The Tax Appeal Tribunal (TAT) has ruled in favour of the Federal Inland Revenue Service to levy withholding tax on dividends paid out of gas profits by upstream petroleum companies. Under the Petroleum Profit Tax (PPT) legislation, there is no withholding tax on dividends paid from profits taxed under the PPT law whereas dividends from profits which are taxable under the Companies Income Tax (CIT) legislation are subject to withholding tax. The PPT law permits an oil & gas company to pay tax on its gas profit at the CIT rate hence the question as to whether other provisions of the CIT law apply to an upstream company regarding its gas operations.
Read further details in our tax alert below:
Download Tax Tribunal rules for WHT on gas profit distribution