Understanding How Nigeria Taxes Profits from Abroad

Profits Made Anywhere Still Count in Nigeria

Many Nigerian companies are expanding their operations beyond the country’s borders. While this creates exciting opportunities, it also brings new responsibilities — especially when it comes to taxes.

Under Nigerian tax law, profits made by a Nigerian company are treated as if they were earned in Nigeria — no matter where in the world they come from. Whether revenue is generated locally or from a foreign subsidiary, it is still taxable in Nigeria.

💸 Even Undistributed Foreign Profits Are Taxed

If a Nigerian company controls a foreign company and that foreign company makes profits but decides not to send the money back to Nigeria, those profits are still considered taxable in Nigeria.

This means that Nigerian companies can’t avoid tax simply by leaving profits in their foreign branches — Nigeria treats them as if they were brought home.

⚖️ Covering Tax Gaps from Foreign Subsidiaries

If a foreign company linked to a Nigerian company pays less than the required minimum effective tax, the Nigerian parent company must pay the difference.

This ensures that all profits connected to Nigeria are taxed fairly, even when they are made abroad.

📝 Staying Compliant is Key

The Nigerian tax authorities (the FIRS) also release detailed rules to help companies follow these requirements. Staying informed about these updates is essential for business owners, CFOs, and finance teams managing cross-border operations.

📌 Final Thoughts

Expanding globally is exciting — but compliance must go hand-in-hand with growth.
At Baha’s Books, we simplify complex financial and tax concepts to help your business stay compliant, avoid penalties, and focus on what truly matters: growth.

📊 Ready to take your business global — and stay tax compliant?
Visit us at bahasbooks.com

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