In financial accounting, net profit arises when revenue is greater than the cost otherwise it is a loss. The equation is different when it comes to assessable profit. Assessable profit is the profits from all sources in the year immediately before the year of assessment except in abnormal cases. Abnormal cases are when the basis…
Capital allowance is an allowance granted for income tax purposes instead of depreciation. It reduces the taxable profits and tax liability of a business. However, a taxpayer in Nigeria must fulfill four (4) conditions so as to claim capital allowance in a year of assessment. One of these conditions is that a taxpayer must get…
The Lagos State Internal Revenue Service (LIRS) has changed the tax filing narratives. According to the Personal Income Tax Act (PITA) Cap P8 LFN 2011 (as amended), every employer shall file an employer tax returns (Form H1) with the relevant tax authority by 31 January. In Lagos, a complete Form H1 comprise a printed copy…
An employer is required to deduct Pay-As-You-Earn (PAYE) tax from employees’ salary in each month. Thereafter, the employer must remit the amount to the relevant tax authority within 10 days of the next month. Besides the monthly PAYE tax return, an employer should file an annual tax return. In this piece, BRC addresses nine (9)…
Each country has its own tax laws. Nigeria, for instance, adopts the residency principle while some countries apply the source principle in deciding whether a taxpayer will pay tax in that jurisdiction. Hence, if a business is tax resident in Nigeria and generates income or profit in the United States, this could lead to double…
The going concern principle states that an entity will continue operations in perpetuity. In other words, the entity will not stop operations or liquidate its assets in the short term. Still, certain factors could force a company to stop operations. Constant losses, unfavorable government policy, fall in share price, insolvency, bankruptcy, and dormancy are common examples….
Global mobility will be easier if employment tax rates are the same in every country. Well, it isn’t! The tax liability of an employee often changes during an international assignment. If an expatriate is tax resident in a foreign country, such income will be taxable. Likewise, an expatriate may still attract tax and/or social security…
Businesses often buy items that will generate benefits above 12 months. When these items are also tangible and hard to convert into cash, they are called fixed assets. Each company is free to set a threshold for recognizing fixed assets in its books. A blue-chip company listed on the Nigerian Stock Exchange (NSE) may recognise…
In our daily lives, we usually come across people who sell goods and services to buyers at a price. The volume of sales could be on a small, medium, or even on a large scale. If you purchase an item from a retail store, you will notice a certain amount called Value Added Tax (VAT)…
What is VOARS? VOARS means Voluntary Offshore Assets Regularization Scheme. President Muhammadu Buhari issued the Executive Order 008 called Voluntary Offshore Assets Regularization Scheme (“VOARS” or “the Scheme”) on 8 October 2018. The Scheme allows Nigerian taxpayers to declare their offshore assets and pay the corresponding taxes within 12 months. As a form of tax…