Court of Appeal overturns Federal High Court ruling on recharges by non-resident companies
The Court of Appeal (“CA”) on 2 December 2014 delivered a judgment on the deductibility of recharges by non-resident companies filing income tax returns under the deemed profit regime in a case brought before it by the Federal Inland Revenue Service (“FIRS”) against Halliburton West Africa Limited (“HWAL”).
The CA overturned the decision of the Federal High Court (“FHC”) which had set aside the judgment of the Body of Appeal Commissioners (“BAC”) that decided the case in favour of the FIRS. The CA ruled in effect that where a non-resident company is assessed to tax on deemed profits basis, additional tax assessments can be raised by the FIRS on the discovery of new facts or previously undisclosed information
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