Many business owners, often interchange the two. CAC annual return and Tax returns, are two different financial returns.
CAC annual returns is filed by a registered entity to Corporate Affairs Commission. While tax returns, is filed to Federal Inland Revenue and State Inland Revenue Services.
The CAC annual returns is a statement of Affairs returns. It is used to update status of entities from inactive(red button) to active(green button). It is now compulsory to file CAC annual returns before updating a post incorporation change.
That is, an entity which is due to file CAC annual returns, can not retrieve their lost CAC documents, change name, address, signature, the business officers particulars, increase share capital, without filing CAC annual returns. Where an entity is due to file and in default, all default years, must be duly paid for. So, if an entity was registered in December 2018 and It is a limited by shares company, it has to file for 2020, 2021, 2022 and 2023. For business name and incorporated trustee, it is yearly after year of registration. If the business name or incorporated trustee was registered on December 2017, It will file for 2019, 2020, 2021, 2022 and 2023.
Failure to ignore filing of CAC annual returns for years, can lead to striking out of your business from Corporate Affairs Commission and once your business is struck out, they will notify the public not to trade with struck out entities until they are relisted through court order.
For tax returns, the entity must have a tax identification number. Entities have certain percentage of returns. For instance VAT is 7.5 percent. New entities pay for assessments based on the transaction inflow in their corporate accounts.
Entities registered by CAC from August 2023 can assess tax promax. We have Company Income tax, Withholding tax, Value Added Tax, Capital gains, Personal Income tax.
Tax returns is not the same thing as CAC annual returns. If your tax returns is up to date, you can file for tax certificate.
Your tax returns can be attached for visa applications if you are using your business account and for prove of ties to your country as a self-employed person.
You can also apply for tax waivers, if you are a newly registered business.
Visit the nearest tax Federal and state office for your business tax id if you haven't gotten anyone.
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