Categorized | Nigeria, West Africa

Nigeria: PwC secures a favourable judgement on deemed income assessment August 2015

In brief In a recent decision, the Tax Appeal Tribunal (TAT) says a tax authority must act reasonably in the exercise of its discretion to assess a taxpayer based on deemed income (or best of judgment assessment). In the instant case, the TAT rules that a deemed income assessment cannot be based on general expectation or what was imposed on another company. The TAT also ruled that although the taxpayers being assessed are the employees, the employer can challenge the assessment to the extent that it alleges a breach of the employer’s statutory role as an agent of the tax authority. This decision provides clarity on the rules governing the imposition of deemed income assessment by tax authorities.

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