b) Double taxation agreements exist among Nigeria and some foreign countries.
Required:
Explain the term “Permanent Establishment” as contained in the double taxation agreement between Nigeria and the United Kingdom.
(5 Marks)
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(a) Sadiq Corporation was incorporated in Sweden as a limited liability company and has a subsidiary, Omologede Ventures Nigeria Limited located in Akure, Nigeria. Peniel Nigeria Plc awarded a contract to Sadiq Corporation to renovate a rice milling factory in Gboko, Benue State, and another in Abakaliki, Ebonyi State. The contract value for the Gboko factory is $11,064,150, and $7,337,616 for the Abakaliki factory. Sadiq Corporation later sub-contracted the two jobs to its subsidiary in Nigeria. The renovation is expected to be completed within six months.
The following information was submitted to the Federal Inland Revenue Service by Omologede Ventures Nigeria Limited for the year ended December 31, 2017:
| Description | Amount (N) |
|---|---|
| Direct materials | 962,100,000 |
| Scaffolding | 183,538,320 |
| Administrative expenses on hired professionals | 33,352,800 |
| Rentals on equipment | 18,708,248 |
| Maintenance of equipment | 7,431,688 |
| Personnel card (domestic) | 28,803,029 |
| Personnel cost (foreign) | 14,738,250 |
| Fees to engineers | 11,298,689 |
| Other operational costs | 6,512,070 |
Additional Information:
Withholding tax provisions were fully complied with by the two companies, and the tax remitted to the relevant tax authority as and when due.
Required:
As the local consultancy firm in Nigeria, provide advice to the management of the two companies on the tax implications of the contracts for the relevant year of assessment, clearly showing their tax liabilities (if any).
(15 Marks)
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Which of the following is NOT a function of the Joint Tax Board?
A. Exercise the powers or duties conferred on it by the PITA and other Acts
B. Advise the Federal Government on request, in respect of rates and capital allowances and other taxation matters, having effect throughout Nigeria in respect of any proposed amendment to PITA
C. Advise the Federal Government, on request, in respect of double taxation agreement with any other country
D. Advise the State Board on all its powers and duties
E. Impose its decision, on matters of procedure and interpretation of PITA, on any State, for purposes of conforming to agreed procedures or interpretations
Find Related Questions by Tags, levels, etc.
b) Double taxation agreements exist among Nigeria and some foreign countries.
Required:
Explain the term “Permanent Establishment” as contained in the double taxation agreement between Nigeria and the United Kingdom.
(5 Marks)
Find Related Questions by Tags, levels, etc.
(a) Sadiq Corporation was incorporated in Sweden as a limited liability company and has a subsidiary, Omologede Ventures Nigeria Limited located in Akure, Nigeria. Peniel Nigeria Plc awarded a contract to Sadiq Corporation to renovate a rice milling factory in Gboko, Benue State, and another in Abakaliki, Ebonyi State. The contract value for the Gboko factory is $11,064,150, and $7,337,616 for the Abakaliki factory. Sadiq Corporation later sub-contracted the two jobs to its subsidiary in Nigeria. The renovation is expected to be completed within six months.
The following information was submitted to the Federal Inland Revenue Service by Omologede Ventures Nigeria Limited for the year ended December 31, 2017:
| Description | Amount (N) |
|---|---|
| Direct materials | 962,100,000 |
| Scaffolding | 183,538,320 |
| Administrative expenses on hired professionals | 33,352,800 |
| Rentals on equipment | 18,708,248 |
| Maintenance of equipment | 7,431,688 |
| Personnel card (domestic) | 28,803,029 |
| Personnel cost (foreign) | 14,738,250 |
| Fees to engineers | 11,298,689 |
| Other operational costs | 6,512,070 |
Additional Information:
Withholding tax provisions were fully complied with by the two companies, and the tax remitted to the relevant tax authority as and when due.
Required:
As the local consultancy firm in Nigeria, provide advice to the management of the two companies on the tax implications of the contracts for the relevant year of assessment, clearly showing their tax liabilities (if any).
(15 Marks)
Find Related Questions by Tags, levels, etc.
Which of the following is NOT a function of the Joint Tax Board?
A. Exercise the powers or duties conferred on it by the PITA and other Acts
B. Advise the Federal Government on request, in respect of rates and capital allowances and other taxation matters, having effect throughout Nigeria in respect of any proposed amendment to PITA
C. Advise the Federal Government, on request, in respect of double taxation agreement with any other country
D. Advise the State Board on all its powers and duties
E. Impose its decision, on matters of procedure and interpretation of PITA, on any State, for purposes of conforming to agreed procedures or interpretations
Find Related Questions by Tags, levels, etc.
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