The world is constantly evolving. Internet and technology advancements have given individuals and business entities easier access to offshore banking and investment accounts. It has been alleged that these offshore bank accounts are sometimes used to hide taxable income from tax authorities.
In response, in September 2013 the G-20 countries asked the OECD to develop a common reporting standard to enable effective crossborder cooperation among tax administrations in participating countries. The result is the Common Reporting Standard — Multilateral Competent Authority Agreement (CRS-MCAA), which seeks to narrow the gap for cross-border tax evasion, reinforce confidence in the tax system, and boost state revenue. There are 110 countries committed to exchanging information under the CRSMCAA.1
In 2017 Nigeria signed the CRS-MCAA, committing itself to the exchange of information of residents of other participating jurisdictions. To this end, the Federal Inland Revenue Service (FIRS) issued the Income Tax (Common Reporting Standard) Regulations, 2019, and the Income Tax (Common Reporting Standard) Implementation and Compliance Guidelines as the legal basis for the implementation of automatic exchange of information (AEOI). The regulations and guidelines provide the administrative framework and requirements for the successful implementation of the CRS in Nigeria.
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by Mayowa Falohun and Stella Okeke
Mayowa Falohun (mayowa.falohun@ng. kpmg.com) is an assistant manager and Stella Okeke (stella.okeke@ng.kpmg.com) is a senior tax adviser with the Tax, Regulatory & People Services division of KPMG Advisory Services in Lagos, Nigeria.
In this article, the authors discuss how stakeholders in Nigeria will benefit from the adoption of the common reporting standard.