Advanced Taxation (Basic)

A Tax administration and taxation of business and investment income 40% 1 Tax administration (a) Introduction to tax administration Explain the Nigerian tax administration system with focus on: (i) Constitutional provisions regarding fiscal federalism; (ii) Structure and taxing rights of different levels of government; (iii) Role of the three arms of government; (iv) Functions of the various tax organs; and (v) Challenges of multiplicity of taxes and possible solutions. Apply advanced tax laws and principles to resolve real life tax scenarios Design and evaluate appropriate ethical safeguards to mitigate threats in a workplace Evaluate and apply the provisions relating to capital gains tax Apply the concept of tax planning and tax mitigation Understand tax dispute resolution mechanism Compute petroleum profits tax Liaise with tax officials, clients and other professionals in a suitable way REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 126 (b) Dispute resolution (i) Discuss the elements of a valid objection and appeal, covering: • Time limit for objection and appeal; • Content of a notice of objection and appeal; • Amendment of assessment and refusal to amend; and • Appeal procedures and process: Tax Appeal Tribunal, Federal High Court, etc. (ii) Draft a report on the procedure for the presentation of cases before a Tax Appeal Tribunal. (c) Domestic tax policy (i) Discuss key principles and cannons of tax policy formulation. (ii) Advise on the key provisions and application of the 2017 National Tax Policy in Nigeria. (iii) Explain the interaction of fiscal policy, monetary policy and trade policy. 2 Companies income tax (CIT) (a) Legal framework Explain the legal framework for the imposition of taxes on business and investment income. (b) Basis period Determine, in line with the Finance Act 2019, basis period and explain the rules on: (i) Commencement of business; (ii) Change of accounting date; and (iii) Cessation of business. (c) Computation of companies income tax (CIT) (d) Advise on income tax liability of companies based on the following, considering the changes introduced by the Finance Act, 2019: (i) Assessable profit and total profit; (ii) Minimum tax; (iii) Dividend distribution; and (iv) Gross Revenue/turnover. 3 Taxation of investment income (a) Discuss the taxation of the following investment income of Nigerian and nonNigerian companies: (i) Dividend; (ii) Interest; (iii) Royalty; and (iv) Rent. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 127 (b) Discuss the taxation of real estate investment companies’ income 4 Taxation incentives (a) Discuss the tax implications of the following pioneer legislations: Industrial D e v e l o p m e n t (Income Tax Relief) Act, 1971 (as amended); pioneer status incentive regulations released by Nigerian Investment Promotion Commission (NIPC) in 2014 and 2017; and application guidelines for pioneer status incentive issued by Federal Ministry of Trade and Industries on August 2017, on the: (i) Various pioneer industries and products on the pioneer list; (ii) Procedure for applying and obtaining pioneer status and how pioneer certificate can be amended; (iii) Provisions r e l a t i n g to retrospective operations and the date of production certification; (iv) Conditions relating to qualifying capital expenditure for pioneer industries; (v) Circumstances for the cancellation of pioneer certificates; (vi) Tax relief period and the conditions for extension of pioneer period; (vii) Tax incentives available to pioneer industries; (viii) Application of the commencement and cessation provisions to pre- and post-pioneer period, together with the treatment of losses and capital allowances of pioneer period; (ix) Various restrictions applicable to pioneer industries; (x) Appraise the tax incentives for gas utilisation as specified by the CITA and Finance Act 2019; and (xi) Appraise the tax incentives for manufacturing, agricultural and exports business. (b) Explain the tax implications of operations in the free trade zones. 5 Capital gains tax (CGT) (a) Discuss the concept, scope and administration of capital gains tax. (b) Compute chargeable gains and capital gains tax. (c) Discuss special situations under CGT, such as artificial or fictitious transactions, location of assets, determination of market value, anti-tax avoidance provision. (d) Planning and reliefs: (i) Explain the provisions relating to the replacement of business assets (rollover relief); and (ii) Explain the provisions relating to delayed remittances. (e) Outline and explain the offences and penalties. (f) Discuss restricted tax exemption on compensation for loss of office. (g) Discuss capital gains tax in relation to business combination amongst related parties. