Section 122

(1) Relief from double taxation under an agreement referred to in
Method of
section 121 of this Act shall be granted in accordance with the provisions of
calculating
this section and relevant provisions of Nigeria Tax Administration Act, 2025.
relief to be
allowed for
(2) The foreign tax paid to a treaty partner in accordance with the
double
agreement, and in respect of income or profits chargeable to income tax in
taxation
Nigeria may be allowed as a credit against tax payable under this Act.
(3) The Nigerian tax payable in respect of the income or profit which has
been charged to tax by a treaty partner shall be reduced by the amount of the
credit admissible under the terms of the agreement, provided that credit shall
not be allowed to a person who was not a resident of Nigeria during the rel-
evant year of assessment.
(4) Without prejudice to the provisions of subsection (3), the credit to be
allowed in subsection (2) shall be the lower of the –
(a) Nigerian tax attributable to the foreign income or profits; and
(b) the amount of tax paid to the treaty partner.
(5) The Nigerian tax under subsection (4)(a) attributable to the foreign
income or profits shall be the proportion of the foreign income to total income,
multiplied by the Nigerian tax.
(6) In computing the amount of chargeable income or assessable profits,
the following shall apply –
(a) deduction shall not be allowed in respect of a foreign tax, whether in
respect of the same or any other profits; and
(b) where profits or income chargeable depends on the amount received
in Nigeria, the amount shall be increased by the appropriate amount of the
foreign tax in respect of the profits.
A 466 2025 No. 7 Nigeria Tax Act, 2025
(7) Any claim for credit shall be made not later than two years after the
end of the year of assessment, and in the event of any dispute as to the amount
allowable, the claim shall be subject to objection and appeal in like manner as
an assessment.
(8) Where the amount of any credit given under the agreement is rendered
excessive or insufficient by reason of any adjustment of the amount of any tax
payable in Nigeria or elsewhere, nothing in this Act or Nigeria Tax Administration
Act, 2025 limiting the time for the making of assessments or claims for relief
shall apply to any assessment or claim to which the adjustment gives rise.
(9) Notwithstanding subsection (8), the assessment or claim shall be made
not later than two years from the time when such assessments, adjustments
and other determinations have been made, whether in Nigeria or elsewhere,
as are material in determining whether any of credit is due.
(10) Where, in accordance with any provision of the agreement, income
derived by a resident of Nigeria is exempt from tax under this Act, the exempt
income shall be taken into account in determining the rate of tax applicable on
the remaining income of such resident.