\nThe purpose of the circular is to provide a general description of the application of the\u00a0Nigerian tax laws to non-residents and in particular the extent of their liability to Nigerian\u00a0taxes, as well as the payment procedure.<\/p>\n
2. Residence<\/strong> For income tax purposes, a person may be resident, non-resident or possess dual\u00a0residence.<\/p>\n 2.1 Resident Individual<\/strong> 2.1.1 Resident Individual and Liability to Tax<\/strong> 2.2 Resident Corporation<\/strong> <\/p>\n <\/p>\n 2.3 Non-Resident<\/strong> 2.3.1 Non-resident Individual<\/strong> 2.3.2 Non-Resident Corporation<\/strong> An individual or corporation may have dual or multiple residence status.<\/p>\n 2.3.4 Dual Residence of Individuals (Local)<\/strong> Where the determination of the principal place of residence leads to dispute between\u00a0two or more tax authorities, the Joint Tax Board determines the tax jurisdiction. In\u00a0practice, the determining factor is the source of earned income.<\/p>\n 2.3.5 Local Dual Residence of a Corporation<\/strong> 2.3.6 International Dual Residence<\/strong> A corporation may also have the problem of dual residence. For instance, the definition\u00a0of the residence of a corporation in Nigeria is the place of incorporation. In some other\u00a0countries, the relevant criterion may be the \u201cplace of management\u201d or the \u201cplace of <\/p>\n <\/p>\n 2.4 Branches and the Parent Company<\/strong> 2.5. Subsidiaries and the Parent Company<\/strong> 2.5.1. Article 4 of the Nigerian Model Double Taxation Agreement spells out the mode\u00a0of resolving the problem of dual residence between Nigeria and a treaty-country.<\/p>\n 2.5.2 The Agreement provides for the criterion of \u201dplace of incorporation\u201d as basis of\u00a0resolving dual residence of companies. Where this fails, the question is to be resolved\u00a0by \u201cmutual agreement\u201d.<\/p>\n 3. Treatment of Expenses<\/strong> 4.0 Profits or Income \u201cdeemed to be derived from Nigeria\u201d For corporations, the pertinent questions to ask in line with Section 13(2) of CITA CAP\u00a0C21, LFN 2004 (as amended) are: Each of these specific circumstances will be treated in turn.<\/p>\n 4.1 Fixed Base of Business The term \u201cfixed base\u201d implies that the place must be easily identifiable and must\u00a0possess some degree of permanence. It includes: However, two cases are specifically exempted and these include: <\/p>\n <\/p>\n 4.2 Operation of a Dependent Agent<\/strong> 4.3 The word \u201chabitually\u201d as used in the legislation implies that the operation of the\u00a0non-resident company must be repetitive. An isolated case will therefore not quality as\u00a0\u201chabitual\u201d<\/p>\n Where a dependent agent makes an isolated sale of goods on behalf of a principal, that\u00a0may not necessarily constitute the income from such an operation as deemed profit\u00a0liable to Nigerian tax. However, where the facts show that the sale of goods on behalf of 4.4 Profits on a Turnkey Project<\/strong> 4.5 Transactions not at arm\u2019s length<\/strong> The \u2018imposition of conditions\u2019 or control and influence as mentioned above can move in\u00a0various appearances like over-invoice of goods and services, packaging of the terms of\u00a0payment of interest on loans, frivolous charges for management fees, royalty, patent When the conditions analyzed above hold, the profit deemed to be derived from Nigeria\u00a0shall be as determined by the Service. In such circumstance, the Service will carry out\u00a0comparative cost and price analysis to establish the true market prices and make 4.6 \u201dSales\u2019 Outlet\u201d<\/strong> Example 1<\/strong> Treatment<\/strong> <\/p>\n <\/p>\n 4.7 Individuals<\/strong> 4.8 Double Taxation Agreement and The Permanent Establishment Concept<\/strong> 4.8.2 The term \u201cpermanent establishment\u201d has been defined in the OECD Model<\/strong> 4.8.3 As pointed out above the existence of a permanent establishment