In our previous newsletter (Series I) on the Taxation of M&A transactions in Nigeria, we highlighted some of the significant changes to the taxation framework, including tax considerations for corporate restructuring transactions in Nigeria, as introduced in the recently enacted Finance Act 2020 (“Act”).

Further to the Act, various guidelines and orders have been issued by the Minister of Finance, Budget and National Planning (“Minister”) and the Federal Inland Revenue Service (“FIRS”), to supplement and provide clarifications necessary for the implementation and enforcement of the provisions of the Act.

Of importance to this discourse are the (I) Companies Income Tax (Significant Economic Presence) Order (“SEP Order”) issued by the Minister”) which defines the threshold for determining the significant economic presence of non-resident companies in Nigeria; (ii) the FIRS Information Circular no 2020/06 which provides clarification on business commencement and cessation rules and business reorganisations (“M&A Circular”); (iii) the FIRS Information Circular no 2020/02 which provides clarification on the implementation of the value added tax provisions in the Act (“VAT Circular”); and (iv) the FIRS Information Circular no 2020/05 which provides clarification on the provisions of the Stamp Duties Act (“Stamp Duty Circular”).

We have briefly discussed below some salient provisions of these circulars/order which impact on the taxation of corporate restructuring transactions in Nigeria.