Foreign/Non-Resident Companies and the Companies Income Tax (Significant Economic Presenc) Order, 2020

The President of Nigeria assented to the Finance Bill (now Finance Act) on January 13, 2020, and it hugely altered and impacted some provisions of the Companies Income Tax Act (CITA) amongst
others.

Prior to the Finance Act, a non-resident company is only liable to Nigerian tax if it has a fixed base in Nigeria, through which it carries on business.However,this has changed,as one of the major changes introduced by the Finance Act is the taxation of non-resident companies and business entities in Nigeria, including online and digital businesses, once they have a significant economic presence (SEP) in Nigeria and the profit is attributable to the activity. The Finance Act entrusted the duty of determining what constitutes SEP on the Minister.

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