Section 17

(1) The income, profits or gains of a non-resident person accruing in, Non-Resident
or derived from Nigeria are chargeable to tax in accordance with the provisions person
of this Act.
(2) Gains derived by a non-resident person from disposal of chargeable
assets are taxable in Nigeria where the gains relate to –
(a) a trade, business, profession or vocation carried on by the non-resident
person in Nigeria;
(b) any asset located in Nigeria; or
(c) any asset deemed to be located in Nigeria under this Act.
(3) Profits derived from any trade, business, profession or vocation carried
on by a non-resident person are taxable in Nigeria where –
(a) the person has a permanent establishment or significant economic
presence in Nigeria to the extent that the profit is attributable to the permanent
establishment or significant economic presence;
(b) payment is made by a person resident in Nigeria or a permanent
establishment of a non-resident person in Nigeria, in respect of services
furnished from outside of Nigeria to a resident of Nigeria or a Nigerian
permanent establishment of a non-resident person, except where the payment
is made –
(i) to an employee of the person making the payment under a contract
of employment,
(ii) by an individual for teaching in an educational institution or for
teaching by an educational institution, or
(iii) by a foreign permanent establishment of a Nigerian resident and the
expense is borne by that permanent establishment; or
(c) payment is made to that person by a person resident in Nigeria or a
Nigerian permanent establishment of a non-resident person, in respect of
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insurance premiums or risks insured from the territory of Nigeria.
(4) Any amount deducted at source in accordance with section 51 of
Nigeria Tax Administration Act, 2025 from the payments made for any of the
activities mentioned in subsection (3) (b) and (c), shall be the final tax on that
payment unless the person has a permanent establishment or significant
economic presence in Nigeria to which the payment is attributable.
(5) The income, profits or gains of a non-resident person that are
attributable to its permanent establishment in Nigeria shall be ascertained in
accordance with the provisions of this Act, subject to the following
conditions –
(a) the permanent establishment shall be deemed to have the same credit
rating as the non-resident company of which it is a permanent establishment;
(b) the permanent establishment shall be deemed to have such equity
and loan capital as it could reasonably be expected to have in accordance
with section 191 of this Act ;
(c) the taxable profits to be attributed to the permanent establishment
shall include income arising from the –
(i) sale of goods or merchandise of the same or similar kind as those
sold through that permanent establishment, made directly to Nigeria by
the non-resident person or its connected persons, and
(ii) furnishing of services or any other business activity carried on in
Nigeria by the non-resident or its connected persons of the same or
similar kind as those effected through the permanent establishment;
(d) deduction shall not be made in respect of any cost except it was
incurred for and in the production of the taxable profits attributable to the
permanent establishment; and
(e) deduction shall not be allowed in respect of amounts paid or payable,
by the permanent establishment to the non-resident person or any of its
connected persons, by way of royalties, fees or similar payments in return
for the use of patents or other rights, other than towards reimbursement of
actual expenses.
(6) Where the total profits attributable to a permanent establishment or
significant economic presence in Nigeria cannot be ascertained in accordance
with subsection (5), the total profits shall be the amount resulting from applying
the profit margin of the non-resident person to the total income generated from
Nigeria.
(7) Where the total profits attributable to the permanent establishment or
significant economic presence in Nigeria is lower than an amount resulting
from applying the profit margin of the non-resident person to the total income
generated from Nigeria, the total profits shall be the amount resulting from
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applying the profit margin of the non-resident person to the total income generated
from Nigeria.
(8) Notwithstanding the provisions of subsections (6) and (7), the tax
payable under this section shall not be less than the tax withheld at source
under Nigeria Tax Administration Act, 2025, and where the income is not liable
to a deduction of tax under Nigeria Tax Administration Act, 2025, 4% of the
total income generated from Nigeria.
(9) For the purposes of this section –
(a) a non-resident person is deemed to have a permanent establishment
in Nigeria where the person –
(i) has a place, in Nigeria, through which its business is wholly or
partly carried on or at its disposal for the purposes of its business,
(ii) operates a trade or business through a person in Nigeria author-
ised to conduct on its behalf, or on behalf of some other persons controlled
by it, or which have a controlling interest in it,
(iii) maintains a stock of goods or merchandise in Nigeria from which
deliveries are made by a person on its behalf,
(iv) solely or together with any other person, executes a project in
Nigeria involving surveys, designs, deliveries, building, construction,
assembly or installation, commissioning or decommissioning or any
supervisory activity in connection with those activities, irrespective of
any split or number of entities that performed any of the activities of the
project and whether or not only part of the project was carried out in or
outside Nigeria, or
(v) furnishes any service in Nigeria through employees, agents,
subcontractors or other persons engaged by it for such purpose;
(b) a non-resident person shall, subject to any regulations that may be
issued by the Minister to that effect, have a significant economic presence
in Nigeria where the person transmits, emits or sends by itself or through
other person, signals, sounds, messages, images or data of any kind by
cable, radio, electromagnetic systems or any other electronic or wireless
apparatus to Nigeria in respect of any activity, including electronic commerce,
application store, high frequency trading, electronic data storage, online
adverts, participative network platform, online payments, supply of user-
data, search engines, digital content services, online gaming, cloud computing,
online teaching services, and profit can be attributable to such activity;
(c) a non-resident person shall not be deemed to have a permanent
establishment or significant economic presence in Nigeria solely by reason of
employing persons resident in Nigeria, to the extent that the duties of such
employment are not performed primarily for customers in Nigeria;
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(d) "a place" means any location in Nigeria, whether owned, rented,
leased or otherwise available for the use of the person, irrespective of the
length of time it is used and shall include –
(i) a place of management,
(ii) a branch,
(iii) a sales outlet,
(iv) an office,
(v) a factory,
(vi) a workshop,
(vii) a mine, a well for crude oil, gas, bitumen, water or any other
natural resource, a quarry or any other place of extraction or exploitation
of natural resources, or any supervisory activity in connection to it,
(viii) facilities, including vessel, any installation or structure, used in
the exploration of natural resources, or any supervisory activity in
connection with such facilities,
(ix) a building, construction, assembly or installation site, or
(x) any place for performing supervisory activity or any service or
activity; and
(e) "profit margin" of a person shall be the proportion of the earnings
before interest and tax (EBIT) to income or revenue in its published audited
financial statement, and in the case of persons that have no published
financial statements for the period or are not required to publish financial
statements, the profit margin as may be ascertained by the relevant tax
authority from the published financial statements of a comparable company.
Non-resident