The OECD Multilateral Instruments
On 17 August 2017, Nigeria became a signatory to the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) (‘Multilateral Instrument’ or ‘MLI’) and the Multilateral Competent Authority Agreement for the Common Reporting Standard (CRS MCAA).
Nigeria signed the MLI and also submitted its MLI position listing DTTs with 19 treaty partners for amendment. These include the agreements that are already in force and those that are not yet in force (e.g. DTTs with Korea, Mauritius, United Arab Emirates). Also, of the 19 agreements, 13 treaty partners (including Belgium, Canada, China, Netherlands, and the United Kingdom) have all listed their DTTs with Nigeria for amendment under the MLI. Nigeria and its treaty partners will need to subsequently agree on any parts of their proposals that do not match. Subsequent to this, each partner will then need to undertake the local domestication process to ensure that the changes become law.
The CRS MCAA
The CRS MCAA allows signatory countries to obtain financial information from financial institutions and automatically exchange the information with other jurisdictions that have signed up to the convention. Notably, the CRS MCAA will allow jurisdictions to exchange the following information:
- Name, address, and tax identification number of taxpayers.
- Taxpayer’s account number.
- Name of the reporting financial institution.
- The taxpayer’s account balance at the end of the reporting period.
Nigeria became the 94th jurisdiction to join the CRS MCAA. Some of the other signatories to the CRS MCAA include Bermuda, Cayman Islands, China, France, Germany, Mauritius, the Netherlands, Spain, Switzerland, and the United Kingdom.
Mutual Agreement Procedure
The Federal Inland Revenue Service (FIRS) has issued Guidelines on accessing Mutual Agreement Procedure in Nigeria. The Guidelines provide guidance to taxpayers on the process for accessing Mutual Agreement Procedure (MAP) as a means of dispute resolutions as contained in the various avoidance of Double Taxation Agreements between Nigeria and other countries.
All request for MAP are to be made in writing and addressed to:
Executive Chairman (Delegated Competent Authority), Federal Inland Revenue Service, 20 Sokode Crescent, Wuse Zone 5, Abuja, FCT. Nigeria and copied to: Director Tax Policy & Advisory Department (Authorised Competent Authority)
Requests for specific MAP cases involving transfer pricing are to be copied to: Director, International Tax Department, 3rd Floor, FIRS Building, 17B, Awolowo Road, Ikoyi, Lagos.