After the Corporate Affairs Commission (CAC) issues a certificate of incorporation or registration certificate to a business, what next? This question is one of the pressing issues for new business owners in Nigeria. Depending on the type of industry, a new corporation may register with two or more regulatory agencies. As paying taxes is a civic duty, a taxable person must also register for taxes in Nigeria. The two regulatory bodies responsible for taxes in Nigeria are the Federal Inland Revenue Service (FIRS) as well as the relevant State Internal Revenue Service (IRS). Registration with FIRS will not relinquish an organization from the tax obligations with the State IRS. A taxable person, therefore, needs to register separately with both bodies. It means that a new business will register for tax with FIRS and the State tax authority.
How to register for tax with FIRS
Steps for registering as a new taxpayer with the FIRS:
- Check the status of taxpayer identification number (TIN): CAC may issue a TIN to a registered company, enterprise, or not-for-profit organization at the point of incorporation or business registration. In such cases, the certificate of incorporation will contain the TIN.
- Entities with an incorporation date after 1st September 2023 can complete the registration online on FIRS TaxPro Max using the self-registration module.
- Entities with an incorporation date before 1st September 2023 should visit the nearest FIRS tax office to complete the registration process. To know the relevant tax office, check our article on filing returns with FIRS based on segment.
Documents required for manual tax registration with FIRS - Company
- A copy of the following documents.
– Memorandum and Articles of Association
– Certificate of Incorporation
– Form CAC 1.1 (Status report). Formerly, Form CAC 7 containing the particulars of the Company’s Directors and CAC 2 detailing the Company’s statement of share capital and return of allotment.
Note: For companies registered before the introduction of online certificate, FIRS will have a look at the original copy. - Duly completed and stamped VAT registration form 001
- Duly completed and stamped FIRS Taxpayers Registration Input Form for companies – Copies of the VAT Form 001 and FIRS Taxpayers Registration Input Form for companies are available at FIRS office.
- Utility bill
- Official application for VAT registration
- Official application for CIT registration including the response to FIRS questionnaire.
- Taxpayers update form
Documents required when the taxpayer is an individual or a sole-proprietor
- A copy of the following;
– Business Name Registration Certificate
– Form 1.1. Formerly, Form CAC 7 containing the particulars of the Directors.
Note: For businesses registered before the introduction of online certificate, FIRS will have a look at the original copy.
2. Duly completed VAT registration form 001
3. Utility bill
4. Approved means of identification
5. An official letter of application to register for VAT with FIRS
When should a taxable person register for tax?
A taxable person should register for VAT upon the commencement of business in Nigeria. A taxable person will commence operations on the date it carries out its first transaction in Nigeria at the earliest of when it –
(i) begins to market or first advertise its products or services for sale or
(ii) obtains an operating license from a regulatory authority in Nigeria or
(iii) makes its first sale or purchase or
(iv) performs its first trading contract after incorporation with the CAC or
(v) sends or collects its first invoice or
(vi) delivers or receives its first set of goods or
(vii) first renders services to its customers.
Reference: Section 46 of the Finance Act 2019
Next steps
Congratulations on completing the registration process. The business is ready to prepare and file monthly and annual tax returns with FIRS. Tax registration is the starting point in the tax compliance cycle.
Complying with multiple tax laws on a company’s operations is the second step. The next phase is a crucial one as it involves strict fines for non-compliance. Businesses should put structure in place to manage their tax affairs to minimize their tax exposure.