CORPORATE TAXES IN NIGERIA
This is imposed on all the companies in Nigeria except companies engaged in petroleum operations.
CORPORATE TAXES IN NIGERIA
COMPANY INCOME TAX:
Is imposed on all the companies in Nigeria except companies engaged in petroleum operations. This tax is on the annual revenue profit a registered company, whatever profit is made in Nigeria. Note that companies whose annual gross turnover of not more than 25 million would be exempted from the Company Income Tax subject to the timely filing of the companies’ income tax returns.
The CIT rate is 30% for large companies (i.e. companies with gross turnover greater than NGN 100 million), assessed on a preceding year basis (i.e. tax is charged on profits for the accounting year ending in the year preceding assessment).
A foreign entity involved in digital transactions will be deemed to have created an SEP in Nigeria and is therefore liable to tax if it:
Derives income of NGN 25 million or equivalent in other currencies from Nigeria in a year Uses a Nigerian domain name (.ng) or registers a website address in Nigeria, or Has purposeful and sustained interactions with persons in Nigeria by customizing its digital platform to target persons in Nigeria (e.g. by stating the prices of its products or services in Naira).
For the purposes of (i) above, revenue derived from Nigeria includes that in respect of: Streaming or downloading of digital contents. Transmission of data collected about users in Nigeria. Provision of goods or services directly or through a digital platform. Inter mediation services that link suppliers and customers in Nigeria. Activities carried out by connected persons shall be aggregated to determine the NGN 25 million threshold (where applicable).
CAPITAL GAINS TAX: This is 10% tax imposed on capital gains arising from sale or exchange of properties know as chargeable assets. Capital gains are triggered when an asset is sold or realized.
EDUCATION TAX: This is chargeable on all companies registered in Nigeria. 2% Tax Charge billed of the company's accessible funds
VALUE ADDED TAX VAT: is a tax payable by the consumer , the tax is imposed on supply of good's and services. 7.5% Tax Collectible. Note companies do not pay VAT, they act as agent for the government for purpose of collecting the VAT.
PERSONAL INCOME TAX: This tax is payable by all individual as well as registered businesses and partnership except incorporated companies
SMALL COMPANY RATES
The CIT rate is 0% for companies with gross turnover of NGN 25 million or less.
Medium company rates The CIT rate is 20% for companies with gross turnover greater than NGN 25 million and less than NGN 100 million.
REAL ESTATE INVESTMENT COMPANIES
Real Estate Investment Companies approved by the Securities Exchange Commission to operate as a real estate investment scheme in Nigeria will be exempt from income tax on rental income, and dividend income earned in a financial year will be exempt from income tax provided that at least 75% of such income is distributed within 12 months. For the purposes of the Companies Income Tax Act, A Real Estate Investment Company is a Company (including a Real Estate Unit Trust) duly approved by the Securities and Exchange Commission
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080