HOW TO OBTAIN TAX CLEARANCE CERTIFICATE IN NIGERIA
In Nigeria, it is the responsibility of Federal Inland Revenue Service or State Inland Revenue Services to issue tax clearance certificate to applicants. A tax clearance is a certificate stating that an individual or a corporation has no tax due for a particular period of time. The certificate is an evidence that applicant paid for tax.
Tax Clearance Certificate when issued to the taxpayers enable them to, inter alia, seek and obtain contracts and loans, renew permits, registrations, franchises, agreements and/or licenses that will invariably generate revenue from which taxes will be paid, management has taken steps to ease the process of obtaining TCC.
Tax Clearance Certificate Checklist
To get a TCC, you need:
- For Direct Assessment: Self-Assessment Tax Form, Proof of Service, Interview Sheet, Income Tax Working Sheet, Notice of Assessment, E-Payment Receipt, Bank Teller, Payment Receipts for relevant years, Application for TCC, Employees Annual Assessment File, Evidence of TIN Registration.
- For PAYE Scheme: Taxpayer’s application for TCC, tax returns for the last three years and the current year, proof of tax remittance, Certificate of Payment and Tax, Tax Identification Number, detailed taxpayer brief, and two passport photographs.
OLD PROCESS/PLATFORM FOR OBTAINING A TAX CLEARANCE CERTIFICATE IN NIGERIA:
Step1. The first step is to get in touch with FIRS and register your company.
Step 2. Hire a Consultant.
Step 3. Incorporate your Company.
Step 4. Provide Audited books of Accounts.
Step 5. Include an estimated computation Tax payable statement.
Step 6. Fill the Tax clearance forms.
Step 7. Submit the relevant Documents.
Step 8. Payment for the Certificate and be issued with the company Tax Clearance Certificate.
NEW PROCESS/PLATFORM FOR OBTAINING A TAX CLEARANCE CERTIFICATE IN NIGERIA:
The Federal Inland Revenue Service (FIRS) has recently migrated to a new online Tax Clearance Certificate (TCC) application portal.
All taxpayers i.e. both those whose TCC applications are under processing under the old platform and those making new TCC applications under the new platform, are required to reapply/apply by submitting a taxpayer data update form.
Application for company Tax Clearance Certificate – allow up to 10-15 working days for processing.
The tax is collected on behalf of the Government by businesses and organizations which have registered with the Federal Inland Revenue Services (FIRS) for VAT purposes.
Application for personal or individual Tax Clearance Certificate application is made to the State Inland Revenue Service, while Business or Company Tax Clearance Certificate application is made to the Federal Inland Revenue Service (FIRS).
The Electronic Tax Clearance Certificate (e-TCC) is now a new system of issuing tax clearance certificates in Lagos State. It replaces the old paper and manually processed Tax Clearance Certificate (TCC).
Application for Business or Company employees, registered under the Pay As You Earn (PAYE) scheme:
Process the application for your employees as a group, rather than personal or individual application to the State Inland Revenue Service.
Important Considerations
- Compliance: Ensure that all tax obligations are fulfilled to avoid delays in the issuance of the TCC.
- Legal Requirement: The TCC is often required for various business transactions, including bidding for contracts, obtaining loans, and renewing licenses.
- Consultation: If you are unsure about the process, consider hiring a tax consultant to assist with your application and ensure compliance with tax laws.
Conclusion;
Obtaining a Tax Clearance Certificate in Nigeria is a necessary process to confirm your tax compliance for a specific period. By following the outlined steps above, individuals and businesses can apply for their TCC from either FIRS or LIRS. Always ensure that all your tax obligations are fulfilled and that the required documents are accurately submitted to avoid delays in obtaining your certificate. Also, it is advisable to seek assistance from a tax professional as they are very much familiar with the tax-compliance terrain of Nigeria.
WRITTEN BY:
CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com / info@chamanlawfirm.com
TEL: 08065553671, 08024200080