Section 9

(1) Where a Nigerian company declares dividend out of profits Substitution
on which no tax is payable due to – of dividend
for total
profit
(a) there being no total profits, or
(b) total profits which are less than the amount of dividend which
it declared, whether or not the recipient of the dividend is a Nigerian
company,
the company paying the dividend shall be charged to tax at the rate
prescribed in section 56 of this Act as if the dividend is the total
profits of the company for the year of assessment to which the ac-
counts, out of which the dividend is declared, relates.
(2) The provisions of subsection (1) shall not apply to –
(a) dividends declared out of the retained earnings of a company,
to the extent that the profits or gains included in the retained earnings
have been taxed under the provisions of this Act ;
(b) dividends declared out of profits or gains that are exempt from
income tax by this Act;
(c) franked investment income as provided in this Act; or
(d) distributions made by a real estate investment company to its
shareholders from rental income and dividend income received on
behalf of those shareholders, whether such dividends are paid out of
profits of the year in which the dividend is declared or out of profits of
previous reporting periods.