The Federal Inland Revenue Service (FIRS) on 17 September 2020, released a public notice (the Notice) requesting all account holders with Reporting Financial Institutions (RFIs), such as commercial banks, insurance companies, asset management companies etc., to obtain, complete and submit Self-Certification Forms (SCFs) to their respective financial institutions. However, FIRS clarified in a subsequent tweet that only holders of reportable accounts in RFIs are required to comply with this requirement.
The Notice was issued pursuant to the Income Tax (Common Reporting Standard) Regulations, 2019 (the CRS Regulations) and FIRS’ Information Circular No. 2019/02 on the CRS Regulations, mandating RFIs to prepare and file annual information return of reportable accounts by 31 May of the year following the calendar year to which the return relates. The first set of returns is due by 30 September 2020 following a 4-month extension of the filing deadline granted by FIRS in the light of the COVID-19 pandemic.
According to the CRS Regulations, a reportable account is an account held by an individual or entity (including partnerships) or a passive non-financial entity (NFE) with controlling person (i.e. individuals having a controlling interest (25% or more) in a legal person, a trustee, settlor or beneficiary in respect of a trust etc.) that is tax resident in any country other than Nigeria. Therefore, the RFIs, as part of the due diligence procedures are required to obtain self-certification from such account holders or their controlling persons in line with the requirements of the CRS Regulations.
The three categories of SCFs are:
The SCFs are essentially templates to help RFIs fulfil their obligation to file information returns and can be accessed by reportable account holders on FIRS’ website www.firs.gov.ng or from their financial institutions. It is expected that FIRS will permit RFIs to create electronic versions of the SCFs to help them avoid the additional burden and cost of processing hardcopy data forms.
Please refer our earlier alert for further information on the common reporting standards.