Nigeria’s Tax Appeal Tribunal (TAT) delivers Landmark Judgment on the Deductibility of Demurrage Payments.

The Tax Appeal Tribunal sitting in Lagos on 28 February 2020, delivered judgement in the consolidated tax appeal filed by Tetra Pak West Africa Ltd (“Tetra Pak”/“The Appellant”) against the Federal Inland Revenue Service (“FIRS” / “The Respondent”) where it pronounced on the deductibility of demurrage in Companies Income Tax (“CIT”) computations. According to the TAT, demurrage payments incurred by the Appellant were wholly, exclusively, necessarily and reasonably incurred for its business operations. Having met the statutory threshold for tax deductibility, therefore, demurrage charges are deductible in the computation of the Appellant’s assessable profits.