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 128 B International taxation 20% 1 Non-resident taxation (a) Explain the various forms of tax presence of a non-resident company doing business in Nigeria. (b) Evaluate the tax implications of non-resident companies doing business in Nigeria. 2 Taxation of the digital economy (a) Explain the concept of digital economy. (b) Evaluate the key challenges of taxing digital goods and services. (c) Discuss the existing legal/administrative framework for taxing digital transactions taking into consideration the provisions of the Finance Act, 2019. (d) Discuss the provisions of the Finance Act, 2019 on digital services and other services in relation to significant economic presence (SEP) of a foreign entity and the SEP order signed by the Minister of Finance. 3 Tax treaties (a) Define and explain the following: (i) Unilateral relief; (ii) Double taxation agreements; and (iii)Multilateral treaties. (b) Advise on the application of tax rules and reliefs available as follows: (i) Administrative process of obtaining a relief issued by the FIRS; (ii) Reliefs under the commonwealth tax relief; (iii)Impact of double tax treaty; (iv)Resolution of conflicts between double taxation agreements (DTAs) and Nigerian tax laws; and (v) Nigerian double tax agreements (DTAs) in respect of the following: • Permanent establishment; • Taxation of business profits and incomes from movable and immovable properties; • Taxation of investment incomes; and • Dispute resolution mechanisms. 4 Transfer pricing (a) Introduction to transfer pricing (i) Advise on transfer pricing (TP) by reference to the guidelines of Organisation for Economic Cooperation and Development (OECD), United Nations (UN) and Pacific Association of Tax Administrators (PATA). REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 129 (ii) Justify the application of transfer pricing regulations by multinationals and developing countries. (b) Nigerian transfer pricing regulations Evaluate and apply the provisions of the Nigerian Income Tax (Transfer Pricing) Regulations, 2012, and Income Tax (Transfer Pricing) Regulations, 2018, in respect of: (i) Objectives and scope of transfer pricing regulations; (ii) Commencement date; (iii) Connected taxable persons; (iv) Transfer pricing methods such as traditional transaction methods and transactional profit methods or any other method; (v) Advance pricing agreements (APA); (vi) Functional analysis in transfer pricing; (vii) The basic comparability factors in the process of transfer pricing benchmarking; (viii) The basic documentation requirements for transfer pricing benchmarking; and (ix) Offences and penalties as specified by the new regulations. 5 Actions against base erosion and profit shifting (BEPS) (a) Explain the 13 BEPS action plans of the OECD. (b) Advise on the provisions and application of the Income Tax (Country By Country Reporting) Regulations, 2018, issued by the Federal Inland Revenue Service. 6 Regional integration and trade blocs (a) Discuss the formation and fiscal policy objectives of the Economic Community of West African States (ECOWAS). (b) Explain the application of ECOWAS common external tariffs. (c) Discuss other regional trading blocs in Africa in comparison to the European Union (EU) and North American Free Trade Agreement (NAFTA). 7 Current issues and emerging trends: Explain the following: (a) Tax inspectors without borders; (b) Cooperative compliance; (c) Common reporting standards; (d) Foreign Account Tax Compliance Act; and (e) African Continental Free Trade Area Agreement (AfCFTA). 8 International tax policy (a) Evaluate the roles being played by inter-governmental and supranational organizations that shape tax policy. (b) Discuss the effectiveness of global cooperation and assistance on tax matters. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 130 (c) Evaluate the use of neutralities in international tax policy. C Tax management and planning 20% 1 Mergers and acquisitions (a) Advise on the bases periods for assessment relating to mergers and acquisitions. (b) Discuss tax considerations for mergers and acquisitions. (c) Advise entities involved in business re-organisation and restructuring, taking into consideration the specified tax concessions and conditions to be met before qualifying for such concessions. 2 Tax practice management (a) Explain the legal requirements for a professional accountant in practice. (b) Describe the process involved in client and engagement acceptance. (c) Advise on the risks and benefits of running a professional tax practice. (d) Discuss submission of objection letter via electronic and physical means. (e) Discuss the role of technology in running a contemporary tax practice. 3 Tax planning, avoidance and evasion (a) Advise management on tax planning activities and strategies. (b) Differentiate between tax avoidance and evasion. (c) Evaluate the tax implications of the following: (i) Thin capitalisation; (ii) Tax havens; (iii) Treaty shopping; and (iv) Non-tax factors. 