A tax clearance certificate (TCC) is a document stating that an individual or a corporation has paid tax for a particular period of time. The certificate is an evidence that applicant paid for tax.
In Nigeria, the application can be said to be of two types based on the type of entities involved; Personal or individual Tax Clearance Certificate application is made to the State Inland Revenue Service; while Business or Company Tax Clearance Certificate application is directed to the Federal Inland Revenue Service (FIRS). Anyone who carries out a taxable transaction is eligible to register for Tax clearance certificate.
The Contents of a Tax Clearance Certificate are:
- Chargeable income (The amount that can be taxed because not all income received is taxable)
- Tax payable
- Tax paid
- Tax outstanding (or alternatively a statement to the effect that no tax is due) and;
- Taxpayer Identification Number (TIN)
What is a Taxpayer Identification Number?
The Taxpayer Identification Number (TIN) is a unique number allocated and issued to identify an entity (individual or Company) as a duly registered taxpayer in Nigeria. It is to be used by that entity alone. Tax Clearance Certificate is necessary for various corporate transactions by both individuals and corporate organizations in Nigeria.
How To Process A Tax Clearance?
The FIRS has recently migrated to a new online TCC application portal called TaxPromax. All taxpayers i.e. including those whose TCC applications are still being processed under the old platform are required to apply by submitting a taxpayer data update form which replaces the old paper and manually processed Tax Clearance Certificate (TCC).
The documents required for the application of Tax Clearance Certificate are outlined below;
- Application for Tax Clearance Form
- Taxpayer registration input form
- Completed FIRS questionnaire for new tax payers on the Company’s Letter Head addressed to the Tax Controller
- Copy of memorandum and articles of association
- Copy of the certificate of incorporation.
- Letter of appointment of tax adviser and a letter of acceptance Submission of Documents and Registration of VAT.
Upon acknowledgment of the completed taxpayer registration input form and all other required documents, a tax reference number will be given to the applicant, after which the applicant can file a request for the tax clearance certificate which will be available in due date.