Nigeria: Guidance on new corporate income tax rules, including 15% minimum tax
The guidance addresses new rules under the Nigeria Tax Act, 2025.
October 1, 2026
The Nigeria Revenue Service (NRS) on June 29, 2026, issued Information Circular No. 2026/01, clarifying its approach to computing corporate income tax and the development levy under the Nigeria Tax Act, 2025 (NTA).
The NTA introduced a consolidated framework for taxing corporate income, profits, and gains, and also replaced certain levies with a new development levy. The circular provides guidance on applying several provisions of the new framework, including:
- Basis periods: Assessable profits generally are determined based on the accounting period immediately preceding the year of assessment, with specific rules addressing commencement of business, changes in accounting dates, and cessation.
- Computation of total profits: The computation begins with accounting profit adjusted for tax purposes, with profits from other sources and chargeable gains added to determine total assessable profits. Allowable losses and available capital allowances are then deducted to determine total profits.
- Minimum effective tax: A 15% minimum effective tax rule applies to a constituent entity of a multinational enterprise group with aggregate group turnover of at least £750 million or its equivalent, as well as any other company with aggregate turnover of NGN 50 billion or more in the financial year.
- Development levy: The levy is imposed at 4% of total assessable profits and does not apply to a small company or a nonresident company. Assessable profits attributable to hydrocarbon tax are excluded.
- Capital allowances: Capital allowances may generally be claimed in full when sufficient assessable profits are available, subject to rules concerning VAT and import charges, mixed-use assets, and activities covered by the Economic Development Tax Incentive regime. The circular also provides transitional treatment for assets acquired before the commencement of the NTA.
- Loss relief: Losses generally may be offset only against profits from the same trade or business and may be carried forward until fully utilized. Losses from digital or virtual asset activities may be relieved only against gains from those activities.
- Partnerships and similar arrangements: A company's share of profits from partnerships, joint ventures, and similar arrangements is treated as a separate source and taxed accordingly.
Read a September 2026 report prepared by the KPMG member firm in Nigeria