4 Tax audit and tax investigation (a) Differentiate between tax audit and tax investigation. (b) Identify and advis e on the different types of tax audit. (c) Advise on the powers of tax authority to request for an audit. (d) Advise management on tax audit procedures, covering: (i) Pre-audit; (ii) Field audit; and (iii) Post-audit including various reports and correspondence. (e) Discuss the main causes of tax investigation and state the procedures involved. (f) Discuss the provisions backing the power to distrain for non-payment. ( g ) Advise on ethical issues – implications of confidentiality, conflict of interest and disclosure of information in tax practice. (h) Advise on interpretation of tax laws using decided cases. (i) Advise on the nature of communication w i t h clients, tax authorities and other stakeholders. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 131 5 Ethics and professionalism in tax management (a) Apply the five fundamental principles and guidance in International Ethics Standards Board for Accountants (IESBA) codes to recommend and justify appropriate legal actions where ethical dilemmas arise. (b) Advise on legal and ethical issues arising from tax work undertaken and explain the significance of these issues in the preparation of returns and in reporting. (c) Design and evaluate appropriate ethical safeguards to mitigate threats that could arise when professionals deal with employers, clients, government agencies and other stakeholders. (d) Explain the practical process to follow in addressing a tax violation under the NOCLAR framework as a: (i) Professional accountant in tax practice; and (ii) Tax professional in business. 6 Tax accounting and reporting (a) Discuss the treatment of income tax items in annual reports prepared in line with International Financial Reporting Standards. (b) Discuss the computation and accounting for deferred taxes in line with International Financial Reporting Standards (IFRS). (c) Advise on potential risks of wrong or misleading tax disclosures. D Taxation of incomes of extractive industries 20% 1 Oil and gas taxation (a) Discuss the general overview of the oil and gas industry in Nigeria. (b) Discuss the roles of regulatory agencies in the oil and gas industry such as the Nigerian National Petroleum Corporation (NNPC), National Petroleum Investment Management Services (NAPIMS), Department of Petroleum Services (DPR) and Federal Inland Revenue Service (FIRS). (c) Consider the effects of the provisions of The Petroleum Industry Governance (PIG) Bill. (d) Discuss the fiscal/operating arrangement/regimes in the upstream sector, with emphasis on: (i) Joint Venture (JV); (ii) Production sharing contract (PSC) taking into inconsideration the provisions of Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Act, 2019; (iii) Risk service arrangement; (iv) Oil and gas free trade zones; and (v) Marginal field operators. (e) Advise on what constitutes accounting period for tax purposes. (f) Ascertain the sources of income accruing to petroleum companies. REGULATIONS AND EXAMINATIONS SYLLABUS FOR ICAN 132 (g) Evaluate and advise management on adjusted profit, assessable profit, chargeable profit, and tax liabilities (including withholding tax on dividend) in accordance with the provisions of the Finance Act, 2019. (h) Advise on allowable and disallowable expenses and other deductions. (i) Discuss the treatment of losses in the computation of petroleum profits tax liabilities. (j) Identify and describe qualifying capital expenditure for capital allowance purposes and compute capital allowances claimable by petroleum companies. (k) Advise on petroleum profits tax (PPT) under Joint Ventures (JV), production sharing contracts (PSC), marginal field operators, etc. (l) Discuss tax payable based on the incentives available to companies u n d e r production sharing agreements with the Federal Government of Nigeria. (m) Describe the tax regime applicable to sole risk and marginal field operators. (n) Advise on the offences and penalties applicable to petroleum companies. (o) Discuss the requirements for registration and filing of returns for petroleum companies. (p) Advise on the scope and administration of the Nigeria Extractive Industries Transparency Initiative (NEITI) Act, 2007 2 Mining taxation (a) Advise on the scope and administration of the Nigerian Minerals and Mining Act, 2007 (as amended) and section 36 of the Companies Income Tax Act, in respect of: (i) Mining incentives; (ii) Minerals titles; (iii) Possession and purchase of minerals; (iv) Environmental considerations and rights of host communities; (v) Offences and penalties; (vi) Allowable and disallowable expenses; (vii) Rates of capital allowances; (viii) Computation of capital allowances; (ix) Total profits; and (x) Treatment of losses. (b) Advise on the scope and administration of the Nigeria Extractive Industries Transparency Initiative (NEITI) Act, 2007.