Nigeria: Digital activities subject to tax, “significant economic presence” of foreign companies

Nigeria: Digital activities subject to tax

Guidance from the Ministry of Finance implements the “Companies Income Tax (Significant Economic Presence) Order, 2020” for non-Nigerian companies with a “significant economic presence” in Nigeria.


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In general, digital activities and services are subject to tax in Nigeria under these measures, provided certain thresholds are satisfied.

The Finance Act, 2019 introduced the concept of significant economic presence to expand the scope of Nigerian tax on foreign companies deriving income from their activities in Nigeria—activities that previously were not subject to taxation. The order provides clarification on what would constitute a significant economic presence for foreign companies doing business, or providing services to customers, in Nigeria.

The requirements for a significant economic presence include that in an accounting year, the foreign entity derives N25 million (or foreign currency equivalent) in annual gross turnover from streaming or downloading services of digital content, data transmission, and goods or services provided through a digital platform.

Read a June 2020 report prepared by the KPMG member firm in Nigeria

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