The Lagos Division of the Nigerian Tax Appeal Tribunal (TAT) ruled against the Lagos State Internal Revenue Service (LIRS) on April 15, 2015, in an appealed case brought before it by Star Deep Water Petroleum Limited (the Company or SDWPL). The issues for determination were whether a failure to submit a written notice of objection to the relevant tax authorities within the 30 day period specified under the Personal Income Tax Act should result in an assessment being final and conclusive; and whether a Nigerian company that utilizes the services of the employees of an affiliate company, should be liable to deduct and remit Pay-as-You-Earn (PAYE) taxes on the remuneration of such employees. The TAT held that notwithstanding that SDWPL was unable to provide an acknowledged notice of objection to confirm that it had objected to the PAYE tax assessment, the assessment should not be deemed to be final and conclusive since it was not valid because it was made in respect of employees that were not under the employment of SDWPL. Given that the assessment was deemed to be invalid, the failure to object to the assessment within the 30 day period could not be deemed to be a final and conclusive assessment against SDWPL.

A Tax Alert prepared by Ernst & Young Nigeria, and attached below, provides additional details.

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ATTACHMENT

Full text of Tax Alert 2016-1088