Check Point Software Technologies was assessed administrative penalties by the tax authorities (FIRS) for failure to file a country-by-country report, and a complaint was filed with the Tax Appeal Tribunal by the company.
The Tax Appeal Tribunal held that the administrative penalties issued by the FIRS in enforcement of the CbCR Regulations were unconstitutional and void because the Board of the Federal Inland Revenue Service, which was legally empowered to make the regulations, did not exist between 2012 and 2020.
An appeal was then filed by the tax authorities with the Federal High Court.
Judgment
The Federal High Court dismissed the appeal and upheld the decision of the Tax Appeal Tribunal.
Excerpt
“I am thus left with no other conclusion than to hold that at the material time, there was no board of the FIRSEA in existence and in so far as regulations could only be made by the board with the approval of the minister, in the absence of a board there was nothing for the minister to approve and thus section 61 was not complied with in the making of the CBCR.
The CBCR was thus not validly made and cannot be relied upon by the appellant in the notices it issued to the respondent.”