This is an in-house training paper that reviews the highlights of the Income Tax (Country by Country Reporting) Regulations, 2018 released by the Federal Inland Revenue Service. Opinion expressed herein by the author does not necessarily in anyway represent the Opinion of OECD, ATAF or the Federal Inland Revenue Service (FIRS). The write up is strictly for information purpose, I therefore make no representation as to the accuracy and completeness of the information contained in this publication. I accept no liability for any loss that may arise from the use of this paper.

1. Income Tax (Country by
Country Reporting)
Regulations, 2018
The Highlights
Aboyeji, Oyekanmi M.

2. Introduction
Due to the increasing need for transparency in tax matters and appropriate risk
assessments of crossborder transactions, amongst other reasons, the OECD/G20 came up
with a BEPs strategies / action plans. Two of these action plans bothers of Aligning Transfer
Pricing Outcome with Value creation (Action 8-10); and Transfer Pricing Documentation
(Action 13).
The Transfer Pricing Documentation proposed a three-tiered TP Documentation Report
which covers Master File, Local File and Country-by-Country Report. As part of the minimum
standard for the implementation of action 13, countries (both OECD members and
adherent) are to sign-up to the CbCR Multilateral Competent Authority Agreement and
come up with Local legislations to enable the implementation of the Action 13 Minimum
Standards.
Consequently, Nigeria signed the CbC MCAA on 27th January 2016 & the FEC ratified it on 3rd
August 2016. Nigeria published the Income Tax (Country by Country Reporting) Regulations
2018

3. Commencement
Date
The effective commencement date of
Income Tax (Country by Country
Reporting) Regulations 2018 was 1st
January 2018

4. The Purpose of
Regulations
The Regulations gives effect to:
❖ Federal Inland Revenue Service Establishment Acts
(FIRSEA) 2007 as follows-
 S.8(1i) Exchange of information and
 S.8(1t) Such other activity necessary defining function of the
Service
 S.8(2)- Specification of forms of returns necessary for the due
administration of the power conferred on it by the act
 S.26- Calls for returns and documents/information from company
 S.27- Calls for returns and documents/information from third party
(Circularization)
❖ Companies Income Tax Acts (CITA) as follows-
 S.58 - Calls for further returns
 S.60 - Calls for returns, books, documents and information
❖ Petroleum Profit Tax Act (PPTA) as follows-
 S.31 and S.32
❖ Income Tax (Transfer Pricing) Reg. 2012 as follows-
 Reg. 6

5. The Objectives
of Regulations
1) Facilitate risk assessment
2) Provide information on global activities, profit
and taxes
3) Improve transparency of Multinational Entities
(MNEs)
4) Prevent tax evasion and avoidance through Base
Erosion Profit Shifting (BEPS)

6. Filing Obligation
& Timing of
Filing
❖ Filing of CBCR – (Reg. 3-5)
by Ultimate Parent Entity (UPE)
or
by a Designated Constituent Entity, where
i. UPE is not filing CBCR in its jurisdiction
ii. Systemic failure of the UPE’s jurisdiction and the Service
has notified the constituent entity
or
by a Surrogate Parent Entity (SPE)
 Timing of Filing
i. CBC Reporting:
- Not later than 12 months after the last day of the
reporting accounting year (Reg. 9)
ii. Notification stating:
a. Who shall file
b. Who is the UPE or SPE
- Not later than the last day of the reporting
accounting year (Reg. 6)

7. Contents of
CBCR
❖ Aggregate financial information (Reg. 7a):
 Revenue
 Profit or loss before income tax
 Income tax paid
 Income tax accrued
 Stated capital
 Accumulated earnings
 Number of employees
 Tangible assets other than cash and cash equivalents with
regards to each jurisdiction in which MNE Group operates
❖ Information about each constituent entity (Reg. 7b):
 Jurisdiction of tax residence of such constituent entity
 Where different from such jurisdiction of tax residence, the
jurisdiction under the laws of which such constituent entity is
organised
 The nature of main business activity or activities of such
constituent entity

8. Use of CBCR  Reg. 10(1):
i. Assessing high level Transfer Pricing risk and
BEPS risk in Nigeria
ii. Assessing risk of non-compliance with Transfer
Pricing rules
iii. Economic and statistical analysis
iv. Not to be used for Transfer Pricing Adjustment
❖ Reg. 10(2):
Assessing high level Transfer Pricing risk and BEPS risk
in Nigeria

9. Penalties ❖ Late Filing of CBCR- (Reg. 11):
₦10Million in the first instance and ₦1Million for every
month in which default continues.
❖ Incorrect or False Filing- (Reg. 12):
₦10Million
❖ Failure to Provide Notification- (Reg. 13):
₦5Million in the first instance and ₦10,000 for every day
in which default continues

10. Excluded MNEs
Group
MNES GROUP EXCLUDED FROM FILING CBCR- REG.
16(III):
MNEs Group with consolidated revenue not up to
₦160Billion for the accounting year immediately
preceding the reporting the reporting accounting year
reflected in its consolidated financial statement for such
preceding accounting year.

11. Questions &
Contributions