Tax Advisory & Tax Consulting Services
WHO WE ARE? Tax Advisory and Tax Consulting Service Providers
We are Tax Advisory and Tax Consulting Service Providers in Nigeria. Before any business in Nigeria is liable for tax payment, it must get all the necessary documents and ensure that the business owner registers and obtains the Tax Identification Number (TIN) from the State Board Internal Revenue in order to make the necessary payments of taxes such as the Personal Income Tax (PIT), Capital Gains Tax (CGT), Withholding Tax (WHT) and also the Value Added Tax (VAT). The Finance Bill 2020 mandates that before organization or an individual open a bank account (whether an existing account or a new account), the individual or organization must have gotten the Tax Identification Number (TIN).
Maximizing tax efficiency and simplicity is no easy task, but Business Cardinal corporate tax team can help you develop right approach for your business irrespective of its size, sector and business. We believe that a perfect adviser should have not only vast professional expertise, but also experience in business relationship. Our tax advisory team is composed of tax experts specializing in corporate income tax, personal income tax, withholding tax and VAT. Our advisers have in-depth knowledge of the Nigerian and international laws with extensive experience in handling all types of communication with tax authorities such as the state and that of the federal.
Our Tax Advisory & Tax Consulting Coverage
- PERSONAL INCOME TAX OR PAYE
Personal Income Tax (PIT) can be defined as a direct tax that is charged on the income of an individual or a sole proprietor. The Personal Income Tax Act (PITA) as amended in 2011 divided individuals into two groups which are the employees (PAYE) and the self-employed. The study deals with the latter which is the self-employment tax. The self-employment tax is a tax that is paid by either a sole proprietor or a partner based on the amount of profit earned.
Any small business that employs an individual to work under them is also liable to remit tax from its employees’ salaries. This is also known as the Pay as you earn (PAYE) and it is remitted to the relevant tax authority in a state. This also ranges from 7% to 24% depending on the taxable income
Both the Sole proprietor and Partnership business are not liable to pay income tax as an entity but rather they pay income tax on their share of profit after distribution of profit or loss has been made. They are responsible for filing their tax returns themselves and paying the relevant taxes when due according to the provisions of the Personal Income Tax Act (PITA).
A business owner in Nigeria is liable to pay tax in Nigeria for each year of assessment on the aggregate amount for every source of income. This will include profits made from the business, salaries, wages, fees, allowances or any other gains or profit gotten from employment including benefits, compensation.
- COMPANY INCOME TAX
All businesses whether small or large is liable to pay tax on the income generated. The payment of tax is dependent on the form of business and it is respective to their taxable income. Company income tax is only payable to the federal government annually. The finance bill 2020 which was signed in October exempts small business owners from payment of taxation with an annual turnover of less than N25 million from Company income tax. Although before the finance bill all businesses are liable to a taxable rate of 30% in the country
- VALUE ADDED TAX
This is also known as Value added tax (VAT). It is charged on goods and services and is collected by merchants in most states and paid to the state department revenue. One of the amendments made by the finance bill that was signed in October 2019 is the increase of the rate of value added tax (VAT) on goods and services from 5% to 7.5%
- CAPITAL GAINS TAX
This is 10% tax that is imposed on capital gains arising from sales, exchange or disposal of assets. Capital gains are the profit an investor or a business realizes when the capital asset is sold for a price that is higher than the purchase price. Capital gain taxes occur only when an asset is realized or sold.
- VALUE ADDED TAX (VAT)
Value Added Tax (VAT) can be defined as a type of indirect tax that is imposed on the supply of goods and services in a given state. VAT is governed by the Value Added Tax Act Cap V1, LFN 2004 as amended. It is mostly eventually borne by the final consumer of the goods and services. VAT in Nigeria was calculated at a flat rate of 5% before the Finance Bill 2020 that was signed in October 2019 by the President amended the rate to 7.5%. Section 7 of the VAT act grants the power of administration of VAT on the Federal Inland Revenue Service (FIRS) in Nigeria.
