Non-Profit Tax Compliance

Understanding Non-Profit Tax Compliance in Nigeria

While generally exempt from paying income tax on their core non-profit activities, NPOs in Nigeria are not entirely exempt from taxation. Key aspects to consider include:

• Tax Exemption Status: To enjoy tax benefits, NPOs must obtain the appropriate tax exemption status from the Federal Inland Revenue Service (FIRS). This involves meeting specific criteria and fulfilling certain obligations.
• Unrelated Business Income: Income generated from activities unrelated to the core mission of the NPO may be subject to income tax. Understanding what constitutes "unrelated business income" is crucial for compliance.
• Value Added Tax (VAT): NPOs may be required to register for VAT and charge VAT on certain goods and services, even if their core activities are tax-exempt.
• Payroll Taxes: NPOs with employees are responsible for deducting and remitting payroll taxes, such as Pay As You Earn (PAYE) and other statutory deductions.
• Annual Returns and Compliance: NPOs must file annual tax returns and comply with various reporting requirements, even if they have no tax payable.

How Stransact Can Help

Stransact offers a range of services tailored to the unique needs of non-profit organizations:

• Tax Exemption Guidance: We assist with obtaining and maintaining tax-exempt status, ensuring you meet all the necessary requirements and enjoy the associated benefits.
• Unrelated Business Income Tax (UBIT) Advisory: We help you identify and understand UBIT, ensuring proper accounting and tax compliance for any income generated from unrelated business activities.
• VAT Compliance: We guide you through VAT registration, compliance, and reporting requirements, ensuring you understand your obligations and avoid penalties.
• Payroll Tax Management: We handle payroll tax calculations, deductions, and remittances, ensuring accurate and timely compliance with all statutory requirements.
• Annual Returns and Reporting: We assist with preparing and filing accurate and timely annual tax returns and other necessary reports, ensuring compliance and transparency.
• Financial Reporting and Audit Support: We provide guidance on maintaining proper financial records and can assist with audit preparation, ensuring your organization meets regulatory requirements.
• Grant Management and Compliance: We can help you manage grants, including tracking funds, ensuring compliance with grant terms, and meeting reporting requirements.
• Capacity Building: We offer training and workshops to enhance your organization's understanding of tax laws and compliance requirements.

Benefits of Partnering with Stransact

• Specialized Expertise: Our team possesses in-depth knowledge of tax laws and regulations specific to non-profit organizations in Nigeria.
• Focus on Your Mission: By entrusting your tax compliance to Stransact, you can dedicate more time and resources to fulfilling your organization's mission.
• Reduced Risk: We ensure full compliance with all applicable tax laws, minimizing the risk of penalties, audits, and legal issues.
• Enhanced Credibility: Proper tax compliance strengthens your organization's credibility and transparency, building trust with donors and stakeholders.
• Cost-Effectiveness: Our efficient processes and expert advice can help you optimize your tax position and avoid unnecessary expenses.