Nigeria cross-border: residence, non-residents, permanent establishment and double tax relief (2026)

From 1 January 2026 (the commencement date printed in the gazette) the Nigeria Tax Act 2025 ("NTA"; Act No. 7 of 2025, Official Gazette No. 117, 26 June 2025) is Nigeria's main income tax law. It replaced the Companies Income Tax Act and the Personal Income Tax Act. Procedure, returns and penalties are in the Nigeria Tax Administration Act 2025 ("NTAA"; Act No. 5 of 2025). The Federal Inland Revenue Service is now the Nigeria Revenue Service (NRS). This skill covers who is resident, how non-residents are taxed, and relief from double taxation.

Who this applies to

• Resident individuals are taxed on worldwide income, whether or not it is brought into Nigeria (NTA s12). An individual is resident in a year of assessment if any one of these applies (NTA s201, "resident individual"; the limbs are joined by "or"):

  • (a) are domiciled in Nigeria;
  • (b) have a permanent place available for their domestic use in Nigeria;
  • (c) have a place of habitual abode in Nigeria;
  • (d) have substantial economic and immediate family ties in Nigeria;
  • (e) are in Nigeria for 183 days or more in a 12-month period, counting annual leave and temporary absence; or
  • (f) serve as a Nigerian diplomat abroad.

  A "non-resident individual" is one for whom none of these applies (s201: all six negated limbs are joined by "and").

• Resident companies are "Nigerian companies": formed, registered or incorporated in Nigeria, or with their central or effective place of management or control in Nigeria (NTA s201, "Nigerian company" and "resident company").

• Employment income is Nigerian if the employee is resident, or if the duties are performed wholly or partly in Nigeria and the pay for that time is not properly taxable in the employee's country of residence (s13(1)).

• Non-residents are taxed on income accruing in or derived from Nigeria (s17(1)).

Not covered here, refer to a specialist:

• the deduction-at-source (withholding) rates, which are set in regulations not read for this version;
• transfer pricing methods (the NTA s191 regulations);
• the details of the Minister's significant economic presence regulations;
• individual treaty texts;
• the 15% minimum effective tax rate (s57);
• VAT on imported services.

Rates, bands and thresholds

Item	Amount	Source
Company income tax rate	30% (small companies 0%); reduced to 25% from a date set by Presidential order	NTA s56
Small company	gross turnover NGN 100 million or less and total fixed assets NGN 250 million or less	NTA s201
Minimum tax under s17	not less than the tax withheld at source; where the income is not liable to deduction at source, 4% of total income generated from Nigeria	NTA s17(8)
Minimum tax, non-resident shipping and air transport	2% of gross revenue from carriage loaded in Nigeria, computed and paid monthly	NTA s18(6)
Residence day count (individuals)	183 days or more in a 12-month period (one of six alternative tests)	NTA s201
Development levy	4% of assessable profits; not charged on small companies or non-resident companies	NTA s59(1)
Foreign tax credit limit	the lower of the Nigerian tax on the foreign income and the foreign tax paid	NTA ss119(2), 121(4)
Deadline to claim treaty credit	2 years after the end of the year of assessment	NTA s121(7)
Non-resident company return	no later than 6 months after the end of the accounting year (company in business for more than 18 months)	NTAA s11(5)(a)

The taxable base

When a non-resident's profits are taxable in Nigeria (s17(3)).

• (a) A permanent establishment (PE) or significant economic presence (SEP). Profit is taxed to the extent it is attributable to the PE or SEP.
• (b) Services supplied from outside Nigeria. Payments by a Nigerian resident, or a Nigerian PE of a non-resident, for services furnished from outside Nigeria to a Nigerian resident or PE are taxable. Exceptions:
  • payments to the payer's own employee under a contract of employment;
  • payments by an individual for teaching at or by an educational institution;
  • payments by a Nigerian resident's foreign PE that bears the expense itself.
• (c) Insurance. Payments by a Nigerian resident or PE for insurance premiums or risks insured from Nigeria are taxable.

