FIRS Thin Capitalization Disclosure Form

FIRS Thin Capitalization Disclosure Form for Nigerian Companies

Navigating thin capitalization rules under Nigerian tax law requires accurate reporting of related party debt arrangements and precise debt-to-equity ratio calculations. This FIRS Thin Capitalization Disclosure Form is designed specifically for Nigerian companies that need to comply with Federal Inland Revenue Service (FIRS) regulations regarding excessive interest deductions on related party loans.

Built for Nigerian Tax Compliance

Under the Companies Income Tax Act (CITA) and FIRS guidelines, Nigerian companies must monitor their debt-to-equity ratios when borrowing from related parties. When debt exceeds certain thresholds relative to equity, interest deductions may be limited to prevent profit shifting and base erosion. This form helps finance teams, tax advisors and company secretaries prepare accurate thin capitalization disclosures that meet FIRS requirements.

Automated Debt-to-Equity Calculations

The form includes built-in calculation fields that automatically compute your company's debt-to-equity ratio based on the financial information you provide. Simply enter your total related party debt, shareholder equity, and other key figures, and the form calculates whether your company exceeds the prescribed thin capitalization thresholds. This eliminates manual spreadsheet work and reduces the risk of calculation errors that could trigger FIRS queries.

Comprehensive Related Party Debt Reporting

Capture all the details FIRS requires: company identification (including TIN and CAC registration number), financial year information, details of each related party creditor, loan terms, interest rates, repayment schedules, and the business purpose of the debt. The form's conditional logic adapts based on your company's structure and the number of related party arrangements you need to disclose.

Streamlined Compliance Workflow

Once submitted, this form can feed directly into your tax compliance workflow. Use Stepper to route the completed disclosure to your external tax advisors for review, automatically generate supporting schedules, and maintain an audit trail of all thin capitalization filings. You can also integrate with your document management system to store completed disclosures alongside other FIRS submissions.

For companies that need director sign-off or tax advisor certification, add Papersign to collect legally binding eSignatures on the completed disclosure before filing with FIRS.

Who This Form Is For

This template is ideal for Nigerian companies, their finance teams, tax managers, company secretaries, and external tax advisors who need to prepare thin capitalization disclosures for FIRS. It's particularly valuable for subsidiaries of multinational groups, holding companies with intercompany loans, and any Nigerian entity with significant related party debt that may be subject to interest deduction limitations.

Paperform's calculation engine, conditional logic, and professional design make it easy to create a compliant, branded disclosure form that presents your company's information clearly and accurately—helping you meet FIRS deadlines and maintain good standing with Nigerian tax authorities.