The Supreme Court has decisively ruled in favour of the Federal Board of Inland Revenue Service (FBIRS), dismissing an appeal by Halliburton West Africa Limited (HWAL) challenging an additional tax assessment of US$6.9 million.
In a landmark judgment delivered on Friday, a five-member panel of the apex court unanimously rejected HWAL’s claim of double taxation, affirming the original assessment covering tax years 1996 to 1999.
Justice Emmanuel Agim, delivering the lead judgment, emphasized that both HWAL and its Nigerian subsidiary are distinct taxable entities. The court found no evidence supporting HWAL’s assertion that its subsidiary had already been assessed on the same revenue.
The dispute originated in 2002 when FBIRS issued an additional tax assessment against HWAL, a non-resident company incorporated in the Cayman Islands. The assessment stemmed from contract transactions between HWAL and its Nigerian affiliate, Halliburton Energy Services Nigeria Limited (HESNL).
Under the contractual arrangement, HWAL would secure contracts for HESNL, with billings conducted in United States dollars. The FBIRS subsequently taxed the dollar-denominated income derived from these services.
After challenging the assessment through various legal channels, including the Body of Appeal Commissioners and the Federal High Court, HWAL’s final appeal to the Supreme Court was dismissed.
The court ordered HWAL to pay N2 million in costs to the respondent, effectively concluding the long-running tax dispute.
Significantly, the Supreme Court’s judgment reinforces the tax authority’s right to assess revenues from cross-border transactions involving multinational corporations operating in Nigeria.
Legal experts view the ruling as a critical precedent in Nigeria’s evolving tax jurisprudence, particularly concerning international business transactions.