Nigeria: Tax deductibility of offshore production costs | KPMG | GLOBAL

Nigeria: Tax deductibility of offshore production costs

Nigeria: Tax deductibility of offshore production costs

The Tax Appeal Tribunal, Lagos, held that provisions under the Nigerian law specifically governing offshore production contracts, and relied upon by the Federal Inland Revenue Service to assert that certain costs were not tax-deductible, did not apply because those particular provisions relate to cost recoverability and oil allocations—and not to the tax deductibility of expenses.


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The tribunal also concluded that the costs were tax-deductible for petroleum profits tax purposes, to the extent that they were incurred wholly, exclusively, and necessarily for petroleum operations and were not specifically disallowed. 


Read a May 2016 report [PDF 84 KB] prepared by the KPMG member firm in Nigeria

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