Nigeria: Foreign companies having “significant economic presence” for tax purposes

Nigeria: "Significant economic presence"

An order issued by the government of Nigeria provides guidance regarding the determination of “significant economic presence” for purposes of the companies income tax, and can include foreign companies that derive income in Nigeria through digital means.


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The issuance of the order implements companies tax law provisions introduced by the Finance Act, 2019.

The order defines what constitutes a “significant economic presence” in relation to taxable income derived by a foreign company—that is, any company other than a Nigerian company in Nigeria—based on section 13(2)(c) and (e) of companies income tax law.

The order stipulates a ₦25 million turnover threshold for a foreign company deriving income in Nigeria through digital means or for a foreign company involved in the provision of technical, professional, management or consultancy services when payment is received from a person resident in Nigeria or a fixed base or agent of a foreign company in Nigeria.

The order [PDF 1.56 MB] also:

  • Allows an exemption of payments made under a contract of employment by an educational institution and payment by a foreign fixed base of a Nigerian company
  • Defines other terms such as connected persons, technical services, and wireless and electronic apparatus

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