SECTION PART I.- PRELIMINARY 1. Short title 2 ... - Lexadin

Method of
calculating
relief to be
allowed for
double taxation
57. (1) The provisions of this section shall have effect where, under
arrangements having effect under section 56 of this Act, foreign tax
payable in respect of any income in the territory with the. Government
of which the arrangements are made is to be allowed as a credit against
tax payable in respect of that income in Nigeria; and in this section the
expression "foreign tax" means any tax payable in that territory which,
under the arrangements, is to be so allowed, and "income" means that
part of the profits of any accounting period which is liable to both tax
and foreign tax, before the deduction of any tax, foreign tax, credit
therefor or relief granted under subsection (6) of this section.
(2) The amount of the credit admissible to any company under the
terms of any such arrangements shall be set off against the tax
chargeable upon that company in respect of the income, and where that
tax has been paid the amount of the credit may be repaid to that
company or carried forward against the tax chargeable upon that
company of any subsequent accounting period.
(3) The credit for an accounting period shall not exceed whichever is
the less of the following amounts, that is to say-
(a) the amount of the foreign tax payable on the income, or
(b) the amount of the difference between the tax chargeable
under this Act (before allowance of credit under any
arrangements having effect under section 56 of this Act) and the
tax which would be so chargeable if the income were excluded
in computing profits.
(4) Without prejudice to the provisions of subsection (3) of this section,
the total credit to be allowed to a company for any accounting period
for foreign tax under all arrangements having effect under section 56 of
this Act shall not exceed the total tax which would be ultimately borne
by that company, for that accounting period, if no such credit had been
allowed.
(5) Where the income includes a dividend and under the arrangements
foreign tax not chargeable directly or by deduction in respect of the
dividend is to be taken into account in considering if any, and if so
what, credit is to be given against tax in respect of the dividend, the
amount of the income shall be increased by the amount of the foreign
tax not so chargeable which falls to be taken into account in computing
the amount of the credit.
(6) Where the amount of the foreign tax attributable to the income
- 463 -