FIFA Forward donations received by the Nigerian Football Federation (NFF) are generally not taxable in Nigeria, provided they are used strictly for charitable or developmental purposes.
However it appears the case differs with the Nigeria Football Federation.
Under Nigerian tax law, non-profit organizations (NPOs) such as the NFF are exempt from Companies Income Tax (CIT) on income applied solely towards their charitable or non-profit objectives. This exemption covers donations, grants, and similar income, provided that:
• The income is used exclusively for the purposes for which the NPO was established.
• The NPO does not engage in activities of a commercial nature.
Therefore, FIFA Forward funds, which are grants aimed at football development, fall within this tax-exempt category when utilized appropriately.
⚠️ Conditions and Compliance Requirements
While the NFF benefits from tax exemptions, certain conditions must be met to maintain this status:
1. Exclusive Application of Funds: All income, including FIFA Forward donations, must be applied solely towards the NFF’s charitable objectives, such as football development and related activities.
2. Avoidance of Commercial Activities: If the NFF engages in commercial activities or derives income from investments, such income may be subject to taxation.
3. Filing Tax Returns: The NFF is required to file tax returns as and when due, ensuring compliance with applicable tax procedures.
4. Accurate Accounting Records: Maintaining accurate and detailed accounting records is essential to demonstrate that funds are used in line with the NFF’s charitable objectives.
🧾 Tax Deductibility for Donors
Companies making donations to non-profit entities listed in the Fifth Schedule to the Companies Income Tax Act (CITA) can enjoy tax relief, provided that:
• The donation is made out of the company’s profits for the relevant year of assessment.
• The total donation does not exceed 10% of the total profits of that company for the relevant year.
• The donation is not of a capital nature, except where it is made to universities or other tertiary or research institutions for developmental purposes.
This provision encourages corporate support for non-profit activities, including those undertaken by the NFF.
📌 Conclusion
In summary, FIFA Forward donations to the NFF are not taxable in Nigeria, provided they are used exclusively for the federation’s charitable objectives and not for commercial purposes. The NFF must ensure compliance with tax regulations, including proper application of funds, avoidance of commercial activities, timely filing of tax returns, and maintenance of accurate records.
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