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Nigeria generally has one of the simplest tax administration systems in the world. However, the principles required to navigate expatriate taxation can be complex.
The following parties play a role1 in expatriate employment and tax management in Nigeria:
* Nigerian companies.
* Tax authorities-relying on relevant legislation.
* Expatriate employees.
* Immigration authorities.
* Foreign companies.
* Central Bank of Nigeria (CBN)/foreign exchange market.
Nigerian companies that seek or require certain unique skills or expertise of expatriates may apply to the Federal Ministry of Interior, through the Nigerian Immigration Service, and must demonstrate that these skills are not available locally. These companies are the designated collection agents for tax purposes.
Expatriate employment and the its associated costs form part of a Nigerian company's deductible operating expenses. The company is responsible for coordinating the filing of returns, as opposed to jurisdictions where expatriates have individual responsibility for filing their tax returns directly with the relevant tax authorities. Nigerian companies are, therefore, at the center of expatriate tax management.
Expatriate Tax Management- Statutory Provisions
Four principal laws are relevant to expatriate tax management in Nigeria:
Immigration Act.The Immigration Act2 provides the framework for the employment of expatriates and the basis of their entry into, stay in, and exit from Nigeria. The principal regulatory agencies responsible for immigration in Nigeria under the Act are the Nigerian Immigration Service (NIS) and the Federal Ministry of Interior (FMI). To ensure that Niger ian companies (whether or not they are subsidiaries of foreign companies) can access specialists' skills or expertise that are not available locally in the Nigerian market for their lines of businesses or operations, several categories of visas and work permits have been established:
* A "business" visa covers entry into Nigeria for purposes of business meetings, conferences, workshops, seminars, and other similar purposes. It does not entitle the holder to live or work in Nigeria.
* A "tourist" visa covers entry into Nigeria for purposes of tourism or to visit family members resident in Nigeria. It does not entitle the holder to work in Nigeria.
* A "temporary work permit" (TWP) covers entry into Nigeria to carry out short-term activities. It allows the holder to work and reside in Nigeria for a maximum of 90 days or...