Final tax. Tax deducted at source on (b) and (c) payments is the final tax, unless the payment is attributable to a PE or SEP (s17(4)). For a non-resident recipient, tax deducted on dividends, interest, rent, royalties, directors' fees and payments to entertainers and sportspersons is also the final tax once paid over (NTAA s51(2)). A non-resident company whose only Nigerian income has suffered final deduction need not file a return (NTAA s11(3)).

Cross-reference note: NTA s17(4) and s19(2) refer to deduction at source under "section 50" of the NTAA. In the gazetted NTAA, deduction at source is s51; s50 is instalment payments for upstream petroleum and midstream gas companies.

Gains (s17(2)). A non-resident's gains are taxable if they relate to a trade carried on in Nigeria, or to an asset located, or deemed located, in Nigeria.

What creates a PE (s17(9)(a)).

• A place in Nigeria through which the business is carried on, or that is at its disposal. A "place" (s17(9)(d)) is any location owned, rented, leased or otherwise available, and includes:

  • a place of management;
  • a branch, sales outlet, office, factory or workshop;
  • a mine, well, quarry or other place of extraction;
  • facilities used in exploring natural resources;
  • a building, construction, assembly or installation site;
  • any place for supervisory activity or services.

  How long the place is used does not matter.

• A person in Nigeria authorised to conduct business on its behalf.

• A stock of goods in Nigeria from which deliveries are made.

• A project in Nigeria (surveys, design, delivery, construction, installation, commissioning, decommissioning or supervision), however it is split between entities.

• Services furnished in Nigeria through employees, agents or subcontractors.

Employing Nigerian residents is not, by itself, a PE or SEP, as long as their duties are not mainly for customers in Nigeria (s17(9)(c)).

What creates a SEP (s17(9)(b)). Transmitting signals, data or content of any kind into Nigeria electronically for an activity with attributable profit, subject to the Minister's regulations. Examples include e-commerce, app stores, online advertising, platforms, payments, user data, search, digital content, gaming, cloud and online teaching.

PE profit rules (s17(5)).

• The PE is treated as having its head company's credit rating, and the equity and loan capital it would reasonably have under s191 (arm's length).
• Profits include same-or-similar sales and services made directly into Nigeria by the non-resident or its connected persons.
• Costs are deductible only if incurred for the PE's own profits.
• Royalties, fees or similar payments to the non-resident or connected persons for patents or other rights are not deductible, except reimbursement of actual expenses.

Profit-margin fallback (s17(6)–(7)). Where the PE or SEP profit cannot be ascertained, or is lower than the non-resident's profit margin x total income from Nigeria, the profit is that margin x Nigerian income. The margin is EBIT / revenue from the published audited accounts, or a comparable company's (s17(9)(e)).

Minimum tax (s17(8)). The tax payable under s17 is never less than the tax withheld at source under the NTAA. Where the income is not liable to deduction at source under the NTAA, it is never less than 4% of total income generated from Nigeria.

Dividends to non-residents (s19). No further tax beyond the tax deducted at source under the NTAA, and no right to a refund of it.

Shipping and air transport (s18). A non-resident whose ships or aircraft call at Nigerian ports is taxed on carriage loaded in Nigeria. Profit uses global profit and depreciation ratios where the home tax base is similar. Otherwise it is the s17(9)(e) margin x Nigerian turnover, or a fair percentage of gross revenue. The minimum is 2% of that gross revenue, computed and paid monthly (s18(6)).

Double taxation relief.

• Unilateral relief (s119). A resident taxed abroad on foreign income gets a credit for the lower of:
  • the Nigerian tax attributable to that income (foreign income / total income x Nigerian tax, excluding Chapter Three taxes); and
  • the foreign tax paid.
• Treaties (ss120–121).
  • A double taxation agreement takes effect on ratification or domestication by the National Assembly. Treaties already in force are deemed made under s120 and apply from 1 January after entry into force.
  • Benefits go only to residents of the treaty partner who are the beneficial owners of the income. Treaty-shopping is excluded.
  • The credit is the lower of the Nigerian tax attributable and the treaty-partner tax (s121(4)–(5)). There is no credit for someone not resident in Nigeria in the year (s121(3)), and no deduction for foreign tax in computing chargeable income or assessable profits (s121(6)(a)).
  • Claims must be made within 2 years after the end of the year of assessment.
  • There is no relief for a global minimum top-up tax on a PE (s120(8)).

