The Finance Bill 2019 – A Summary of Key Changes
January 14, 2020
Tanitoluwa Oludipe
Tani Oludipe is a photographer with a background in law.…
0
Shares
The 2019 Finance Bill has recently been signed into law by President Buhari. Below are some of the important changes you should know about as collated by PWC.
- Excess dividend tax to apply only to untaxed distributions other than profits specifically exempted from tax and franked investment income
- Small businesses with turnover less than N25m to be exempted from Companies Income Tax
- A lower CIT rate of 20% to apply to medium-sized companies with turnover between N25m and N100m
- Commencement and cessation rules modified to eliminate overlaps and gaps to avoid double taxation and complication during commencement
- Minimum tax provisions amended to 0.5% of turnover and exemption only applies to small companies (less than 25m turnover), so non-resident companies will now pay minimum tax
- Insurance companies can now carry forward tax losses indefinitely, deduct reserve for unexpired risks on time apportionment bases while special minimum tax for insurance has been abolished
- Bonus of 2% of tax payable (medium-sized companies) and 1% for large companies for early payment of CIT
- Introduction of thin capitalisation of 30% of EBITDA for interest deductibility. Any excess deduction can be carried forward for 5 years
- Deemed tax presence for non-residents with respect to imported technical and management services now taxable at a final WHT rate of 10%
- Any expense incurred to earn exempt income now specifically disallowed as a deduction against other taxable income
- Dividend distributed from petroleum profits now to attract 10% withholding tax
- Banks to request for Tax Identification Number (TIN) before opening business bank accounts for individuals, while existing account holders must provide their TIN to continue operating their accounts
- Email correspondences to be recognised for communicating with tax authorities
- The meaning of supply and definition of goods and services has been expanded to cover intangible items other than land, among others
- Specific requirement for VAT deregistration for discontinuing operations
- Introduction of VAT reverse charge on imported services
- VAT registration threshold of N25 million turnover in a calendar year to be introduced
- Remittance of VAT now to be on cash basis, that is, difference between output VAT collected and input VAT paid in the preceding month
- Compensation for loss of employment below N10m to be exempted from CGT
- Stamp duty on bank transfer to apply only on amount from N10,000 and above. Transfers between the same owner’s accounts in the same bank also to be exempted
To read/download a copy of the 2019 Finance Bill, click here
Post Views: 412
What's Your Reaction?
Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0