Friday, January 04, 2019    04:42PM / ByLIRS

 

Appointmentof payers of Capital Sum inclusive of employers as collecting agents of payersfor the purpose of deducting and remitting Capital Gains Tax (CGT) due on therespective capital sums paid including but not limited to compensation for lossof employment

 

Overview

TheLagos State Internal Revenue Service (LIRS) is issuing this public notice toall employers, company owners, or their representatives, employees and othermembers of the public. Our public notice on “Exemption of compensation for lossof employment” has clearly articulated the requirements for all employers toalways segregate compensation to loss of employment into specific paycomponent. This is with the view of ensuring correct tax treatment for componentsthat are:

a.     TaxExempt

b.     Subject to PAYE and

c.      Subject to CGT

 

Legal Basis

Whilstsection 6 sub section 2(a) and section 11 of CGTA define capital sum as anymoney or money’s worth received as consideration which is not excluded underthe Act, section 6 sub section 1 (a-c) of Capital Gains Tax Act (CGTA) listsall types of capital sum and qualifying transactions on which CGT isapplicable. “Capital sum derived by way of compensation for any loss of officeor employment” is one of them.

 

 

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