ARTICLE · 10 JUNE 2020

Nigeria Issues Order On Significant Economic Presence

PwC Nigeria

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The Finance Act 2019 introduced an amendment to the Companies Income Tax Act to impose tax on a foreign entity with respect to certain services or digital transactions...

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The Finance Act 2019 introduced an amendment to the Companies Income Tax Act to impose tax on a foreign entity with respect to certain services or digital transactions if it has a Significant Economic Presence (SEP) in Nigeria. It further provides that the finance minister may by order, determine what constitutes SEP in Nigeria. Consequently, the finance minister has now issued an order with an effective date of 3 February 2020.

Digital transactions

A foreign entity involved in digital transactions will be deemed to have created an SEP in Nigeria and therefore liable to tax if it:

derives income of N25m or equivalent in other currencies from Nigeria in a year
uses Nigerian domain name (.ng) or registers a website address in Nigeria

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