Every VAT collected by every business owner must be remitted to the Federal Inland Revenue Service (FIRS) on or before the 21st day of the month following the month the goods and services were sold. That is Value Added Tax (VAT) collected in March must be remitted before the 21st of the following month which is April.
- Input VAT
This type of VAT is paid on raw materials, goods are services that will be used for production purposes or goods for resale or goods imported directly for resale. When computing, Input VAT on overheads, services and general administration should be treated as an expenses in the profit and loss account while Input VAT on any capital item and item should be capitalized together with the cost of the item or the asset
- Output VAT
This type of VAT is charged on goods and services supplied and it is collected by a supplier from its distributors, agents, clients, consumers on goods and services supplied to them.
When Output Vat is greater than Input VAT, the tax payer is required to remit the excess to the Federal Inland Revenue Service (FIRS) but when the Input VAT is greater than the Output VAT then the tax payer is entitled to a return from the Tax board.
There are exempted goods and services that are not subject to VAT. They include
- Medical and Pharmaceutical products
- Basic Food items
- Sanitary pad (proposed by the Finance bill)
- Baby products
- Books and educational materials
- Fertilizer (locally manufactured), agricultural and veterinary medicine, farming machinery and farming transportation equipment
- Medical services
- Services rendered by community banks
- Plays and performance conducted by the educational institutions as part of learning
- Oil exports
- CAPITAL GAINS TAX
When a sole proprietor or partnership business sells an asset and make gain on the sale of the asset, the business must pay 10% of the chargeable gains made from the sale of the asset. The capital gains is the difference between the sales proceeds from the sale of an asset.
ASSETS CHRGEABLE UNDER CAPITAL GAINS TAX
- Options, debts, and incorporeal property
- Any currency other than the Nigerian currency
- Any form of property created by the person disposing of it, or otherwise coming to be owned without being acquired
- Assets situated outside Nigeria
EXPENDITURES ALLOWABLE FOR DEDUCTION FROM THE SALES CONSIDERATION
- Expenditure wholly, exclusively and necessarily incurred for the acquisition of the asset
- Incidental cost on the acquisition of the assets
- Expenditure wholly, exclusively and necessarily incurred in enhancing the values for the assets of the disposal
- Expenditure incurred on asset for the purpose of establishing, preserving or defending the title or right over an asset
- Incidental cost of making the disposal
GAINS NOT CHARGEABLE
Section 26 of the Capital Gains Tax Act in Nigeria exempt some capital gains from taxation. They are:
- Gains of ecclesiastical, charitable or educational institutions, statutory and diplomatic bodies are exempt from such taxation
- Where trustees or nominees transfer assets to beneficiaries they are not considered to be disposing the asset, hence the transaction does not attract Capital gain tax (CGT)
- Gains made upon a disposal of business assets where the proceeds are now spent in acquiring new business assets
- WITHHOLDING TAX (WHT)
Withholding tax (WHT) can be defined as an advance and indirect source of taxation deducted at source from the invoices of the tax payer. The main purpose of the withholding tax is to capture as tax payers might have evaded. Withholding tax rate are usually 10% or 15% depending on the type of transaction carried out. Withholding tax can also be said to be an advance payment of income tax. The WHT tax must be remitted to the relevant tax authorities on or before the 21st day of the month following the month in which the deductions were made.
When a business or an individual supplies goods or services to another company, there will be an evidence of payment which is known as an invoice in the course of the transaction. Take for example, the amount paid by the person who is purchasing the goods is N5, 000,000 and the relevant tax rate is 10%, then upon payment the person purchasing the goods will deduct N500,000 from the invoice of the supplier and then remit it to the relevant tax authority.
The person purchasing the goods is meant to acquire an evidence of remittance of tax payment in the form of a withholding tax credit on behalf of the supplier where he purchased the goods from. The supplier can then use the Withholding tax credit to reduce the income tax payable for the year.
WHAT WE DO?
Business Cardinal are committed to designing and formulating a service offering that covers all the needs of our clients. This allows us to establish a robust and specialized suite of tax advisory services.
