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Federal Inland Revenue Service lifts CbC reports filing suspension

The Federal Inland Revenue Service (FIRS) on 4 January 2022, lifted the suspension of local filing of Country-by-Country (CbC) reports by Nigerian branches and/or subsidiaries of Multinational Entity (MNE) Groups that are not headquartered in Nigeria.

This decision was made consequent to Nigeria being reviewed under the confidentiality and data safeguard requirements for automatic exchange of information and submission of Nigeria’s notification for a reciprocal exchange of CbC reports. You would recall that FIRS had in May 2021 published a notice suspending the requirement for local filing of CbC reports in Nigeria.

Consequently, with effect from January 2022, Nigerian branches and/or subsidiaries of an MNE Group would be required to fully comply with the provisions of Regulation 4 of the Income Tax (Country by Country Reporting) Regulations S.1 No. 6, 2018 (the Regulations) on the local filing of CbC reports where:

  1. The ultimate parent entity of the MNE Group is not obligated tofile a CbC report in its tax jurisdiction; or
  2. The jurisdiction of the ultimate parent entity is a co-signatory,with Nigeria, to the Multilateral Convention for Mutual Administrative Assistance in tax Matters or similar agreements but does not have an agreement that requires automatic exchange of CbC reports with Nigeria.

Based on information available on the website of the Organisation for Economic Cooperation and Development (OECD) as of October 2021, Nigeria can receive CbC reports and information from seventy-eight (78) jurisdictions. Nigerian constituent entities of MNE Groups submitting CbC reports in these jurisdictions would not have to submit CbC reports locally in Nigeria.

In addition to this requirement, it should be noted that the obligation to file an annual CbC notification still subsists. Affected companies are therefore advised to comply with both CbC requirements to avoid penalties.

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