Nigeria

A company is considered a Nigerian company if:  

• it is formed, registered, or incorporated under any law in Nigeria 

• its central place of management or control is in Nigeria, or

• its effective place of management or control is in Nigeria.

The profits of a Nigerian company are deemed to accrue in Nigeria and chargeable to tax in Nigeria irrespective of where the profits arise and regardless of whether the profits have been brought into or received in Nigeria.

A company is non‑resident where it does not meet any of the listed conditions for being a Nigerian company (i.e. it is not formed, registered, or incorporated in Nigeria and neither its central nor effective place of management or control is in Nigeria).

Under the Nigeria Tax Act, Nigeria can tax a non-resident company’s profits through its taxable nexus (i.e. digital SEP or PE rules). 

Once a non‑resident has a PE in Nigeria, income connected with that Nigerian contract / business can be taxed in Nigeria even if key work is performed offshore through a split contract (e.g. engineering / procurement done outside Nigeria for a Nigerian project) commonly referred to as the anti-fragmentation rules.

Permanent establishment (PE)

The taxation of a non-resident person’s profit is triggered where that person has a PE or an SEP in Nigeria to the extent that the profit is attributable to that PE or SEP.

A non-resident person is deemed to have a taxable presence in Nigeria where the person:

• Has a place in Nigeria through which its business is wholly or partly carried on or at its disposal for the purpose of its business.

• Operates a trade or business through a person in Nigeria authorised to conduct the trade or business on its behalf on behalf of some other persons controlled by it or that has a controlling interest in it.

• Maintains a stock of goods or merchandise in Nigeria from which deliveries are made by a person on its behalf.

• Solely, or together with any other person, executes a project in Nigeria involving activities such as surveys, designs, deliveries, building, construction, assembly or installation, commissioning or decommissioning, or any supervisory activity related to those activities, regardless of the split of contracts. 

• Furnishes any service in Nigeria through employees, agents, subcontractors, or other persons engaged by it for such purpose.
• Supplies digital products to the Nigerian market.

Note: A non-resident entity (company or individual) is not considered to have a PE solely due to employing persons resident in Nigeria, provided those employees do not primarily perform their duties for customers within Nigeria.