1 June 2020
Businesses continue to explore corporate restructuring transactions as options for shoring up market share, boosting profitability and achieving other corporate objectives. In Nigeria, corporate restructuring transactions are undertaken under various structures ranging from mergers and acquisitions (“M&A”), share and asset sale transactions, demergers, and capital reorganisations, and these transactions attract different transaction taxes.
The focus of this paper is to highlight the taxes that would typically apply to corporate restructuring transactions in Nigeria, as well as key tax considerations to be borne in mind by parties, particularly inlight of the recently enacted Finance Act. The prevalent tax issues associated with corporate restructuring transactions revolve around the scope of the Nigerian tax laws and their applicability to the variants of transaction structures, the treatment of legacy tax obligations and the transfer of tax assets.