Tax implications of the operation of regulated securities lending transactions in Nigeria

The Finance Act 2019 amends a number of sections in the Companies Income Tax Act Cap C21 LFN 2004 (as amended) and the Stamp Duties Act Cap S8 (as amended) to provide for the taxation of operation of regulated securities lending transactions in Nigeria. In view of this, the Federal Inland Revenue Service has issued an Information Circular to provide clarifications on the application of Sections 9, 23, 24, 29, 78, 80, 81 and 105 of the Companies Income Tax Act (CITA) Cap. C21 LFN 2004, Schedule to the Stamp Duties Act (SDA) Cap. S8 LFN 2004 (as amended) and the provisions of the Personal Income Tax Act (PITA) Cap. P8 LFN 2004 (as amended). All these sections were amended by the Finance Act 2019.

The circular covers but not limited to the following:

  • Taxability of gross dividend and interest received by a Lender and Borrower
  • Franked Investment Income
  • Allowable deductions
  • Obligation of Withholding Tax deductions
  • Taxability of income earned by individuals under a SEC lending
  • Stamp duty exemption on certain SEC lending documents

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