Deadlines and filing

Obligation	When	Source
Company self-assessment return, including a non-resident company with Nigerian taxable profit	not later than 6 months after the end of the accounting year (company in business more than 18 months); a new company within 18 months of incorporation or 6 months after its first period end, whichever is earlier; on cessation within 6 months of ceasing	NTAA s11(1), (2), (5)
Non-resident company return contents	the company's full audited financial statements and a financial statement of the Nigerian operations attested by an independent qualified or certified accountant in Nigeria; tax computations on profits attributable to the Nigerian operations; statement of Nigerian profits by source; self-assessment forms; proof of payment; effective tax rate computation	NTAA s11(2)
No return needed	where all Nigerian income suffered final deduction at source	NTAA s11(3)
Shipping and airline monthly return, with evidence of payment of the s18 tax and a gross revenue statement backed by invoices	not later than the 21st day of the following month	NTA s18(6); NTAA s21
Treaty credit claim	within 2 years after the end of the year of assessment	NTA s121(7)

Penalties and interest

These are the general NTAA penalties; Part II of NTAA Chapter Four has separate rules for petroleum operations.

Default	Penalty	Source
Failure to file a return, or knowingly filing an incomplete or inaccurate one	NGN 100 000 for the first month, plus NGN 50 000 for each later month the failure continues	NTAA s101
Tax not paid within the prescribed period	10% of the tax payable, plus interest from the due date until payment: for naira, the Central Bank of Nigeria monetary policy rate plus a spread set by the Minister; for foreign currency, SOFR (or successor rate) plus a spread set by the Minister	NTAA s65(1)
Failure to collect, deduct or withhold tax	administrative penalty of 40% of the amount not deducted	NTAA s105
Deducted tax not remitted by the 21st day of the following month	the amount deducted, plus a penalty of 10% a year of that amount, plus interest at the CBN monetary policy rate; on conviction, up to 3 years' imprisonment or a fine, or both	NTAA s107(1), (3)

Penalty and interest are not tax for the purposes of claiming any relief (s65(3)), and the tax authority may remit them for good cause (s66). A relevant tax authority direction treating a non-arm's-length transaction between connected persons as artificial can be appealed like an assessment (NTAA s46(2)–(3)).

Cross-border points

This whole skill is about cross-border points. In short:

• residence follows the multi-test definitions above;
• non-residents are taxed through a PE or SEP, or by final deduction at source on services and insurance payments;
• PE profits follow arm's length rules with an anti-avoidance floor: the profit-margin fallback and the 4% minimum;
• double tax relief is by credit; under a treaty, foreign tax is never deductible (s121(6)(a)).

Worked examples

Example 1: non-resident engineering firm with a Nigerian PE

Delta Engineering BV (Netherlands) runs a project office in Lagos, which is a PE under s17(9)(a). In 2026 it earns NGN 500 000 000 of income from Nigeria. Its Nigerian accounts show profit of only NGN 10 000 000. Its published audited accounts show EBIT / revenue of 12%. The example assumes none of this income is liable to deduction at source under the NTAA (the deduction regulations were not read; check them before relying on this).

• Profit-margin floor (s17(7)): 12% x 500 000 000 = 60 000 000. That is higher than the 10 000 000 reported, so the deemed profit is 60 000 000.
• Tax at 30%: 18 000 000.
• 4% minimum (s17(8)): the income is not liable to deduction at source, so the minimum is 4% x 500 000 000 = 20 000 000.
• Tax payable: the higher figure, NGN 20 000 000. The development levy does not apply to non-resident companies (s59(1)).

name: Nigeria non-resident PE, income NGN 500m, margin 12%, no WHT (2026)
inputs:
  nigerian_income: 500000000
  reported_profit: 10000000
  group_margin: 0.12
  rate: 0.30
steps:
  - margin_profit: nigerian_income * group_margin
  - deemed_profit: max(reported_profit, margin_profit)
  - tax_at_rate: deemed_profit * rate
  - minimum_tax: nigerian_income * 0.04
  - tax_payable: max(tax_at_rate, minimum_tax)
expected:
  margin_profit: 60000000.00
  deemed_profit: 60000000.00
  tax_at_rate: 18000000.00
  minimum_tax: 20000000.00
  tax_payable: 20000000.00

Example 2: resident company with foreign income, unilateral credit

Lagos Trading Ltd (a Nigerian company) has total taxable profits of NGN 200 000 000 for 2026. NGN 50 000 000 of that comes from a branch in a country with no treaty with Nigeria. The branch paid NGN 12 000 000 of foreign tax.

