What is a TIN?
The Taxpayer Identification Number (TIN) is a unique number that identifies a specific individual (or business) to pay taxes. As tax payment is mandatory for all individuals and businesses, everyone needs to have a unique TIN. However, this article will deal with TIN for businesses.
Who needs a TIN?
As mentioned above, since tax payment is compulsory, every business must have its unique TIN.
In July 2020, the CAC announcedthat upon successful registration of companies under Part A i.e, limited liability companies, a TIN would be automatically assigned to the company. However, the notification by the CAC does not cover other business organizations e.g, business names therefore, organizations like business names will still have to register with the FIRS directly.
What do you need it for?
Apart from registration for TIN being mandatory, there is a long list of other things which you need a TIN for:
- Opening a corporate bank account Section 28(1) of the Personal Income Tax Act which was amended by the Finance Act 2020, states that a person engaged in banking shall require that a person intending to open a bank account for the person’s business operations shall provide a tax identification number as a precondition for opening or continue operating of such bank account’.
- Government loans,
- Foreign exchange,
- Application for trade licenses, Import and export licenses
- Registration of motor vehicles,
- Application for certificate of occupancy. etc
A TIN is also necessary to get a tax clearance certificate for your business. You will need this as evidence that you are paying your taxes as due.
How do you apply?
To obtain a TIN for a business already incorporated at the Corporate Affairs Commission, you will need to go to the Federal Inland Revenue Service (FIRS) office that is closest to your registered address. You can find the locations on the FIRS website with the following documents:
- Memorandum & Articles of Association
- Certificate of Incorporation: CAC2, CAC7
- Company seal
- Utility bill
- Application letter on company letter-headed paper
- Duly completed TIN Application form
You should take the original copy and two(2) photocopies of each document. The originals are required for sighting only, one(1) copy will be left with the FIRS, and one(1) copy will be stamped and signed by a FIRS official as evidence that you have made an application.
If your business is a registered business name and not an incorporated company. To apply for a Tax identification number(TIN), you need to apply for VAT registration, the VAT number you are provided with will be your TIN registration number.
How much does it cost?
Applying for your TIN IS FREE if you do it yourself.
You do not have to pay any fees to obtain it, and you do not need to employ someone to apply on your behalf. However, most people decide to engage the services of 3rd parties to assist them in obtaining it.
How long does it take to get my TIN?
Ordinarily, the TIN should be given instantly or, at most, by the next day. However, it appears that a number of the FIRS offices are struggling with backlogs, so it is not uncommon for the process to drag on for about a week or in some instances two(2) weeks.
Remember, payment of tax is a civic duty. If you are doing business in Nigeria or intend to do business, you are expected to fulfill this necessary obligation, and the first step in this is obtaining your TIN.