Business Cardinal Tax Advisory can assist you with any tax issue big or small, from income taxes, transfer pricing, custom tax, corporate restructuring, acquisition, personal income tax, VAT, Capital Gains Tax, WHT and others
Our in-house team of tax experts combined with our wide network of senior tax advisors have the knowledge and experience to help you navigate and structure complex tax matters, including multi-jurisdictional issues. We take a relationship-driven approach and work closely with you to achieve tax efficiency within your business and transactions.
At Business Cardinal we are focused on our clients, our people and our communities to build awareness of taxation and to solve our clients most difficult tax issues. Our team takes an individualized approach to ensure you consistently receive the highest quality
At Business Cardinal, we advise clients on a wide range of tax business issues, which include the following:
- Review of corporate tax records to determine extent of compliance with enabling legislation and identify areas of potential exposure
- Rendering advisory opinions on VAT and WHT matters
- Provision of advice based on hands-on experience, on the tax implication of new legislation, transactions and services
- Advising and representing clients in tax audit and investigation cases
- Making representations to tax authorities for rulings and dispute resolutions
- Tax due diligence for merger and acquisitions
- Rendering advisory opinions on transfer pricing structures review
- Consulting on corporate tax issues
- Effective and tax-efficient strategies for optimal tax management
- Tax Diagnostic Review in cases of tax audits
- Support and guidance during tax audits
- Effective and tax-efficient planning for investments
- Evaluation and optimization of the final effective tax rate
- Advice and support in understanding and implementing government regulations
- Regular audits and management reviews
- Tax coordination of overseas activities
- Corporate income tax compliance
- Indirect tax compliance
- Tax consulting and support
- Continuous improvement of procedures, leveraging our continued investment in technology and data collection and processing
- Support during the client’s year-end tax audit and tax disputes with the tax authorities
- Instant access to current and reliable information
We provide, among other services:
- Calculation of property taxes
- Preparation of real estate tax returns
- Calculation of the objective value for valuation purposes
- Calculation of donation, inheritance and parental grant taxes
- Preparation and submission of related declarations to the National Cadaster
- Support during tax audits
- Consulting services in property conveyancing
- Consulting services in real estate planning
- Transfer pricing planning and compliance advice
- Advice and support in the preparation of transfer pricing documentation in accordance with Greek or foreign legislation
- Support in transfer pricing audits
- Benchmarking reports
WHY YOU SHOULD HIRE US?
- Business Cardinal relies upon the experience and expertise of its professionals to provide optimal solutions tailored to the needs of each client individually.
- Our tax advisory services are cost effective and you get value for the services you are paying for
- We have at our disposal qualified and experienced experts with various industry experience to aid in tax saving
- Identifying potential risks and opportunities through monthly and quarterly diagnostic reviews
- We provide information on relevant legislation as well as on developments in tax strategy
- We provide assistance in strategic planning with respect to taxes so as to manage their impact on the company’s financial results, risk portfolio and organization
- Support during tax audits or other tax proceedings
- Advising on strategy and planning aiming to reduce the risks and costs from taxes
- Advising on internal procedures and indirect tax-related risk management
- Assistance during discussions with the tax authorities and preparation of individual enquiries as per the Ministry’s/Legislative requirements
- We are one of the leading and efficient tax advisory firms in Nigeria
Meaningful tax savings aren’t achieved by just correctly filing at the local, state, federal, or international levels. They are realized through a knowledgeable, integrated approach that anticipates how each tax challenge influences the decisions you make to achieve corporate and personal growth.
When you partner with Business Cardinal, our tax advisors work alongside you at every stage of your personal or business lifecycle. With a breadth of services extending far beyond filing and compliance issues, our approach is focused on capturing value by strategically planning around your core financial objectives.
Tax always comes into play in almost every facet of the business. To avoid surprise losses related to tax, tax advice needs to be sought before you enter into business transactions. Hence, tax planning is best developed in advance. However, certain transactions may have been undertaken without proper tax planning or even without any tax planning at all.
In those situations, you will need to identify tax risks and find ways to mitigate them. We are ready to satisfy your needs. Choose Business Cardinal today
If you would love to engage us for this service, please call us on 08023200801 or request us to send you a proposal by email to firstname.lastname@example.org or complete our customer enquiry form for more details.