In this comprehensive guide, we’ll cover everything you need to know about Company Income Tax in Nigeria, including:
What is Company Income Tax?
Legal Framework Governing CIT
Who Should Pay Company Income Tax?
Company Income Tax Rates in Nigeria
CIT Filing and Payment Procedures
Due Dates for Filing CIT
Allowable Deductions and Tax Reliefs
Penalties for Non-Compliance
CIT Exemptions and Tax Holidays
Recent Developments in Company Income Tax
FAQs about Company Income Tax in Nigeria
What is Company Income Tax in Nigeria?
Company Income Tax (CIT) is a tax imposed on the profits of registered companies in Nigeria, excluding those engaged in petroleum operations. It is levied by the Federal Inland Revenue Service (FIRS) in accordance with the Companies Income Tax Act (CITA) Cap C21 LFN 2004 (as amended).
This tax is payable by both resident and non-resident companies that earn income from Nigeria.
Legal Framework Governing CIT in Nigeria
The main legislation regulating CIT is the Companies Income Tax Act (CITA). The FIRS is the agency responsible for the administration, assessment, collection, and enforcement of Company Income Tax.
Other relevant laws include:
Finance Acts (2019 to date)
Federal Inland Revenue Service (Establishment) Act
Tax Administration (Self-Assessment) Regulations
Who is Liable to Pay Company Income Tax?
The following categories of companies are liable to pay Company Income Tax in Nigeria:
- Resident Companies – Companies incorporated in Nigeria are taxed on their worldwide income.
- Non-Resident Companies – Foreign companies that derive income from Nigeria are taxed on the income derived from Nigeria only.
Note: Sole proprietorships and partnerships are taxed under Personal Income Tax, not CIT.
Company Income Tax Rates in Nigeria
As of the latest Finance Act amendments, the CIT rates in Nigeria are structured as follows:
| Annual Turnover | CIT Rate |
| Below ₦25 million | 0% (Small Companies) |
| ₦25 million – ₦100 million | 20% (Medium-Sized Companies) |
| Above ₦100 million | 30% (Large Companies) |
Minimum Tax:
Where a company makes no taxable profit, it may be subject to minimum tax, which is generally 0.5% of gross turnover, with some exceptions.
CIT Filing and Payment Procedures
Companies are required to file self-assessment tax returns using the FIRS TaxProMax platform. The steps include:
- Prepare financial statements (audited for active companies).
- Calculate taxable profit using allowable deductions and adjustments.
- Complete CIT forms online via FIRS TaxProMax portal.
- Pay applicable CIT through approved banks or online platforms.
- Submit returns including:
- Financial statements
- Tax computations
- Evidence of payment
- Capital allowances schedule
Due Dates for Filing Company Income Tax
Newly Incorporated Companies: Within 18 months from the date of incorporation or 6 months after the end of the first accounting year—whichever comes earlier.
Established Companies: Within 6 months after the end of the accounting year.
Late filing attracts penalties and interest.
Allowable Deductions and Tax Reliefs
To arrive at the taxable profit, companies can deduct the following expenses:
Salaries and wages
Rent and utility expenses
Depreciation (via capital allowances)
Interest on business loans
Advertising and marketing costs
Bad debts (under certain conditions)
Tax reliefs may also be available through:
- Pioneer Status Incentive (PSI): 3–5 years tax holiday
- Investment Tax Credit
- Export Expansion Grant (EEG)
Penalties for Non-Compliance
The FIRS imposes penalties for failure to comply with Company Income Tax regulations:
Late filing: ₦25,000 for the first month and ₦5,000 for each subsequent month of default.
Late payment: 10% penalty plus interest at the Central Bank of Nigeria’s minimum rediscount rate.
Failure to deduct or remit withholding tax (WHT) can also attract serious penalties.
CIT Exemptions and Tax Holidays
Some organizations and sectors are exempted or partially exempted from paying CIT:
- Small Companies (annual turnover < ₦25 million)
- Companies engaged in agriculture (exemption for first 4 years, renewable for 2 years)
- Pioneer Companies under PSI
- Non-profit organizations (if profits are not derived from trade or business)
Recent Developments in Company Income Tax
The Nigerian tax landscape is evolving. Key recent updates include:
Introduction of e-filing through TaxPro Max
Adjustments to CIT thresholds and rates in the Finance Acts
Improved enforcement by FIRS
Encouragement of Voluntary Assets and Income Declaration Scheme (VAIDS) for tax regularization
FAQs About Company Income Tax in Nigeria
- Is Company Income Tax the same as VAT?
No. CIT is tax on profits; VAT is a consumption tax on goods and services.
- Do I need to pay CIT if my company made no profit?
Yes, you may be subject to minimum tax, except if you’re a small company or fall under specific exemptions.
- What happens if I don’t pay CIT?
The FIRS can impose penalties, interest, or legal action, including sealing of business premises.
- Can I file my tax returns manually?
No. All CIT filings must now be done electronically via FIRS TaxPro Max.
- How do I get help with Company Income Tax filing?
You can consult a chartered accountant or tax consultant, or contact FIRS for guidance.
Conclusion
Company Income Tax is an essential part of doing business in Nigeria. Compliance not only prevents penalties but also builds credibility with regulatory bodies, partners, and investors. With the advent of digital filing systems and changes in tax legislation, staying informed and working with professionals is more important than ever.
Whether you’re a startup, SME, or multinational, understanding and properly handling your CIT obligations ensures your business stays on the right side of the law and contributes meaningfully to national development.
Need Help Filing Your Company Income Tax?
At Adebayo Oluwole & Associates, we help Nigerian companies calculate, file, and remit their CIT accurately and on time. Whether you’re a small startup or a growing enterprise, our experts are here to support your tax compliance journey.
Contact us today via 08155554892