Abuja Tax Appeal sitting Tribunal on Tuesday adjourned till June 3 the hearing of N127 billion taxation charge served on a Swiss company, Trafigura Beheer BV.
The tribunal Chairman, Mr Nnamdi Ibegbu (SAN), ordered that all processes be filed and served by both parties before the next adjourned date.
At the resumed hearing, the appellant’s Counsel, Mr Daniel Ohabuike, urged the tribunal to grant him extension of time to appeal against refusal to pay served on it by the FIRS.
Ohabuike also told the tribunal that this would enable him file other processes and properly serve them too.
The respondent’s Counsel, Mr Olakunle Yusuf, did not oppose the motion.
Trafigura Beheer BV, an oil company, is engaged in oil business transactions with Pipelines and Products Marketing Company (PPMC) limited of Nigeria.
The company had filed an appeal at the tribunal challenging the FIRS for the alleged N127 billion tax liabilities.
It questioned the “demand for payment of outstanding tax liabilities dated Feb. 24, 2014 served on it by the FIRS covering years 2010 to 2014 and amounting to 642,536,470 U.S. dollars (N127,864,757,530.)
The company had alleged that it was not based in Nigeria and therefore should not be liable to pay tax.
“The crude Oil Refined Products Exchange Agreement between the company and PPMC is for the exchange of crude oil Free-On-Board delivered and cleared for export at designated Nigerian port.
“The agreement is also for refined product delivered by the company with transfer of title passed upon delivery to or from the vessels,” the company alleged.
It also alleged that this was not a permanent structure that would constitute a fixed base of business in Nigeria under the Companies Income Tax Act (CITA).
The appellant alleged that FIRS misapplied the Company Income Tax Act (CITA) when it found that the appellant cleared for exports from Nigeria.
“The appellant does not qualify under Nigerian law to file tax returns as it is not a Nigerian company and does not have a fixed base of business in Nigeria.
“Under Nigerian laws, the appellant is not a company to which a deemed income approach can be applied.
“The company did not derive any profit in Nigeria that would result in an obligation to file corresponding tax returns,” the appellant claimed.
However, the Federal Inland Revenue Service stated that “the company is engaged in oil business transactions with PPMC on regular basis and therefore liable to tax in Nigeria.
“The company is yet to file tax returns with the FIRS. Since the company’s financial statements were not available, deemed income approach has been used to arrive at tax liabilities of the company.
“Deemed tax rate of 6 per cent applies on the value of crude products.’’