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Nigeria Fiscal Guide 2020

Nigeria Fiscal Guide 2020

Introduction: Nigeria Fiscal Guide 2020

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Income Tax

Companies (other than those engaged in petroleum operations) are subject to companies’ income tax (CIT) on their taxable profits. There are three (3) CIT rates applicable to companies depending on their turnover. Companies resident in Nigeria are assessed to tax on their worldwide income, whilst non-resident companies are subject to tax only on profits accrued in or derived from Nigeria, to the extent that the profits are not attributable to operations outside Nigeria. Further, non-resident companies whose activities constitute a Significant Economic Presence (SEP) in Nigeria are subject to income tax on profit attributable to such activities in Nigeria.

Individuals are subject to tax under the Personal Income Tax Act (as amended). Resident individuals are subject to tax on all personal income, including income derived from outside Nigeria (except those specifically exempted from tax). Generally, the tax is collected by the government of the State in which the individual resides, except for certain categories of individuals whose taxes are payable to the Federal Government.

Non-resident individuals are liable to tax on Nigerian-sourced income. The income of a non-resident from an employment, profession, vocation or business in Nigeria is generally taxed in the same manner as that of a resident, irrespective of where the income is paid. However, investment income derived from Nigeria by a person resident outside the country is only liable to withholding tax.

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