According to contracts (manufacturing processes, etc.) Act1 (TMPA), treaties are defined as instruments by which an international commitment is made between the Federation and any other country and includes “conventions”, “acts”, “general acts”, “protocols”, “agreements” and “Modi-vivendi”, whether bilateral or multilateral. Therefore, a treaty is a treaty between sovereign States that can be bilateral; when it is binding or multilateral between two States; in this case, it is binding on more than two States. The National Assembly has yet to ratify tax treaties with Kenya, Mauritius, Poland, South Korea, Spain and Sweden. Under a tax treaty, residents of a State party pay taxes on certain income at a lower rate. Foreign taxes payable by taxpayers from these 14 countries are allowed as a consideration of the tax payable in Nigeria. If the scope of the tax treaty does not cover a certain income or if a country does not have a tax treaty with Nigeria, a taxpayer must pay taxes at standard rates and file a Nigerian tax return in the prescribed format. Worldwide, domicile and source taxation are two principles that advance the taxation of corporate actors in international markets/economies. Therefore, an inevitable risk for multinational enterprises that have cross-border investments/transactions is double taxation. The search for new markets with the best margins clearly implies that multinationals will continue to invest in different economies outside their country or country of origin. This makes double taxation a clear and present risk for these companies. Nigeria has SDRs with Belgium, Canada, China, the Czech Republic, France, the Netherlands, Pakistan, the Philippines, Romania, the Slovak Republic, South Africa and the United Kingdom. In order to promote global economic development and reduce the impact of double taxation on businesses, the Organisation for Economic Co-operation and Development (OECD) and the United Nations have developed model conventions (type of double taxation conventions) on income and capital.

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