Foreign companies that are not registered in Nigeria but provide digital, technical, professional, management or consultancy services to Nigerian customers would now be liable to income tax in Nigeria once it is established that they have significant economic presence (SEP) in the country.
The Companies Income Tax (Significant Economic Presence) Order 2020 (Order) signed by the Honourable Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, provides guidance on the Significant Economic Presence (SEP) concept introduced by the Finance Act 2019.
The Order which commenced on 3rd February 2020 expands the scope of companies liable to income tax such that non-resident companies deriving income from activities in Nigeria would be assessed for taxation purposes and may be liable to tax.
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