What You Need to Know About Nigeria Corporate Tax

Nigeria uses a tiered corporate tax system that rewards smaller businesses: companies with turnover up to N100 million pay 0% CIT, medium companies pay 20%, and large companies pay 30%. On top of that, a 4% Development Levy applies to assessable profits, consolidating several older levies into one. Below is a clear breakdown of how the tiers work, what forms to file, and when everything is due.

1. What is Corporate Tax?

Corporate tax in Nigeria is the tax charged on the profits of companies doing business in the country. Nigeria uses a tiered system based on annual turnover:

Small companies (turnover up to N100 million): 0% CIT (exempt)
Medium companies (turnover N100 million to N20 billion): 20% CIT
Large companies (turnover above N20 billion): 30% CIT

In addition, companies pay a Development Levy of 4% on assessable profits, which consolidates the previous Tertiary Education Tax, IT Levy, NASENI Levy, and Police Trust Fund Levy.

2. Who does it apply to?

This usually applies to:

Nigerian-registered companies (resident companies)
Foreign companies with a permanent establishment in Nigeria
Companies earning income from Nigerian sources
Small companies (exempt from CIT but still required to file returns)

3. Why does it matter?

Understanding corporate tax helps you:

Stay compliant with tax laws
Avoid penalties and late fees
Keep proper records
File and pay correctly
Plan your cash flow better

4. How does it work?

Here's the basic process:

Register your company with the Nigeria Revenue Service and obtain a Tax Identification Number (TIN)
Maintain proper books of account throughout the financial year
Calculate your taxable profit (revenue minus allowable expenses and capital allowances)
Determine your CIT tier based on annual turnover
Calculate the Development Levy at 4% of assessable profits
File your Company Income Tax return within 6 months of your financial year-end
Pay any balance of tax due by the filing deadline

5. What forms are involved?

CIT Return - Annual Company Income Tax return filed with the NRS
Self-Assessment Form - Declaration of estimated tax for the year
Audited Financial Statements - Required to accompany the CIT return
Tax Computation Schedule - Detailed calculation of taxable profits

6. What information do you need?

Before handling corporate tax, make sure you have:

Your company's Tax Identification Number (TIN)
Audited financial statements for the relevant year
Schedule of capital allowances
Details of all income sources
Records of allowable deductions
Proof of withholding tax credits
Prior year tax assessments and payments

7. Important deadlines

Filing frequency: Annual CIT return
Payment deadline: Within 6 months after the end of the financial year (18 months for newly incorporated companies)
Year-end requirements: File audited accounts and tax computations with the NRS

8. Common mistakes to avoid

Assuming small company status when turnover exceeds N100 million
Failing to file a return even when exempt from CIT (filing is still mandatory)
Not claiming available capital allowances and investment incentives
Missing the 6-month filing deadline, which attracts N100,000 for the first month and N50,000 per subsequent month
Overlooking the Development Levy obligation (4% of assessable profits)
Not maintaining proper transfer pricing documentation for related-party transactions

9. Simple example

Your company has annual turnover of N500 million and taxable profit of N80 million.

Since turnover is between N100 million and N20 billion, the company falls into the medium tier.

CIT at 20%: N80,000,000 x 20% = N16,000,000
Development Levy at 4%: N80,000,000 x 4% = N3,200,000
Total tax payable: N16,000,000 + N3,200,000 = N19,200,000

If the same company had turnover below N100 million, it would pay N0 CIT but still owe the Development Levy.

10. FAQ

Q: Are small companies really exempt from corporate tax? A: Yes. Companies with annual turnover of N100 million or less are exempt from CIT, capital gains tax, and the development levy under the 2026 tax reforms.

Q: What is the Development Levy? A: A 4% levy on assessable profits that replaces the previous Tertiary Education Tax, IT Levy, NASENI Levy, and Police Trust Fund Levy. It applies to medium and large companies.

Q: When is my CIT return due? A: Within 6 months after the end of your company's financial year. New companies have 18 months from incorporation to file their first return.

Q: Can I carry forward losses? A: Yes. Tax losses can be carried forward and offset against future profits, subject to limitations under the new tax laws.

Q: What replaced FIRS? A: The Federal Inland Revenue Service (FIRS) has been restructured into the Nigeria Revenue Service (NRS) under the 2026 tax reforms, with enhanced digital tools for compliance monitoring.

11. Final takeaway

Nigeria's tiered corporate tax system rewards small businesses with a 0% rate, while medium and large companies pay 20% to 30% plus a 4% Development Levy.

Caption

What you need to know about Nigeria corporate tax: Small companies (under N100M turnover) pay 0%, medium companies pay 20%, and large companies pay 30%, plus a 4% Development Levy on assessable profits.

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