Taxation Practice and Professional Standards
What the domain tests and why
Taxation practice and professional standards covers the member's judgement before, during and after a tax engagement: whether to accept the client, what terms are agreed, how a return position is supported, what workpapers evidence, and when to decline or withdraw. The TPC tests application to realistic Nigerian facts, not memorised rates. A defensible answer names the standard, applies it to the facts, and states the consequence.
Core rules and concepts
- Engagement acceptance: confirm competence, resources, client integrity and absence of conflicts. Put scope, responsibilities, fees, deadlines and limiting conditions in a written engagement letter. Update it when scope changes.
- Return positions: every position needs a reasonable basis in law and facts. Claim withholding tax credits only where certificates support them. Label estimates and assumptions. Do not sign a return you have not reviewed.
- Documentation: keep contemporaneous workpapers showing source documents, calculations, advice given and client decisions. Companies must keep accounting records for six years under CITA; retain tax workpapers longer where an assessment or appeal is live.
- Quality control: second review for complex or high-risk work; sign-off before e-filing.
- Planning vs evasion: planning uses reliefs and commercial arrangements; evasion uses false documents, hidden income or sham transactions. Advise on substance, not labels.
Worked example
A company's draft 2025 CIT return claims an ₦8m WHT credit, but the client can produce certificates for only ₦3m and says the rest "will arrive". The practitioner should claim ₦3m, request duplicate certificates from the deducting customers, and document the advice. Filing a supportable return and amending later is better than claiming an unsupported credit. Reason: self-assessment must be correct; an unsupported credit can trigger additional assessment, penalty and interest, and exposes the member to disciplinary action. The client's oral assurance is not evidence.
Traps
Treating a client email as substantiation; reconciling WHT credits to the ledger rather than to certificates; using rates from an earlier Finance Act; signing without checking the underlying accounts; backdating an engagement letter; failing to document oral advice; and continuing an engagement after the client refuses a correction.