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Africa: Tax in brief

Thursday, 25 September 2014   (0 Comments)
Posted by: Author: Celia Becker
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Author: Celia Becker (ENSafrica)

Namibia:  Large Taxpayers’ Office launched

With effect from July 2014 large taxpayers, including companies and insurers with turnover in excess of N$75 million per year, mining companies and banks (including micro-lending institutions) are to be managed by the Large Taxpayers’ Office (LTO) located in the Millennium Building, at the corner of Robert Mugabe Avenue and Dr.A.B. May Street.

The LTO is planning to introduce specialised units focusing on mining taxation, transfer pricing and thin capitalisation.

Nigeria:  Non-resident companies to file tax returns with audited financial statements

In terms of a practice based on section 30 of the Nigerian Income Tax Act, 2004, non-resident companies operating in Nigeria were allowed to file their companies income tax returns on a deemed profit basis. (The Federal Inland Revenue (FIRS) prescribed that a deemed profit of 20% of turnover was to be taxed at the corporate income tax rate of 30%)

At a stakeholder meeting of 24 July 2014, the FIRS announced that the income tax returns filed by foreign companies doing business in Nigeria will no longer be accepted unless accompanied with audited financial statements as well as, inter alia, tax and capital allowance computations as required by section 55 of the Income Tax Act.

It is understood that this new position of the FIRS has been introduced as a result of the implementation of transfer pricing regulations and is intended to provide the FIRS with useful information to ensure full tax compliance and address potential transfer pricing issues.

Rwanda:  New double tax agreement with Mauritius in operation

The Mauritius Ministry of Finance and Economic Development on 19 August 2014 published a communique announcing that the new double tax agreement signed between Mauritius and Rwanda on 20 April 2013  entered into force on 4 August 2014.

The provisions of the new treaty shall apply in Rwanda in respect of any year of income commencing on or after 1 January 2013 and in Mauritius in respect of any period commencing on or after 1 July 2013.

Zambia:  Tax rules on copper exports to be relaxed

The Zambian government announced on 26 August 2014 that it intends to ease the tax rules on copper exports by scrapping the requirement that copper mining companies are to present import certificates from destination countries in order to claim Value Added Tax (VAT) refunds.  Many companies sell minerals to brokers, making it virtually impossible for them to obtain the required import documentation from destination countries.  More than USD600 million has been accumulated in value added tax refunds since last year.

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