is essential for\u00a0the determination of liability to tax on business profit in Nigeria. Article 7 of the Nigerian\u00a0Model DTA has restricted the profit that may be so taxed to what is attributable to the 4.8.4 Article 15 of the Nigerian Model DTA makes the establishment of a fixed base in\u00a0Nigeria the condition for the liability to tax of the income of the professional services of\u00a0lawyers, architects, doctors, accountants, etc. The concept of \u201cfixed base\u201d is not defined 5.0 Turnover Basis of Assessment 5.2 The same tax treatment applies to both residents and non-resident when the\u00a0above conditions prevail. The implications of this treatment particularly to the nonresidents\u00a0are illustrated below: In practice, it is the industrial ratio or percentage which is compatible with the size and\u00a0the geographical area of operation that will guide the tax officers in exercising their\u00a0judgment. However, with effect from January, 1993, attempts have been made to 6.0 Building, Construction, Assembly and Installation Projections<\/strong> 6.1 A Nigerian Project Awarded to a Non-Resident Company but Subcontracted\u00a0in part to a branch, a subsidiary or an associated company 6.2 Split Contract<\/strong> 6.3 Project Awarded to a Nigeria Company but subcontracted to a Non-Resident\u00a0Company <\/p>\n <\/p>\n 7. Airlines and Shipping<\/strong> However, if sub-paragraph (i) above yields tax less than the 2% of gross sales at the\u00a0end of the year of assessment, the withholding tax of 2% becomes the final tax.<\/p>\n 7.1 The formula for ascertaining the profit element under (i) above is given in the tax\u00a0law and this is in two parts, one part ascertains what may be called \u201cadjusted profit\u00a0ratio\u201d of an accounting period before any allowance is made on account of depreciation\u00a0relief, and the second part ascertained ratio for the depreciation relief. In effect, 7.2 Treaty Situation<\/strong> 8. Remittance of Funds out of Nigeria<\/strong> 8. 1 Application forms for a Tax Clearance Certificate for the purpose of remittance are\u00a0obtainable free of charge from the relevant tax office.<\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n The payment of withholding tax is in the currency of transaction.<\/p>\n 10.0 Capital Gains Tax (CGT)<\/strong> 10.1 Gains arising from the Disposal of shares\u00a0Gains arising from the sale of shares held in Nigerian Company is not taxable in 10.2 Gains arising from Takeovers, Absorptions and Mergers\u00a0Where share in a company are acquired and such a company is taken over, absorbed\u00a0by, or merged to another company, the apparent gains from such organization will not\u00a0be subjected to tax provided:
\nThe concept of residence determines the extent to which the income of a taxpayer is\u00a0liable to tax under a tax jurisdiction. In Nigeria, a resident person (individual or\u00a0corporate) is assessable on the global income. This means that the taxpayer is liable to\u00a0tax on the income or profits \u201caccruing in, derived from, brought into, or received in\u00a0Nigeria.\u201d It also determines the scope of deductions that may be allowed for the\u00a0purpose of computing an individual\u2019s chargeable income. For instance, only residents\u00a0may claim children\u2019s allowance, dependents\u2019 allowance and life assurance allowance.<\/p>\n
\nAn individual is regarded as resident in Nigeria throughout an assessment year if he:
\n(i) is domiciled in Nigeria;
\n(ii) sojourns in Nigeria for a period or periods in all amounting to an aggregate\u00a0of 183 days or more in a 12 month period (inclusive of annual leave or\u00a0temporary period of absence); or
\n(iii) serves as a diplomat or diplomatic agent of Nigeria in a country other than\u00a0Nigeria.<\/p>\n
\n(i) The profit of a trade, profession or vocation is liable to tax in Nigeria\u00a0regardless of the period for which such a trade, profession or vocation has\u00a0been carried on.
