Library / Implementation Guidelines for the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024.
Implementation Guidelines for the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024.
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7.0 Exemptions f ma The gas utilization investment allowance will not abply: wherecany of the follewing gecur: i. The company sells or transfers the plant and equipment to another company ‘that is not engaged in the same or related business within fiv ve yeats of incurring.the expenditure. ii. Within five years of incurring the. .expenditure, thete-is an appropriation of the: plant and equipment for purposes other than gas utilisation. j ~ / a i iii. | The cost incurred on the plant and equipment is not a bonafi dé business t Febsaction or is an artificial or fictitious transaction. Won iv. The company is an end - product user of gas as feedst6ck: energy 6 ane related purposes. mS 8.0 Disclosure Requirement A company that has claimed the GUIA on asset that is subsequently transferred or sold shall provide information on the sale, transfer or any other dealings with the asset to the FIRS within three months of the transaction. . The purchaser or transferee shall also have the duty to provide information as may be requested by the FIRS on the sale, transfer or any dealing with the asset. 9.0 Non- -Interférenge with Capital Allowance The value of any” ‘assét on which capital allowance is claimable by a company under the Companies Inéomé* ‘Fax:Act; shall not be reduced*by the gas utilization investment allowance available to be claimed by: a company. “? *o¢ The applicable capital ‘allowance under the Companies Income Tax Act shall continue to apply to the eligible Company without prejudicé to any-other allowable deductions, allowances and incentives available to the company under the -Companies Income Tax Act, and any other applicable legislation. 10.0 lilustrations Illustration 1 Ricardo Gas Investment Limited was licenced to engage in midstream Gas Utilization activities. The company incurred qualifying capital expenditure of US$10,000,000.00 (inclusive of US$6,000,000.00 for qualifying plant and equipment on gas utilization) on 1* April 2024. The Capital allowance claimable for the year is US$2,000,000.00 while the assessable profit for the year is US$5,000,000.00. Compute: (1) Gas Utilisation Investment Allowance (GUIA) claimable. (2) Companies Income Tax liability for 2025 year of assessment. Suggested Solution to illustration 1: Ricardo Gas Investment Limited (1) Computation of Gas Utilisation Investment Allowajice (GUIA) ha nN, e Total Qualifying Expenditure for the year " US$10,000,000 “Ee e Qualifying Expenditure on plant & Equipment US$6,000;000 e GUlA rate = 25% thet 5
RegulationsPDF20242024-046