A Partnership is an unincorporated business with multiple owners.
Partners in a partnership are not paid a salary as employees; they are owners and each partner receives money each year based on their share of the total ownership of the partnership. The individual partner share is determined by their partnership agreement. Where there is no partnership agreement, the partnership will be governed by the Partnership Act or Law applicable within the particular state.
Partnerships offer the tax and business advantages of low-cost set up, no double taxation of income and deductible insurance premiums.
The legal fees for starting a partnership tend to be lower too because of simplicity of these business structures. This allows a new business to open quickly and with lower start up costs over other business entities.
Partnerships are pass-through tax entities. All profits and losses from the business pass directly to the business owner or owners. As a result, you do not need to file a separate tax return for your business. You only need to report the business income on your own personal tax return. This avoids the time and costs of filing multiple tax returns.
Partnerships pass income directly to their owners without taxes being charged to the business. The owners must report the business income on their personal tax returns and pay income tax, but the business itself does not pay income tax. This avoids the double taxation that occurs in a business run as a Limited Liability Company.
To file your partnership’s federal income tax return you will need several documents:
A copy of your end-of-year Profit and Loss or Income Statement and Balance sheet for the partnership. This will detail all the income and expenses paid by the partnership during the year. It will also detail all the property you purchased during the year.
We will also need a list of all of the shares held by each partner and how the profits or losses are to be shared by the partners.
If you are part of a partnership, and you would like us to support or advice your organisation, please click the button below. We shall immediately contact you.
Services We provide to Partnerships
Taxpayer Registration Services
Every taxable person and business is legally required to register with the Internal Revenue Service and obtain a Tax Identification Number.
At UBR Tax, we support our clients with tax registration services, making the process smooth, convenient and cost-effective
Tax planning is not tax evasion, nor is it done with intent to defraud or evade tax liability. Proper tax planning involves deploying analysis and sound strategy to minimize tax liability through the use of all available allowances, deductions, exclusions, credits, and exemptions and reducing or deferring taxable income.
Based on numerous studies, many taxpayers were able to minimize their taxes through the application of useful tax planning methods.
Tax strategy includes timing income and planning purchases and other expenditures with the tax consequences in mind. By knowing your tax situation, you can choose when to apply tax strategies, credits, deductions, and possible rebates.
Tax Filing and Clearance Services
Filing your taxes is an important civic duty and a vital part of keeping the country running smoothly. If you are not careful with your taxes, you might face penalties and legal implications.
However, taxation is an entirely different world full of complexities, huge numbers, and legal battles.
Our tax experts help you prepare and file your monthly tax returns within the stipulated period. We keep your records up to date also help you procure your Tax clearance Certificate as and when due.
A small business is typically a Private Limited Liability Company with a staff strength of less than 50 Employees. A small business pays corporate taxes, and the owners of the company are considered to be employees if they work in the business (otherwise, they are considered shareholders).
A Limited Liability Company must first pay Companies Income Tax on its business earnings. This is a tax imposed on profit of a company from all sources. It is one of the main taxes administered and collected by the Federal Inland Revenue Service (FIRS). Companies Income tax in Nigeria is regulated by the Companies Income Tax Act (CITA), Cap. C21, LFN 2004 (as amended). The rate on this tax is 30% of a company of total profit less all expenses for the period which a company reasonably incurred in generating the taxable profit.
Afterwards, when profits are distributed to owners as dividends, they must pay Personal Income tax a second time on the distributed Dividends.
Apart from the above taxes, all Businesses are also expected to pay Value Added Tax on specified goods and services. The Federal Government of Nigeria recently increased the tax rate, from 5% to 7.5%. This is a consumption tax and it is mostly borne by the final consumer. However, the business is expected to charge and collect the tax on the consumer, and remit the collected amount to the Federal Inland Revenue Service.
Businesses are also expected to deduct and remit Withholding tax to the Federal Inland Revenue Service. This is an advance tax payment deduction made on any income or disbursement due to a taxable person or a taxable corporation, for onward remittance to the relevant government authority. WHT rate in Nigeria ranges from 2.5% to 10% for companies and 5 to 10% for individuals depending on the nature of the transaction.
Every company’s tax situation is different, and tax situations change over time as a company grows and becomes more profitable.
If you are part of a Small Business, and you would like us to support or advice your organisation, please click the button below. We shall immediately contact you.GET STARTED
The FIRS is statutorily empowered to administer and enforce the various tax laws in Nigeria at the federal level. The States’ Governments administer tax through the various State Boards of Internal Revenue, while the Local Government Revenue Committee of each State administers taxes at the local government areas.
There is also the Joint Tax Board (JTB) which is a creation of Personal Income Tax Act. It is made up of officers of the Federal and State tax authorities. It serves as a big umbrella covering all tax authorities in Nigeria. The official role of the JTB remains purely advisory.
At UBR Tax, we help you pinpoint deductible expenses you might otherwise miss, streamline the filing process and more easily identify your tax rate.
You can count on our tax experts for advice on tax compliance and tax advisory services.
Our services include:
- Tax Registration services
- Filing of Monthly and Annual Tax Returns
- Employment tax (PAYE)
- VAT/Indirect tax
- Tax Clearance Certificates
Our extensive experience provides us with excellent insights into the policies and procedures adopted by tax authorities. We offer a true added value service, working with your businesses to make sure you stay ahead in this ever-evolving environment.
If you would like to learn more about our services and offerings, please click the button below. One of our experts will contact you within 48 hours.Contact us