\n(ii) Employment income is liable to tax on the basis of residence.<\/p>\n
\nA company is resident in Nigeria if it is incorporated in Nigeria.<\/p>\nGet a Debt Recovery \/ Collection Service in Nigeria<\/a><\/span><\/h2>\n
\nA non-resident corporation or individual is liable to tax only on the profit or income\u00a0deemed to be derived from Nigeria.<\/p>\n
\nA non-resident individual is a person who is not domiciled in Nigeria or who stays in\u00a0Nigeria for less than 183 days but derives income or profits from Nigeria. A nonresident\u00a0individual becomes liable to tax from the day he commences to carry on a\u00a0trade, business, vocation, or profession in Nigeria. However, he is liable to tax in\u00a0respect of employment income when he becomes resident.<\/p>\n
\nThis is a company or corporation that is not registered or incorporated in Nigeria but\u00a0which derives income or profits from Nigeria. It is to be mentioned here, for the sake\u00a0of emphasis, that exemption from incorporation does not confer exemption from\u00a0payment of tax on any company. Every company, resident and non-resident, is liable\u00a0to tax in Nigeria if its income is liable to tax under the provisions of the Companies\u00a0Incomes Tax Act. It is also to be pointed out that the Nigerian tax laws do not\u00a0exempt the income of a branch from tax.<\/p>\n
\nOrdinarily, a resident individual is subject to tax in Nigeria in the State where the\u00a0individual normally resides. In the case where such an individual has two or more\u00a0places of residence in Nigeria for income tax purposes, he is subject to tax in the\u00a0state where he has the \u201cprincipal place of residence.\u201d The term principal place\u00a0of residence.\u201d Means, for an individual with:
\n(i) Pension as the only source of earned income, his usual residence\u00a0constitutes the principal place of residence.
\n(ii) Source of earned income other than pension, the place nearest to his\u00a0usual place of work; and
\n(iii) Sources of unearned income, his usual residence.<\/p>\n
\nThe constitutional arrangement in Nigeria vests the taxation of all companies in the\u00a0Federal tax authority. This does not allow for the dual residence of corporations locally.\u00a0All corporations wherever located in Nigeria are under Federal tax jurisdiction.
\nTherefore, the problem of local dual residence of corporations does not arise.<\/p>\n
\nThe definition of the term \u201cresidence\u201d differs from one country to the other. For instance,\u00a0in Nigeria, the length of stay to qualify a taxpayer as a resident is reckoned within a 12-\u00a0month period. In some countries, this is reckoned within an assessment year, allowing
\nfor the qualifying period of stay to spilled over two years of assessment. In some other\u00a0countries (e.g. the USA), the citizen is regarded as resident in the home country\u00a0whatever the length of stay abroad. This creates the problem of dual residence for the
\nindividual who is regarded as resident in more than one country. For example, he is\u00a0regarded as resident at the same time in country A where nationality is the basis of\u00a0residence and in country B where he has stayed for more than 183 days in a 12-month
\nperiod and, may be, in his home country where he is away for the less than 183 days in\u00a0that assessment year.<\/p>\n
\nresidence of the directors.\u201d In this instance, the Nigerian tax authority would treat the\u00a0corporation as resident in Nigeria on the basis of the place of incorporation while the tax\u00a0authority of the other country would regard the same corporation as resident in that
\nother country on the basis of \u201cplace of management.\u201d The Nigerian tax treaties govern\u00a0the treatment of such cases and affected companies can claim tax credit for the\u00a0Nigerian tax in their home countries to avoid double taxation.<\/p>\nRead: How to process Tax Clearance Certificate<\/a><\/span><\/h2>\n
\nThe tax laws of some countries regard a branch as resident, for tax purposes, in the\u00a0same country as the parent company and therefore exempt the income of branches\u00a0from tax. There is no such provision in the Nigerian tax law. A Nigeria branch of a
\nforeign company is treated as a corporate entity under the law of the land and any\u00a0income or profit derived by it from Nigeria is taxable here. The only two conditions\u00a0where a branch may not be so treated are:
\n(i) if the branch is used solely for storage or display of goods or merchandise;\u00a0and
\n(ii) if the branch is used solely for the collection of information.<\/p>\n
\nA subsidiary is expected to be incorporated in Nigeria and therefore to operate as a\u00a0separate legal entity from the parent. The foreign equity-participation may now, in\u00a0certain circumstances, be 100% but such equity-ownership or the control will not affect\u00a0the residence status in Nigeria once the company incorporates. However, the claim to\u00a0the contrary by the other country may raise all the problems of dual residence.<\/p>\n
\nThe Nigerian tax laws do not discriminate between residents and non-residents in the\u00a0allowance of expenses for the purpose of determining the taxable income. All expenses\u00a0proved to be incurred for the production of the income are allowable as deductions.
