Nigerians are indeed global citizens with footprints scattered across earth. The new Nigerian tax regime via the 2025 Tax Acts recognises and embraces this reality.

Today’s Nigerians are entrepreneurs in London, professionals in Dubai, innovators in Toronto, and investors with properties, shares, and family interests across multiple jurisdictions. Yet, behind this global mobility lies an equally global responsibility, understanding how the new Nigeria Tax Acts 2025 (NTA 2025) reshape the fiscal identity of the Global Nigerian.

For the first time, Nigeria Tax regime via the 2025 Act clearly outlines when and how non-resident individuals and companies are liable to tax in Nigeria, resolving long-standing gaps in the taxation of cross-border, digital, and offshore transactions.

Definition of a non-resident person

At the heart of this Tax regime is a clear definition of who qualifies as a non-resident. The Act defines a non-resident to include any person, individual or company, depending on context.

For individuals, a non-resident is someone who, in any year of assessment, is not domiciled in Nigeria, has no permanent home or habitual abode in the country, has no substantial economic or immediate family ties to Nigeria, spends less than 183 days (approximately six months) in Nigeria within the year, and is not serving abroad as a Nigerian diplomat. A non-resident company is one whose management, control, or incorporation is outside Nigeria. In practice, this ensures that Nigerians who temporarily work or study abroad but maintain strong ties through family, property, or business remain within the scope of Nigerian tax obligations, while genuine foreign residents and entities are treated distinctly.

Tax Identification number and tax on income

Non resident companies and individuals are subject to tax on income or gains arising from any trade, business, profession, or vocation carried on in Nigeria, as well as chargeable gains on profits from the disposal of assets located or deemed located in Nigeria. This framework also extends to income from digital activities directed at Nigerian markets. This includes app stores, digital ads, streaming services, cloud storage, gaming, and e-learning platforms, reflecting the government’s effort to keep pace with the realities of a digital economy. The principle is simple: if value is created or derived from Nigeria, Nigeria has the right to tax it. They are also required to obtain a Tax Identification Number (TIN) and file annual returns except where they earn only passive income from investments such as dividends.

Permanent establishment and significant economic presence

To determine when the right to tax above arises, the Act introduces two key concepts; permanent establishment (PE) and significant economic presence (SEP). A non-resident is considered to have a permanent establishment where it maintains a fixed place of business or one available for its operations, operates through an agent or representative, keeps a stock of goods from which deliveries are made, participates in design, construction, installation, or similar projects in Nigeria, or provides services in Nigeria through employees, agents, or subcontractors.

The law also recognises that business today is not always physical. A significant economic presence arises when a non-resident engages in electronic or digital activities targeted at Nigeria and derives profits from them. This includes online commerce, app stores, cloud computing, digital advertising, social media, gaming, data storage, search engines, or online teaching. In such cases, even without a physical presence, the income earned is taxable in Nigeria.

This means that an app downloaded in Lagos, a webinar hosted in Abuja, or a cloud service billed to a Nigerian customer could create taxable presence even for a company based abroad. In effect, Nigeria has joined the global move to tax value where it is economically generated, not merely where servers or offices are located.

Taxation of profits from Non-residents

In determining the taxable profits for non-residents with PE or SEP, the profits of the PE or SEP are computed as a separate and individual company. The company tax rates applicable to Nigerian companies also apply to them, though they are exempt from payment of Development Levy.

The computed profits will include deductions for expenses calculated in naira, though royalties and management fees sent to the parent company will not qualify as deductions unless the actual cost is re-imbursed. It should also be noted that where the profits of the PE or SPE cannot be accurately determined, the tax authorities will calculate it for them. Also, the tax payable cannot be less than the amount withheld at source, and where withholding tax does not apply, a minimum of 4% of the total Nigerian income is imposed.

Withholding Tax (WHT)

The NTA 2025 retains Withholding Tax (WHT) as a key compliance mechanism for non-resident individuals and entities. Where income such as dividends, interest, rent, royalties, or directors’ fees is payable to a non-resident, tax is deducted at source by the Nigerian payer and may serve as final tax on such income. It can also serve as the final tax on payments for services rendered outside Nigeria to a Nigerian Resident or a Nigerian permanent establishment of a non-resident, as well as payments for insurance/insured risks from outside Nigeria. Payments made by Nigerian residents or Nigerian branches of foreign companies for services rendered from abroad are subject to tax, typically through withholding tax, except for employment contracts, teaching services, or expenses borne by a foreign branch of a Nigerian resident.

Value Added Tax

All non-resident individuals and entities who supply goods and services to Nigeria are mandated to register for VAT and include it on all their invoices. However, the VAT will be collected at source by the Nigerian customer and remitted to the tax authorities on their behalf. The exemption to this is where the tax authorities appoint the non-resident supplier as a VAT collector. Non-resident suppliers may also appoint local representatives to handle VAT registration, filing, and remittance. This law ensures that VAT is properly accounted for in digital transactions and online imports.

Sector Taxes

The Act also provides for the taxation of non-resident shipping and air transport companies whose ships or aircraft call at Nigerian ports. They are taxed on profits from transporting passengers, goods, mail, or livestock loaded in Nigeria, with a minimum tax of 2% of the gross Nigerian revenue which is payable monthly. Where the home country of the non-resident uses a similar tax basis, the taxable profits are determined using global profit and depreciation ratios applied to the Nigerian revenue

Double Taxation Relief

Double taxation relief applies where the Non-resident is liable to pay tax on the income from Nigeria in his home country and in Nigeria also. Where Nigeria has a double taxation agreement with the home country, the non-resident is entitled to tax credits up to the lower of the Nigerian tax to be paid or the foreign tax paid.

Collectively, these reforms create one of the most comprehensive cross-border tax frameworks Nigeria has ever implemented. For the global Nigerian, whether a diaspora professional, cross-border entrepreneur, or multinational investor, the message is clear: tax obligations are now defined not only by where you live, but also by where your economic presence lies. Understanding these rules and planning accordingly will be critical to remaining compliant, protecting wealth, and sustaining long-term financial confidence in Nigeria’s evolving tax landscape.

In the next part of this series, we will explore how the 2025 Tax Acts shape the taxation of trusts and estate structures with special attention to the creation, administration, distribution and liabilities for parties. Whether you’re managing a family trust, acting as a trustee, or standing to benefit from one, this next chapter promises practical insights into how the law now sees and taxes your trust.