of the Federation.

The Circular re-introduces charges on deposits and also reviews the current charges on cash deposits and withdrawals. The new rates are indicated in the table below:

	AMOUNT	DEPOSIT	WITHDRAWALS
INDIVIDUAL	Less than N500,000	No Charges	No Charges
	N 500,000- N 1M	1.50%	2%
	Above N 1M- N 5M	2%	3%
	Above N 5M	3%	7.50%
CORPORATE	Less than  N 3,000,000	No Charges	No Charges
	N 3M-10M	2%	5%
	Above  N 10M- 40M	3%	7.50%
	Above  N 40M	5%	10%

EFFECTIVE DATE

Distinct timelines were adopted in the implementation of the policy in different states of the Federation. The implementation of the charges will take effect as follows: 

·          From 1^st April 2017, the new charges will take effect in Lagos, Ogun, Kano, Abia, Anambra, Rivers State and the FCT.

• On 1^st May 2017, the policy will be implemented in the following states: Bauchi, Bayelsa,   Delta, Enugu, Gombe, Imo, Kaduna, Ondo, OSun and Plateau. 

• On 1^st August 2017, the policy shall be implemented in Edo, Katsina, Jigawa, Niger, Oyo, Adamawa, Akwa-Ibom, Ebonyi, Taraba and Nasarawa State.

• On 1^st October 2017, the policy shall be implemented in the following states: Borno, Benue, Ekiti, Cross- River, Kebbi, Kogi, Kwara, Yobe, Sokoto and Zamfara.

 Income generated from the above transaction charges will be shared between the CBN and the banks in the ratio of 40:60

EXEMPTIONS

The following are exempted from the policy:

• ·        Revenue generating accounts of the Federal, State and Local Governments. ( lodgments only); and
• ·         Embassies, Diplomatic Missions, Multilateral and Aid Donor Agencies in Nigeria.

  Download the Circular here:  https://dochub.com/taxmasterstraining/Q6nXBo/circular-on-nationwide-implementation-of-cash-less-policy?dt=266s7lylmin5x4cw

WITHHOLDING TAX IN NIGERIA

Withholding Tax (WHT) was introduced in Nigeria in 1977 with limited coverage to rent, dividends and directors fees. WHT has been expanded to include: -

·         all aspect of building, construction and related services;

·      all types of contract and agency arrangement, other than outright sale and purchase of goods and property in the ordinary course of business;

·         Consultancy, Technical and Professional services;

·         Management services;

·         Commissions;

·         Interest; and

·         Royalty.

WHT will not apply where a manufacturer delivers its normal products to its dealers or distributors for sale; and where there is dual relationship, for example a manufacturer requesting for supply of raw materials for the manufacturing of its products from a defined supplier.

Incomes earned by non – resident companies for services rendered outside Nigeria are generally not liable to WHT since the income itself would not be liable to Nigerian tax.

WHT do not constitute the final tax for companies operating in Nigeria, except for cases such as interest and dividend.  A tax payer is expected to obtain withholding tax credit notes from the relevant tax authority via the taxable party that withheld the tax. Unutilised WHT tax credit can be set off against future income tax.

APPLICABLE WHT RATES

The applicable WHT rates on transactions or services involving companies and/or individuals are specified in the table below:

Types of payment	Applicable rates for Companies	Applicable rates for Individual
Dividends, Interest, Rent	10%	10%
Directors Fees	10%	10%
Royalties	10%	5%
Commission, Consultation, Technical, Service Fees	10%	5%
Management fees	10%	5%
Construction/Building Contracts	5%	5%
Contracts, other than outright sales  and purchase of goods in the ordinary course of business	5%	5%

Note that countries that are parties to bilateral Double Taxation Treaties with Nigeria are granted a reduced rate of WHT.

WHT IMPLICATIONS ON NON RESIDENT COMPANIES/ENTERPRISES

In practice, non-resident companies are not authorized to deduct any type of WHT. These categories of enterprises are practically outside the regulatory monitoring and control of the Tax authorities. 

Read the article here: https://dochub.com/taxmasterstraining/8PM9Bm/withholding-tax-taxmasters?dt=c1e4tigrxiiifh61

Click http://taxmastersclass.blogspot.com.ng/2017/02/tax-masters-training.html 

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TAX MASTERS TRAINING

The Tax Masters Special Training is designed to simplify tax issues, broaden tax knowledge and proffer solutions to real life tax issues. The training is scheduled to hold on:

• 7^th April, 2017 at the Sheraton Hotel, Ikeja Lagos, and;
• 5^th May, 2017 at Chelsea Hotel, Central Business District, Abuja.

Tax authorities and private tax practitioners will participate in this programme thus providing an opportunity for robust interactions.

To register, click on this link: https://docs.google.com/forms/d/e/1FAIpQLSdUZv3UdonRGey-fIRRH1RdBi33XeERPmTys0XE3Uvb4TSUCw/viewform and fill the registration form. 

For enquiries please contact us on 08164348117, 08037403389 and 08025050053 also send your emails to taxmasters@wtsnigeria.com.

INSIGHTS ON CAPITAL GAINS TAX

Capital Gains Tax (CGT) is imposed on gains accruing to any person on disposal of assets under the Capital Gains Tax Act (CGTA). The applicable tax rate for CGT is 10%.

CGT in respect of companies are collected by the Federal Inland Revenue Service (FIRS), while the State tax authority covering the location where an individual resides collects the individual’s CGT. Roll-over relief is available to any company acquiring a new asset to be used for the purposes of the trade in replacement of an old one.

Where assets situated outside Nigeria are disposed by a non-Nigerian company, or an expatriate, CGT is only charged in respect of that part of the gain (if any) which is brought into or received in Nigeria. Generally, gains on transfer of securities, stocks and shares are exempt from CGT.

CHARGEABLE ASSET

All forms of property are classified as assets for the purposes of CGTA whether situated in Nigeria or not (except specifically excluded). These properties include:

a.    options, debts and incorporeal properties generally;
b.    any currency other than Nigerian currency; and

c.    any form of property created by the person disposing  it, or otherwise coming to be owned without being acquired.
 

EXCLUSION FROM CHARGEABLE ASSETS

CGTA exempts some gains from taxation; these include gains accruing to/from:

(a)        Charities and Statutory bodies;
(b)        Retirement Benefit Schemes;
(c)        Decorations;
(d)        Stocks and Shares;
(e)        Replacement of Business Assets;
(f)        Re-invested Proceeds;
(g)       Life Assurance Policies and other Insurance Policies;
(h)        Motor Cars;
(l)        Gifts;
(j)         Disposal of Principal Private Residence;
(k)        Chattels sold for N1, 000 or less in a year; and
(l)        Compensation from Personal Injury.

CALCULATION OF CAPITAL GAINS
 
Capital gains represent mainly the excess of disposal proceeds over the cost of the particular assets.
 
In the computation of any chargeable gains, gains chargeable to tax shall be the difference between the consideration accruing to any person on the disposal of an assets and any sum to be excluded from that consideration, and the amount of the value of any expenditure allowable to such person on such disposal.
 

 Read the article here: https://drive.google.com/file/d/0B3zHF7bcT3dOT1o1LXRoOXZrd3M/view?usp=sharing

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HIGHLIGHTS OF THE TAX MASTERS SPECIAL TRAINING

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For other relevant information click on this link: http://taxmastersclass.blogspot.com.ng/2017/01/have-you-registered-for-our-tax-masters.html