Document Type
Article
Publication Date
12-2018
Keywords
Single contract, International corporate taxation, Nonresident company, Turnkey project.
Abstract
Nigeria's principal corporate tax legislation, the Companies Income Tax Act 1961, stipulates as a basis for the taxation of a nonresident company deriving income in Nigeria, what it terms a “single contract.” This, according to the statute, entails a contract that embodies the activities of surveys, deliveries, installations or construction (common features of what is in common parlance termed a “turnkey project”). A major challenge with the application of the provision lies in the comprehension of the pivotal term, “single contract.” A diversity of views on the import of the term paints a telling picture of ambiguity and underlies the complication of its applicability. A recent decision of the Nigerian Court of Appeal provided some much-needed judicial perspective on the point. The Court in the said case advanced a line of reasoning which almost certainly guarantees tax liability in Nigeria for a nonresident company participating in a Nigerian turnkey project regardless, it seems, of how the relevant contract is structured or performed – an apparent leaning towards an anti-avoidance objective of statutory interpretation. This paper, in search of clarity, examines the decision of the Court in Saipem Contracting Nig. Ltd & 2 Ors. v Federal Inland Revenue Service & 2 Ors in view of the language of the Act, case law and other perspectives both at home and abroad.
Recommended Citation
Okanga Ogbu Okanga, "The Single Contract Basis of International Corporate Taxation: A Review of Saipem v Firs" (2018) 9:4 Gravitas Rev Bus & Property L 33.
Publication Abbreviation
Gravitas Rev Bus & Property L
