The profits of companies (other than upstream petroleum companies with Oil Prospecting Licences who are subject to additional hydrocarbon tax) are subject to companies’ income tax (CIT). Nigerian companies are assessed to tax on their worldwide income, whilst Non-Resident Companies (NRCs) 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. For NRCs whose activities constitute a Significant Economic Presence (SEP) in Nigeria, CIT is charged on only the portion of the profit attributable to such activities in Nigeria. Every company carrying on trade or business in the country or whose activity constitutes SEP is expected to prepare audited financial statements and file CIT returns within 6 months from the end of their financial year. However, withholding tax (WHT) will be the final tax for a NRC that derives profit from the provision of technical, management, consultancy, or professional services to persons resident in Nigeria, provided that the NRC does not have a fixed base or engages in other trade or business as defined by the CIT Act.
There are currently three (3) CIT rates applicable to companies in Nigeria depending on their turnover.
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