A tax clearance is a certificate stating that a corporation has no tax due for a particular period of time. The certificate is an indication that applicant tax affairs with the government’s agency, responsible for tax management, is in order.
The certificate may be issued for all taxes or for a tax or taxes specified by the business. In Nigeria, it is the responsibility of Federal Inland Revenue Service or State Inland Revenue Services to issue this certificate to applicants.
It is important to note, that FIRS has automated the process of getting Tax Clearance Certificate (E-TCC), however, the bureaucracy and internal challenges faced by this agency hinders the success of this automation, hence, manual processing of Tax Clearance persist.
While we awaits the perfection of this E processing, the below steps are currently required to process your Tax Clearance:
Step One: Register To Obtain Tax Identification Number
The tax payer must present the following document to the nearest Integrated Tax Office to its office:
1. A Certificate of Incorporation issued by Corporate Affairs Commission
2. Necessary documents showing the correct Business address e.g Form CAC 3, Notice of registered address,
3. Commencement date of business.
If satisfactory, a Tax Identification Number (TIN) will be issued to the taxpayer.
Step Two: Apply To Register For VAT
- Complete Application for VAT Registration Form(Form 001)
- Certificate of Incorporation, Memorandum of Association, CTC of Form CAC2 & CAC 7
Step Three: Apply for Tax Clearance Certificate
- Application for Tax Clearance form(In Triplicate)
- Taxpayer Registration Input Form (TRIF)
- Completed FIRS questionnaire for new tax payers on the Company’s Letter Head, addressed to the Tax Controller
- Copy of Memorandum and Articles of Association (MEMART)
- Copy of the certificate of incorporation
- Letter of appointment of tax adviser and a letter of acceptance
The application forms must be in triplicate and the original certificate of incorporation, must be presented for ‘sighting’ by the Controller or its Representative. Upon receipt of the completed Taxpayer Registration Input Form and all documents, a tax reference number will be allocated. After this, an application must be filed for the tax clearance certificate.
The fees for the tax clearance issuance are as follows: For newly registered companies within 6 months of incorporation, tax clearance certificate: no fee For companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of N25,000 is payable for the first time and N20,000 is payable for subsequent years until it files a notice of commencement of business.
Completion of the various forms for tax clearance application, require some knowledge which is highly advisable for organisations to seek tax advice, so as to ensure that , the right things are done.
For more information:
At SOW Professional Services, as a professional tax consultant in Nigeria, we understand how tax clearance certificate can be process, hence, we look forward to assist you with this process. Please call: Call us on 07038254989 or send a mail to: firstname.lastname@example.org, WhatsApp:07038254989, www.sowprofessional.com