\nRent, interest, royalties, management fees, head office expenses and similar expenses\u00a0are deductible if proved that they are \u201cwholly, exclusively, necessarily and\u00a0reasonably\u201d incurred for the purpose of the trade or business.<\/p>\n
\nUnder the old law, the liability to the Nigerian tax on the income from a trade or\u00a0business of a non-resident company or individual in Nigeria was restricted to that\u00a0portion of the income attributable to the operations performed in Nigeria. This definition\u00a0has been found to be inadequate in view of the growing complexities in the nature of\u00a0commercial operations in Nigeria. The government is in favor of encouraging foreign\u00a0investment and has therefore decided to state in clear and specific terms which\u00a0activities of a non-resident company and individual would attract Nigerian tax and to\u00a0what extent. Recent amendments to the laws have comprehensively defined what\u00a0constitutes deemed profit or income from a trade or business carried on in Nigeria.<\/p>\n
\n(i) does the Corporation have a \u201cfixed base\u201d in Nigeria?
\n(ii) does the Corporation operate in Nigeria through a\u00a0dependent agent authorized to conclude contracts or deliver goods or
\nmerchandise on its behalf?
\n(iii) is the corporation executing a turnkey project in Nigeria? or
\n(iv) is the operation between the corporation and its Nigerian subsidiary at\u00a0arm\u2019s length?<\/p>\n
\nIf a non-resident corporation has a \u201cfixed base\u201d from which it carries on its business or\u00a0trade in Nigeria, the profits from such activities would be deemed to be derived from\u00a0Nigeria.<\/p>\n
\n(i) facilities such as a factory, an office, a branch, a mine, gas or oil well etc;
\n(ii) activities such as building, construction, assembly, or installation; and
\n(iii) furnishing of services in connection with the activities mentioned above.<\/p>\n
\n(i) facilities used solely for storage or display of goods or merchandise;
\n(ii) facilities used solely for the collection of information.<\/p>\nRead: Company Registration Service<\/span><\/a><\/h2>\n
\nA non-resident corporation can have two types of agents in Nigeria \u2013 an independent\u00a0agent or a dependent agent. An agent is regarded as possessing independent status\u00a0when he acts on behalf of a non-resident corporation in the ordinary course of his
\nbusiness. The status may however change if he devotes his activities wholly or almost\u00a0wholly on behalf of the corporation.<\/p>\n
\nthe principal or of any company associated to it by the agent is on a regular pattern, this\u00a0arrangement will conform with the intention of the term \u201chabitually\u201d.<\/p>\n
\nA turnkey project is defined as a \u201dsingle contract involving survey, deliveries, installation\u00a0or construction.\u201d The profit on a turnkey project is liable to tax in Nigeria. Such a profit\u00a0should not be split between the so-called \u201cNigeria source\u201d and \u201coff-shore\u201d profits but
\ntaxed wholly in Nigeria.<\/p>\n
\nThe tax laws allows the Board to make appropriate adjustment to the profits of Nigerian\u00a0companies where the following circumstances prevail:
\n(i) where there is a controlling interest in the Nigerian company;
\n(ii) the presence of a control of a Nigerian company may be exercised directly\u00a0or indirectly by a parent company or any other company associated to it;
\n(iii) the imposition of conditions in the financial and commercial relationship by\u00a0the controlling interest;
\n(iv) the conditions imposed must be different from what would obtain between\u00a0independent parties or in an open market situation;
\n(v) such relationship and conditions lead to the transfer of goods and services\u00a0at prices not at arm\u2019s length; and
\n(vi) consequently, the profits declared for the Nigerian tax are understated.<\/p>\n
\nand rent, convenient shifting of profits between companies or in the allocation of\u00a0expenses, all with the objective of minimizing, avoiding or evading the Nigerian tax.<\/p>\n
\nnecessary adjustments to determine the true profit for tax purposes.<\/p>\n
\nThe tax law excludes:
\n(i) \u201cfacilities used solely for storage of goods or merchandise\u201d; and
\n(ii) \u201cfacilities used solely for the collection of information\u201d\u00a0from the facilities that would constitute a fixed base. The use of the word \u201csolely\u201d in the\u00a0law implies that facilities used exclusively as a representative office would be exempted.
