Nigeria: local rules

From 1 January 2026 the Nigeria Tax Act 2025 (NTA) replaced the Companies Income Tax Act (CITA), and the Nigeria Tax Administration Act 2025 (NTAA) took over tax administration. The Nigeria Revenue Service (NRS) replaced FIRS as the federal tax authority. Two printed versions of the NTA exist: the June 2025 gazette and the copy the National Assembly certified in January 2026 after it found differences. This file follows the certified copy, where section numbers are often one lower than in the gazette. The arm's length rule is NTA s. 191 (s. 192 in the gazette). A company in an arrangement with a related party must keep the terms at arm's length and report the arrangement in the way the tax authority sets. If the terms are not arm's length, the authority can adjust them under the Transfer Pricing Regulations. NTA s. 190(3)(b) also treats a non-arm's length deal between connected persons as artificial, and s. 21 bars a deduction for a payment to a connected person that does not follow the Transfer Pricing Regulations. The Income Tax (Transfer Pricing) Regulations 2018 were not repealed: NTA s. 198(b) keeps old regulations in force unless they conflict with the new Act. No new TP regulations were found as of October 2026.

A connected person must keep contemporaneous TP documentation in writing or electronic form. It must be in place before the due date of the income tax return for the year (Regulations 16 and 17 and the Schedule). The OECD country profile says the Schedule follows the OECD master file and local file layout. It is not filed with the return. It must be handed to the tax authority within 21 days of a written request. A connected person whose controlled transactions total less than N300m may choose not to keep contemporaneous documentation, but the authority can still demand it, due 90 days after notice (Regulation 17(3)). There are two TP forms. The TP Declaration Form is filed once, within 18 months of incorporation or 6 months after the end of the first accounting period, whichever comes first (Regulation 13). It is updated within 6 months after the end of any accounting year in which the details changed. The annual TP Disclosure Form lists controlled transactions and is filed within 6 months after each accounting year end, or 18 months after incorporation, whichever is earlier (Regulation 14). Documents must be in English; the authority can ask for a certified translation.

Regulation 5 lists the comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split methods. It also allows another method if none of these can be applied reliably. There is no strict order. The most appropriate method is used, based on strengths and weaknesses, functional analysis, data available and comparability. If the data gives a spread of results, the interquartile range is the arm's length range (Reg. 5(6)). For commodity exports and imports, the quoted price on the transaction date is the reference unless the taxpayer proves an adjustment (Reg. 5(9)). Regulations 6 and 7 cover intra-group services and intangibles. The OECD Guidelines and UN Manual are used for interpretation (Reg. 18), but local tax law wins if they conflict (Reg. 19). Local comparables are scarce, so foreign ones are accepted. There is no safe harbour, no simplified rule for low value services and no formal secondary adjustment rule.

Failing to hand over TP documentation within 21 days of a request: the higher of N10m or 1% of the total value of controlled transactions, plus N10,000 for each day the failure continues (Regulation 16). A small taxpayer that misses the 90-day demand pays 1% of the value of each controlled transaction concerned, plus N10,000 a day. Other breaches of the Regulations carry the penalty in the relevant tax law. Under NTAA s. 101, a late, missing, incomplete or inaccurate return costs N100,000 for the first month and N50,000 for each further month. NTAA s. 102 adds N50,000 for a company that fails to keep or produce records. Unpaid tax carries a 10% surcharge plus compound interest at the Central Bank rate plus a spread (NTAA s. 65). A TP adjustment also leads to an extra assessment and the 10% charge on the extra tax. The NTAA allows the authority to remit penalties for good cause (s. 66). The exact penalties for a late TP Declaration or Disclosure Form were not confirmed from the Regulations. CbC penalties are in the CbC section below.

Nigeria has not adopted the OECD GloBE rules, so there is no GloBE Information Return and no QDMTT or UTPR. Instead NTA s. 57 sets a 15% minimum effective tax rate. If a company's covered taxes (income tax, petroleum taxes, the development levy and priority sector tax credit) are under 15% of its profit before tax in the audited accounts, it pays extra tax to reach 15%. In the certified copy of the Act it applies to a constituent entity of an MNE group with group turnover of at least 750 million (printed in pounds, which KPMG reads as a drafting error for euros) and to any other company with turnover of N50bn or more. The June 2025 gazette instead shows any MNE constituent entity and a N20bn turnover test. Approved free zone enterprises are mostly outside the rule. The computation and extra tax go in the annual return (NTAA s. 11(1)(d)). Under NTA s. 6(3), a Nigerian parent must also top up the tax of a foreign subsidiary that pays less than 15%, with detailed rules to come from NRS.

Weekend rule: the Interpretation Act s. 15 says an act due on a Sunday or public holiday is on time if done the next day that is not one. A period that ends on a holiday runs to the end of the next day that is not one. 'Holiday' means a Sunday or a public holiday, so a Saturday does not move a deadline. The dates in this tool move forward on that basis, and Sunday is the only rest day used. Holidays come from the Public Holidays Act. The Minister of Interior sets the dates of Eid al-Fitr, Eid al-Adha and Maulud each year by notice, and they follow the Hijri calendar. Christmas, Boxing Day, Easter and others are also confirmed by notice. No substitute weekday is given when a holiday falls on a weekend (Public Holidays Act s. 5). CbC Regulations 2018: a Nigerian ultimate parent with group revenue of N160bn or more in the prior year files a CbC report within 12 months of the group's year end, and Nigerian entities notify the authority of the reporting entity by the last day of that year. Because the naira has fallen, N160bn is now far below EUR 750m. APAs are available (Regulation 9, APA Guidelines of 27 November 2024, up to 3 years with rollback). Interest paid to connected persons is deductible only up to 30% of EBITDA. A small company pays 0% and other companies pay 30% (NTA s. 56; the certified copy lets the President cut the rate to 25% by order), plus a 4% development levy on assessable profit (s. 59). Tax is payable on or before the return due date (NTAA s. 49(1)).