• Nigerian company tax: 30% x 200 000 000 = 60 000 000.
• Nigerian tax attributable to the foreign income: 50 000 000 / 200 000 000 x 60 000 000 = 15 000 000.
• Credit: the lower of 15 000 000 and 12 000 000 = 12 000 000. Net company income tax: 48 000 000. The 4% development levy (s59) is charged separately and is left out of this example.
• The edge: if the branch had paid 20 000 000 of foreign tax, the credit would stop at 15 000 000 (s119(2)) and the extra 5 000 000 would not be credited. Section 119 does not itself say whether that excess is deductible; the express no-deduction rule (s121(6)(a)) is written for treaty cases.

name: Nigeria unilateral foreign tax credit, s119 (2026)
inputs:
  total_profit: 200000000
  foreign_income: 50000000
  foreign_tax_paid: 12000000
  rate: 0.30
steps:
  - nigerian_tax: total_profit * rate
  - attributable: foreign_income / total_profit * nigerian_tax
  - credit: min(attributable, foreign_tax_paid)
  - net_tax: nigerian_tax - credit
  - credit_if_foreign_20m: min(attributable, 20000000)
expected:
  nigerian_tax: 60000000.00
  attributable: 15000000.00
  credit: 12000000.00
  net_tax: 48000000.00
  credit_if_foreign_20m: 15000000.00

Ask the client first

1. For individuals: domicile, a home or habitual abode in Nigeria, economic and family ties, and the days spent in Nigeria in any 12-month period.
2. For companies: the place of incorporation, and where central and effective management and control is exercised.
3. What the non-resident does in Nigeria: offices, agents, stock, projects, staff or subcontractors, digital services into Nigeria.
4. Which Nigerian payments suffered deduction at source, and at what rate.
5. The group's published audited accounts (EBIT and revenue), for the profit-margin test.
6. Foreign income and foreign tax paid, the country involved, and whether a ratified treaty applies.

Sources

Source	URL	Read on
Nigeria Tax Act 2025 (Act No. 7 of 2025), Official Gazette No. 117 of 26 June 2025 (commencement 1 January 2026; ss12, 13, 17, 18, 19, 56, 57, 59, 119, 120, 121, 191; s201: "Nigerian company", "resident company", "resident individual", "non-resident individual", "small company")	https://nass.gov.ng/documents/download/11249	2026-10-29
Nigeria Tax Administration Act 2025 (Act No. 5 of 2025), Official Gazette No. 117 of 26 June 2025 (ss11, 21, 46, 50, 51, 65, 66, 101, 105, 107)	https://nass.gov.ng/documents/download/11250	2026-10-29
Nigeria Revenue Service, Nigeria Tax Act 2025 overview page (read for the NTA is the principal substantive tax law and replaces fragmented federal tax statutes; page updated January 2026)	https://www.nrs.gov.ng/tax-laws/nigerian-administration-act	2026-10-29

Not yet confirmed:

• The deduction-at-source (withholding) rates and regulations under the NTAA, including those on dividends, interest, royalties and services to non-residents.
• The spread over the monetary policy rate or SOFR that the Minister sets for late-payment interest (NTAA s65(1)(b)–(c)).
• Whether foreign tax above the s119 credit cap is deductible for a non-treaty country.
• Whether the Presidential order cutting the company rate to 25% has been issued.
• The Minister's significant economic presence regulations.
• The list of ratified treaties and their rates.
• The Transfer Pricing Regulations referred to in s191. The 2018 text was unreachable from an official source on 2026-10-29.