\nWhere, however, a facility is so exempted but such a facility is used for some purposes\u00a0other than those originally intended, the facility will qualify as a \u201csales\u2019 outlet\u201d and\u00a0treated as a fixed base for the non-resident company. The profit arising from such a
\nsales outlet is taxable.<\/p>\n
\nSweet Home Inc has a representative branch in Nigeria for the display of its products. It\u00a0was later discovered that sales were regularly conducted from the stock held for the\u00a0display.<\/p>\n
\nWith the activity of the branch restricted solely to the display of the parent\u2019s\u00a0products in Nigeria, the branch will retain the status of a representative office and\u00a0will not be held liable to Nigerian tax. However, with the sales activity of the\u00a0branch, the status of the branch has changed to a sales outlet and this will turn it\u00a0into the parent\u2019s fixed base in Nigeria.<\/strong><\/p>\nGet A Lawyer or Law firm in Nigeria<\/a><\/h2>\n
\nThe amendment to the tax law has introduced conditions similar to those explained in\u00a0sub-paragraphs 4.1 to 4.6 above to individuals. In other words, the profits of an\u00a0individual carrying on a trade or business in Nigeria through a \u2018fixed base\u2019 shall be the\u00a0profit attributable to that fixed base. Therefore:
\n\uf0a7 if the business is through a dependent agent, the profit attributable to that agent;
\n\uf0a7 if the business involves a turnkey project, the profit from that contract; and
\n\uf0a7 if the business is between related persons, the profit that may be determined on\u00a0arm\u2019s length principle by the relevant tax authority.<\/p>\n
\n4.8.1 Article 5 of the Nigerian Model Double Taxation Agreement (DTA) spells out what\u00a0constitutes a permanent establishment (PE). The permanent establishment is the\u00a0condition for liability to Nigerian tax of business profits made from Nigeria. In other
\nwords, if a company has a permanent establishment in Nigeria, it is liable to Nigerian\u00a0tax on the profit from trade or business attributable to that P.E. in Nigeria but in the\u00a0absence of a permanent establishment, the company will not be held to Nigerian tax on
\nthe profits from the source.<\/p>\n
\nDouble Taxation Convention as \u201ca fixed place of business through which the\u00a0business of an enterprise is wholly or partly carried on\u201d It includes:
\n(i) the fixed base in paragraph 4.1 above;
\n(ii) the operations of the dependent agent in paragraph 4.2 above; and
\n(iii) the sales\u2019 outlet in paragraph 4.6 above.<\/p>\n
\npermanent establishment.<\/p>\n
\nhere, but is generally agreed to have the same meaning as the permanent\u00a0establishment.<\/p>\n
\nThis is an alternative to the normal basis of assessment to tax, based on the profit as\u00a0per the financial statement submitted as part of the taxpayer\u2019s annual returns. Under\u00a0this basis, the turnover, which is often apparent, is used to ascertain the assessable
\nprofit by applying a reasonable percentage on it.
\n5.1 The amendments to the tax laws have modified the mode of application of the\u00a0turnover tax to a trade or business carried on in whole or in part in Nigeria when the\u00a0following conditions exist:
\n(i) the trade\/business has produced no assessable profits; or
\n(ii) the assessable profits produced appear less than might be expected to\u00a0arise from such a trade or business; or
\n(iii) the true amount of the assessable profits of the company cannot be\u00a0readily ascertained.<\/p>\n
\n(i) for a non-resident company or individual with a fixed base in Nigeria, the\u00a0turnover that can be assessed and charged is only that portion that is\u00a0attributable to the fixed base. In other words, it will be wrong to base the\u00a0percentage considered \u201cfair and reasonable\u201d on the total turnover of such\u00a0a company or individual once a fixed base is established. This means that\u00a0the first step is to establish the fixed base. The second step is the\u00a0determination of the turnover attributable to the operations carried on\u00a0through the fixed base. The final step is to determine the percentage of\u00a0that turnover considered fair and reasonable.<\/p>\n
\nstandardize what is considered to be an acceptable ratio or percentage for certain lines\u00a0of trade. The prescribed standards are merely a guide which can be changed by\u00a0management, based on in-depth research, from time to time (see paragraph 5.3 for
\nmore details).<\/p>\n
\nIn view of the amendment to the laws, the following clarifications on the implications of\u00a0construction, assembly and installation projects in Nigeria become necessary.<\/p>\n
\nThis is usually a single contract involving survey, supply and construction or installation.\u00a0The whole profit on the contract will be taxable as a Nigerian profit with the subcontract\u00a0allowable as an expense but limited to the actual cost to the main\u00a0contractor.<\/p>\n
\nThis is where there are two distinct contracts of supply and construction or installation.
