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Amendments To Nigeria’s Tax Law


  1. profits of a nonresident company engaged in transmitting, emitting or receiving signals etc., to the extent that the company has significant economic presence in Nigeria are taxable.
  • profits of a nonresident company providing technical, management, consultancy or professional services to a person resident in Nigeria to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity are taxable.
  • What constitutes significant economic presence though yet to be defined by the Minister of Finance, generally relates to revenue generated on a sustained basis which indicates that the quantum and consistency of the revenue generating activity. 
  • Withholding tax applicable with respect to non-resident companies shall be the final tax on the income.
  • The Double Taxation Treaties signed by Nigeria with 13 other countries conflicts with the Finance Act on its provision of permanent establishment of non-residents as the basis of taxation in Nigeria as opposed to the Finance Act’s provision of significant economic presence as the basis of taxation, and has to be amended.
  • There is no clarification as to what qualifies as technical, management, professional and consulting services. Tax authorities via FIRS Information Circular 2006/02 revealed that the industry position requires that only arrangements that involve a transfer of technology should be classified as Technical and it is unlikely that an NRC providing services to a non-related Nigerian company on ad hoc basis would be looking to transfer technology to that Nigerian company.

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