Authors: Taiwo Oyedele, Moshood Olajide and Chukwuemeka Onuoha (PwC Nigeria)
The Court of Appeal ("CA”) on 2 December 2014 delivered a judgment on the deductibility of recharges by non-resident companies filing income tax returns under the deemed profit regime in a case brought before it by the Federal Inland Revenue Service ("FIRS”) against Halliburton West Africa Limited ("HWAL”).
The CA overturned the decision of the Federal High Court ("FHC”) which had set aside the judgment of the Body of Appeal Commissioners ("BAC”) that decided the case in favour of the FIRS. The CA ruled in effect that where a non-resident company is assessed to tax on deemed profits basis, additional tax assessments can be raised by the FIRS on the discovery of new facts or previously undisclosed information.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.