Statement of Taxation Standard (STS) 4: Previously Agreed Tax Return Filing Position
The CITN Statement of Taxation Standard (STS) Four on Previously Agreed Tax Return Filing Position sets out the applicable standards for members of the Institute in recommending a tax return position that departs from the position determined in an administrative proceeding or in a court decision with respect to the taxpayer’s prior return.
For the purposes of this guidance an “administrative proceeding” includes any ruling arising from the Tax Appeal Tribunal (TAT) or from examination by any tax authority of a tax return in the course of an enquiry, determination or assessment by the tax authority of a tax position in relation to a return or a claim for refund, tax offset or carry forward of tax credit. It also includes authority having jurisdiction over tax matters, and the Tax Appeal Tribunal.
Where an administrative proceeding or the court ruling has given a decision in the treatment of a specific item, in the prior year’s return, such treatment will usually be recommended by a member in the subsequent periods. However, a departure from the consistent treatment may be justified in the following circumstances:
CITN Statement of Taxation Standard (STS) Four was issued and gazetted in the Federal Republic of Nigeria Official Gazette Vol. 100 of June 2013. The standard became effective from 1st January 2013. The Standard is divided into five sections:
Parts 1, 2 and 3 present the standards, Part 4 requires compliance with any disclosure requirement of the Companies Income Tax Act CAP C21 of the Laws of the Federation of Nigeria 2004 as amended to date, the Personal Income Tax Act and any other relevant laws. Part 5 discloses the effective date of the Standard, which is 1 January 2013.
Guidance on STS Four
It is logical that where a tax authority has denied a tax payers’ position on a prior return(s), members of the Institute should desist from taking that same position on subsequent returns, pending when the leading circumstances that led to the administrative or court position has changed.
Members and stakeholders are invited to visit https://app.citn.org/home/tpgs to download the CITN Statement of Taxation Standards 1-9, and the Institute’s Professional Rules and Practice Guidelines.