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How To File Annual Returns With FIRS

How to File Annual Returns with FIRS

How to File Annual Returns with FIRS

All Nigerian companies are expected to file tax returns annually with the Federal Inland Revenue Service (FIRS) or State Inland Revenue Services. This includes various taxes such as Company Income Tax (CIT), Value Added Tax (VAT), Withholding Tax (WHT), and Pay As You Earn (PAYE) for employees. If your business is in Nigeria, the regulating body is the Federal Inland Revenue Service (FIRS), while state agencies like Lagos Inland Revenue Service (LIRS) also demand an annual tax returns filing from taxpayers who conduct business in their territory.

A tax return is a report prepared by a taxpayer containing information on his business affairs for a given period for the purpose of complying with the tax laws.

Two major types of taxes can be filed with FIRS

  1. Companies Income Tax Returns
  2. Personal Income Tax Returns

Key Requirements for FIRS Annual Tax Returns:

  • Tax Filing: Submit the annual Tax Returns, which include self-assessment for CIT, VAT, WHT, and other applicable taxes.
  • Tax Payment: Payment of taxes due based on the return filed.
  • Tax Clearance Certificate (TCC): Obtaining a Tax Clearance Certificate (TCC) to verify compliance.

Key Steps in Filing Tax Returns

Step 1: Gather Necessary Documents

Before you start the filing process, ensure that you have all the required documents and information. These may include:

  • Financial statements (Profit & Loss, Balance Sheet, Cash Flow Statement)
  • Tax Identification Number (TIN)
  • Certificates (e.g., tax clearance certificate)
  • Proof of tax payments for the previous year
  • Details of any tax credits or reliefs you are claiming
  • Corporate tax registration details (for companies)

2: Register on the FIRS eFiling Portal

  • Visit the official FIRS eFiling Portal: https://taxpromax.gov.ng
  • If you don’t already have an account, you need to create one by registering with your company details.
  • Ensure your company’s TIN and other registration details are up to date.

 3: Select the Appropriate Tax Type

  • FIRS handles various tax categories, including Corporate Income Tax (CIT), Value Added Tax (VAT), and Withholding Tax (WHT). Select the appropriate tax type for your annual return filing.
  • For most businesses, CIT and VAT are the primary tax types to file.

 4: Prepare and Complete the Filing Form

  • On the eFiling portal, choose the Annual Return Form based on your business’s tax category (e.g., CIT for companies, VAT for VAT-registered businesses).
  • Fill in the necessary details:
    • Income and expense figures
    • Taxable income
    • Tax payable
  • Ensure accuracy in your financial data to avoid penalties or errors in your return.

5: Calculate Your Tax Liability

  • Calculate the tax liability based on your company’s income, expenses, and any applicable tax credits.
  • The portal may have built-in tax calculators to help you determine the correct amount payable.

6: Submit the Return

  • Once you have completed the form and verified all the information, submit the return electronically via the eFiling portal.
  • FIRS will acknowledge receipt of the filing.

7: Pay the Tax Liability

  • After filing the return, you will receive a payment schedule. The FIRS eFiling portal will generate a payment reference for your tax liability.
  • Proceed to make payment via the designated bank channels or online payment platforms. Ensure the payment is made before the due date to avoid penalties and interest.
  • Keep the payment receipt or confirmation as proof of payment.

8: Obtain Acknowledgment and Confirmation

  • Once payment is made and processed, FIRS will issue an acknowledgment receipt confirming your tax compliance.
  • You may also be issued a Tax Clearance Certificate (TCC), which may be required for various business dealings (e.g., contract awards, loans).

9: Submit Any Supporting Documents (If Required)

  • FIRS may request additional supporting documents after reviewing your return.
  • Ensure all requested documents are submitted promptly to avoid any delays or penalties.

10: Retain Copies for Record Keeping

  • Retain copies of all documents, including the filed returns, payment receipts, and confirmation from FIRS, for your records.
  • The Nigerian tax authorities may conduct audits, so it’s essential to keep all documentation for at least 6 years.

It’s important to highlight that a significant portion of contract bids, whether in the public or private sector, generally necessitate the submission of an annually updated report as a crucial prerequisite. To meet this requirement, an entity must ensure that its records are consistently kept current and in line with the stipulated timelines.

Penalties for Late Filing

Missing the deadline for tax filing can cost a lot. If you file late, you’ll have to pay extra money. For every year you don’t pay, there’s a 10% interest added to your unpaid taxes. This means the amount you owe can grow really fast. It’s important to file on time to avoid these big costs.

Consequences of Non-Compliance

Not doing your taxes is a big problem. It’s not just about paying more money. It’s actually against the law. If a company keeps ignoring this rule, it can be removed from the official business list. This is really serious because it means the company can’t do business anymore. Also, the people in charge of the company, like directors, could be held responsible. They might have to pay for the company’s mistakes with their own money or even face legal trouble. That’s why it’s super important to follow the tax rules.

To know more about How to File Annual Returns with FIRS, kindly contact us at :

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