Section 190

(1) The following rules shall apply in the event of restructuring of Business
trades or businesses – restructuring
(a) in the case of a merger of two or more trades or businesses –
(i) a new trade or business shall not be deemed to have commenced
as a result of the merger, and the provisions of this Act as they relate to
cessation of trade or business shall not apply to the trade or business that
ceased as a result of the merger,
(ii) the provisions of Part VIII of Chapter Two of this Act as they
relate to chargeable gains shall not apply to the assets transferred to the
new or surviving trade or business as a result of the merger,
(iii) assets of the merging trades or businesses shall be deemed to
have been transferred at the residue of the qualifying capital expenditure
on the day following the merger,
(iv) the provisions of the First Schedule to this Act shall apply on the First
remaining useful life of the asset transferred as a result of the merger, Schedule
(v) unutilised capital allowance on the assets transferred shall be
available for the use of the new or surviving trade or business,
(vi) unabsorbed losses of the merging entities shall be available to the
surviving trade or business provided that such losses were incurred by
the merged trade or business, and
(vii) taxes deducted at source in respect of the merged trades or
businesses shall be available to the merged trade or business;
(b) in the case of a sale or transfer of a trade or business which results
into the cessation of a trade or business –
(i) the provisions of Part V of Chapter Two of this Act as regards
cessation of trade, business, profession or vocation shall apply to the
trade or business that was sold or transferred,
(ii) for the purposes of the First Schedule to this Act, the asset sold or
First
transferred shall be recognised at the value at which they are sold or Schedule
transferred,
(iii) the provisions of Part VIII of Chapter two of this Act as they
relate to chargeable gains shall apply on any asset sold or transferred,
(iv) unutilised capital allowance on the assets sold or transferred shall
not be available for use in the new or surviving trade or business,
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(v) unabsorbed losses of the old business shall not be available for use
in the new or surviving trade, business, profession or vocation, and
(vi) taxes deducted at source from the old trade or business, shall not
be available for use by the new or surviving trade or business;
(c) in the case of a sale or transfer of a business asset which does not
result into the cessation of the trade or business, and where the parties
agreed to sell or transfer the asset for an amount not exceeding the sum of
the residue of the qualifying capital expenditure and unutilised capital
allowance of the asset –
First (i) capital allowance under the provisions of the First Schedule to this
Schedule Act shall apply to the residue of the asset only,
(ii) the unutilised capital allowance on the asset sold or transferred
shall be available for use by the buying trade or business,
(iii) the trade or business that sold or transferred the assets shall not
claim any part of the unutilised capital allowance pertaining to the asset
sold or transferred, and
(iv) the provisions of Part VIII of Chapter Two of this Act as regards
chargeable gains shall not apply to the asset sold or transferred under
this paragraph.
(2) Notwithstanding the provisions of subsection (1), in the case of
companies engaged in upstream petroleum operations, where business
restructuring results in the formation of a new company and cessation of the
old business, the accounting period of the company acquiring that trade or
business shall commence on –
(a) the date on which the sale or transfer of the trade or business to the
new company takes place; or
(b) such date within the calendar month in which the sale or transfer
takes place, as may be elected by the company with the approval of the
Service, and end on 31 December of the same year, provided that any gap
between the old and surviving business shall be treated as being part of the
new or surviving company.
(3) The period referred to in subsection (2), shall constitute "Accounting
Period" under Chapter Three of this Act.
(4) The relevant tax authority shall be notified of any restructuring of a
trade, business, profession or vocation prior to commencing such arrangement.
(5) Reference to a trade or business in this section include references to
any part of the trade or business.
(6) VAT charged under Chapter Six of this Act shall not apply to business
restructuring carried out in accordance with this Act.
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(7) Where a business or a part of the business, which is capable of
separate operation is transferred as a going concern and the purchaser uses
the assets in the same kind of business, such transfer shall not be treated as a
supply of goods or services for the purposes of VAT, provided that the pur-
chaser is registered in accordance with Part II of the Nigeria Tax Administra-
tion Act, 2025 , or registerable as a result of the transfer.