Daily Tax Report: International

INSIGHT: Nigeria—Review of MAP Guidelines

Sept. 6, 2019, 7:00 AM

The Federal Inland Revenue Service (FIRS) has published guidelines on its mutual agreement procedure (MAP). This is regarded as another crucial step by the federal government of Nigeria in demonstrating its commitment to implementing the minimum standards of the Organization for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Project.

The MAP essentially allows designated representatives (i.e. the competent authorities) of two countries with a subsisting tax treaty to interact with a view to resolving tax disputes arising from the inconsistencies in the interpretation or application of a tax treaty or situation. This is especially applicable where the taxation of an individual or entity is unclear.

Prior to the issuance of the guidelines on February 21, 2019, there were limited directives on how Nigerian taxpayers could access the MAP. The conclusion of the BEPS Action 14 (Making Dispute Resolution Mechanisms More Effective) report and Nigeria’s membership of the BEPS Inclusive Framework has made it possible to adopt the MAP in Nigeria.

Key Features of the Nigeria MAP Guidelines

The main features of the guidelines are discussed below.


The guidelines specify that a Nigerian taxpayer is eligible to apply for MAP if it considers that the action of either or both Nigeria and its treaty partner’s tax authorities result or will result in taxation that is not in accordance with the provisions of the tax treaty, irrespective of the remedies provided by the Nigerian domestic tax law. The matters to which the MAP will apply include transfer pricing, dual residence status, withholding tax, permanent establishment and characterization/classification of income.

Time Limit

The time limit for presenting a case for the competent authority’s (CA) assistance depends on the specific terms as contained in the article of the tax treaty under which the MAP is invoked. For instance, the Nigeria–Canada double tax treaty (DTT) has a specified time limit of two years, while Nigeria’s DTTs with China, Netherlands, South Africa and France have a specified time limit of three years.

The three-year limit aligns with the time limit specified in the MAP guidelines. Therefore, in instances where the time limit for presenting a case to invoke the MAP is not specified in the relevant tax treaty, the case must be presented to the Nigerian CA within three years from the date of issuance of Notice of Assessment.

Initiation of MAP Process

A taxpayer seeking a MAP should first carry out a pre-filing consultation with the FIRS, through a formal meeting or written correspondence. The request is expected to be accompanied by relevant documents that support the facts of the case and justification for the MAP request. The authorized CA will review and determine if there is a basis for admission into the MAP process. In other instances, the CA may request the taxpayer to take remedial action to perfect a deficient MAP request.


The process may be terminated where adequate, accurate and/or complete information was not provided by the taxpayer as detailed in the guidelines. Similarly, a taxpayer may withdraw its request before a MAP agreement is reached. The withdrawal is expected to be made, in writing, to the FIRS’ Executive Chairman.


The issuance of the Nigeria MAP guidelines is a step in the right direction with the ultimate objective of aligning Nigeria’s tax system with international norms and best practices. It is expected that the process will be administered in a transparent manner, such that taxpayers can come forward and access the framework with a view to resolving treaty-related matters.

While it may be early to comment on the effect of the MAP guidelines, it is expected that the FIRS will put mechanisms in place to ensure annual peer review and issuance of an annual performance report. Hopefully, in due course when the Nigeria MAP process is reviewed, it will be said that the MAP had ensured timely, effective and efficient resolution of treaty-related disputes.

Funke Oladoke is an Associate Director, Victor Adegite is a Senior Manager and Barbara Mbaebie is a Senior Adviser with KPMG Advisory Services in Lagos, Nigeria.

The authors may be contacted at: funke.oladoke@ng.kpmg.com; victor.adegite@ng.kpmg.com; barbara.mbaebie@ng.kpmg.com

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners

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