Petroleum Profit Tax

NGN 15,000.0

10 days

Tax Returns

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Description

Information about the compliance service

The Petroleum Profit Tax is a tax levied by the Nigerian government specifically on companies involved in upstream petroleum operations, which include the exploration, production, and initial transportation/sale of crude oil and natural gas within the country. 

Things to note about the petroleum profit tax:
  • It is governed by the Petroleum Profit Tax Act (PPTA).
  • Applies to profits from upstream petroleum operations only, separate from other taxes like Companies Income Tax.
  • Tax rate is 85% for companies in joint ventures with NNPC, and 50% for production sharing contracts.
  • Companies can deduct allowable expenses like operating costs, capital allowances, and royalties when computing taxable profits.
  • Administered and enforced by the Federal Inland Revenue Service (FIRS).
  • Aims to ensure the Nigerian government receives a fair share of profits from exploiting the country's oil and gas resources.

Requirements

Info and documents needed for this service

  1. Tax Identification Number (TIN).
  2. Registration with the FIRS.
  3. Audited financial statement.
  4. Petroleum exploration and production records.
  5. Joint venture or production sharing contracts.
  6. VAT returns.
  7. WHT (withholding tax) certificates.
  8. Schedules and documents related to your company's income from upstream petroleum operations.
  9. Schedules and evidence for expenses claimed as deductions (e.g., operating costs, capital allowances, royalties paid).
  10. Any other relevant documents supporting the figures in your tax computation.
  11. Tax Clearance Certificates (If your company has filed PPT returns in previous years, you may need to provide tax clearance certificates from the FIRS for those years). 
  12. Certificate of incorporation and company's documents.
  13. Payment.

Process

Steps involved in this compliance service

  1. Provide all required documents.
  2. Complete the applicable tax form.
  3. Tracking of filed returns.

FAQs

Frequently asked questions about this service

1. What is PPT tax rate?
Tax rate is 85% for companies in joint ventures with NNPC, and 50% for production sharing contracts.
2. How do i resolve PPT disputes?
FIRS dispute resolution process.
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