\nThe tax implication will depend on other facts of the case:
\n(i) if both contracts are awarded to the same company, the profit on the\u00a0supply aspect will be subject to Nigerian tax.
\n(ii) if the company is resident in a treaty country, the liability to tax on the\u00a0construction, assembly and\/or installation aspect will depend on the\u00a0existence of a permanent establishment in Nigeria for the performance of\u00a0the activities. The permanent establishment will be determined as follows:
\n(a) for construction and assembly or building, the existence of a site for\u00a0more than 3 months or 6 months depending on the DTA;
\n(b) for installation, the charge for the installation relative to the free-on\u00a0board sale\u2019s price of the machinery or equipment. If the\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0charge\u00a0exceeds 10 percent of the sales\u2019 price, the installation site could\u00a0constitute a permanent establishment in Nigeria.
\n(iii) if the non-resident company sub-contracts the activities in Nigeria\u00a0(building, assembly, construction or installation) to a resident company,\u00a0the tax implication will be the same as those illustrated under paragraphs\u00a05.2 and 5.3 above.<\/p>\n
\nIf the main contract is awarded to a Nigerian company which subcontracts the supplies\u00a0aspect to a non-resident company, the contract will be viewed as single contract as per\u00a0paragraph 3 above and the profit on it will be liable to tax in Nigeria but with the
\nexpenses of the subcontract allowed at cost of the main contractor.<\/p>\nGet a School Management Software for Primary & Secondary in Nigeria<\/a><\/span><\/h2>\n
\nA non-resident company that carries on the business of shipping and air transportation\u00a0into Nigeria is liable to tax in Nigeria on the full profits or loss arising from the\u00a0\u201ccarriage of passengers, mails, livestock or goods shipped, or loaded into an\u00a0aircraft in Nigeria\u201d. The basis of taxation is either:
\n(i) profit on the transportation business as reflected by the annual account;\u00a0or
\n(ii) withholding tax of 2% on Nigerian sales on monthly remittance basis.<\/p>\n
\n\uf0b7 The \u201cAdjusted profit ratio\u201d is the ratio that the adjusted profit\/loss before\u00a0depreciation allowances bears to the total sum receivable in respect of\u00a0carriage of passengers, mails and livestock.
\n\uf0b7 The \u201cdepreciation ratio\u201d is the ratio that the depreciation charged in the\u00a0accounts bears to that same total sum.<\/p>\n
\nNon-resident airlines and shipping companies are exempted from Nigeria tax on\u00a0reciprocal basis if a double taxation agreement exists between Nigeria and the country\u00a0of residence of the airline or shipping company. However, if a double taxation\u00a0agreement exists but the routes is plied by the airline or shipping company of only one\u00a0party to the agreement the tax chargeable is 1 percent of the sales less refunds and\u00a0payment of wages\/salaries of ground staff.<\/p>\n
\nAll non-residents remitting income or profits out of Nigeria are expected to obtain a Tax\u00a0Clearance Remittance Certificate covering the amount to be remitted. The certificate is\u00a0to show that relevant tax has been paid on the amount to be remitted or that the amount
\nis liable to Nigerian tax. It is an offence for any remittance to be made without the\u00a0Revenue clearance.<\/p>\n![\"Withholding](\"http:\/\/www.aziza.com.ng\/wp-content\/uploads\/2018\/09\/Withholding-tax-600x407.jpg\")
<\/p>\n
\nThe taxation of gains accruing from disposal of assets are administered under a\u00a0separate Act \u2013 the Capital Gains Tax Act. Such gains are not taxed as part of income\u00a0of the beneficiary but taxed separately at the rate of 10% of the net gains.<\/p>\n
\nNigeria.
\n*The withholding tax at the specified rates here is payment on account only. The\u00a0taxpayer is expected to file tax returns for normal assessment and credit will be\u00a0given for tax deducted at source.<\/p>\n
\n(i) there is no disposal of such shares by the original holders;
\n(ii) there are no cash payments for the shares involved;
\n(iii) the acquired company loses its identity.<\/p>\n