Nigeria

Individuals resident in Nigeria are taxable on their worldwide income.

In the case of employment, a non-resident person is liable to tax in Nigeria if the duties of employment are wholly or partly performed in Nigeria, unless:

• the duties are performed on behalf of an employer who is in a country other than Nigeria,
• the remuneration of the employee is not borne by a fixed base of the employer in Nigeria, and
• the remuneration of the employee is liable to tax in that other country under the provisions of the avoidance of double taxation treaty (DTT) with that other country.

Foreign persons earning business profits from Nigeria are taxed under Section 6 of the PITA once a fixed base/taxable presence is created, subject to existing treaties.

Section 6(A) of the PITA introduces the significant economic presence (SEP) rules to the taxation of non-resident individuals, executors, or trustees carrying on a trade or business comprising technical, professional management, or consultancy (TPMC) services to persons resident in Nigeria. The MoF may, by order, define what constitutes SEP for this purpose. The MoF has yet to define what constitutes SEP for this purpose.

Personal income tax rates

The table below shows a summary of the taxable income tax bands and applicable rates of tax on an annual basis.

Note that employees who earn not more than the national minimum wage (currently NGN 30,000) are no longer liable to tax or deduction of monthly PAYE.

Minimum income tax

Where a taxpayer has no taxable income because of personal reliefs and allowances or total income produces a tax lower than the minimum tax, a minimum tax rate of 1% of the total income is payable.

Capital gains tax (CGT) on termination benefits

Income that qualifies as termination benefits (compensation for loss of office) in line with the Capital Gain Tax Act will be subject to CGT on the portion of the income above NGN 10 million (see Capital gains tax in the Other taxes section).