Tax Alert

The Federal Inland Revenue Service (FIRS or “the Service”) has issued a public notice (hereafter referred to as “the Notice”) on the migration of the electronic platform for filing Transfer Pricing (TP) returns and Country-by-Country Reporting (CbCR) notifications from E-TPPLAT to TaxPro-Max (TPM). According to the FIRS, this action is in line with its commitment to continuously improve the efficiency of its processes to alleviate the compliance burden on taxpayers.

The key highlights from the notice are as follows:

1. Migration to the TaxPro Max Platform:
   
   The filing of TP returns and CbCR notifications, which was previously done annually on the FIRS’ E-TPPLAT portal, has now been migrated to the TPM platform. Consequently, taxpayers are now required to file their TP returns and CbCR notifications on TPM using the TPM login details they use for normal tax filings with the FIRS.
   
   
2. Filing Deadline:
   
   Through the Notice, the Service has granted both existing and prospective taxpayers until 30 June 2024, to fulfill all pending filing obligations relating to their TP returns and/or CbCR notifications on TPM.
   
   
3. Waiver of Penalties: 
   
   Administrative penalties previously imposed or that may be imposed by the FIRS, or in accordance with the Income Tax (Transfer Pricing) Regulations, 2018 and the Income Tax (Country-by-Country) Regulations, 2018, will be waived for taxpayers who comply with point (2) above. However, penalties will be imposed on taxpayers that fail to comply accordingly.
   
   
4. Re-filing Option:
   
   Taxpayers may choose to re-file returns previously submitted on E-TPPLAT on the TPM platform.

The FIRS indicated in the Notice that taxpayers requiring further clarification should contact the office of the Executive Chairman of the FIRS or the Director of the FIRS’ International Tax Department for assistance.

The E-TPPLAT portal was launched by the FIRS in March 2020 to enable seamless, electronic filing of annual TP and CbCR returns by taxpayers. The TPM platform was subsequently introduced by the Service in June 2021 for taxpayers’ electronic filing of Naira-denominated direct and indirect tax returns with the FIRS. Consequently, up until now, taxpayers were required to register on both the TPM and E-TPPLAT platforms to discharge their tax, TP and CbCR filing obligations. This resulted in information, such as corporate income tax returns and financial statements, being submitted twice by taxpayers (i.e., on both the TPM and E-TPPLAT platforms).

The migration of the filing platform for TP and CbCR notifications from E-TPPLAT to TPM is expected to streamline the Service’s corporate income tax and TP filing processes and should, therefore, result in efficiency gains for both taxpayers and the FIRS going forward. However, it is unclear whether the FIRS intends to migrate TP returns and CbCR notifications previously submitted by taxpayers on E-TPPLAT to TPM if taxpayers choose not to resubmit such filings.

The waiver of penalties for taxpayers, who comply with the 30 June 2024 filing deadline, is a welcome development, especially considering the severe impact of the current macroeconomic climate in Nigeria on many corporate taxpayers. Thus, taxpayers with outstanding TP returns and CbCR notifications are expected to seize this opportunity to regularize their TP and CbCR compliance status and avoid the imposition of stiff penalties by the FIRS.

Overall, taxpayers should take heed of the Notice and familiarize themselves with the new protocol for the filing of TP returns and CbCR notifications to ensure a smooth transition and full compliance with their TP and CbCR obligations. Taxpayers facing challenges with the migration of their TP and CbCR filings to TPM are advised to promptly seek support from TP professionals or contact the designated offices of the FIRS to resolve such issues within the stated deadline.

Please click here to read the Public Notice.