Impact Of New Tax Reform Laws On Nigerians In Diaspora

Many Nigerians successful the diaspora person raised definite questions regarding the caller taxation betterment laws and the imaginable implications.

In a caller engagement with immoderate Nigerians successful the diaspora, Chairman of the  Presidential Committee connected Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele explained the cardinal provisions of the caller taxation laws, provided clarifications to the areas of concerns and mentation to the pressing questions. Here is an extraction from the dialogue:

Will the wealth I nonstop to Nigeria (for family, upkeep, gifts, projects oregon different payment) beryllium taxed nether the caller laws?

A: No, genuine idiosyncratic transfers specified arsenic household remittances, gifts, refunds (e.g., formation tickets), oregon assemblage savings contributions are not treated arsenic taxable income. Only income earned oregon deemed to beryllium income (e.g., wages, concern profits, concern returns) is taxable to tax. Every idiosyncratic is required to self-report their income and wage taxation wherever applicable. Tax authorities are expected to contented guidelines connected however to separate taxable from non-taxable inflows.

Will I beryllium taxed twice, overseas and successful Nigeria, connected the aforesaid income?

A: No. Income earned overseas and brought into Nigeria by a non-resident idiosyncratic is present specifically exempted from taxation successful Nigeria careless of whether taxation was paid overseas oregon not, for lawsuit those who reside successful countries with nary idiosyncratic income tax. In addition, Nigeria has Double Taxation Agreements (DTAs) with respective countries, and the caller taxation laws supply for a unilateral alleviation wherever a DTA does not beryllium to guarantee that the aforesaid income is not taxed twice.

How is taxation residency determined, and volition non-residents with Nigerian assets oregon accounts beryllium taxed? Any interaction connected dual-citizenship?

Residency is based connected the 183-day regularisation (cumulative days of carnal beingness successful Nigeria wrong a 12-months period). Non-residents are taxed lone connected income derived from Nigeria (e.g., rental income, dividends, concern profits). Diaspora Nigerians surviving overseas who are not taxation nonmigratory successful Nigeria are not taxed connected their overseas employment oregon concern income. Dual citizenship has nary interaction connected the taxation presumption of an idiosyncratic whether nonmigratory oregon non-resident successful Nigeria.

How bash the caller laws impact concern (stocks, existent estate,, bonds, treasury bills, Sukuk, etc.)?
Generally, income from investments successful Nigeria are either exempt, taxable to superior gains taxation (CGT) oregon withholding taxation arsenic a last tax. Government bonds including Sukuk are taxation exempt. CGT applies to the merchantability of existent property different than merchantability of proprietor occupied buildings. Shares are exempt up to proceeds not exceeding N150 cardinal and N10 cardinal gains successful a year. Dividends, non-government enslaved involvement and rental income are taxable to withholding taxation astatine 10% arsenic last taxation which whitethorn beryllium reduced to 7.5% for recipients successful definite countries specified arsenic the UK, South Africa and China.

Will incomes specified arsenic pensions, stipends, oregon distant enactment net of diasporans beryllium taxed if received into a slope relationship successful Nigeria oregon earned portion temporarily contiguous successful Nigeria?

Only income that arises successful Nigeria is taxable for non-residents. Pensions and stipends from overseas are not taxed successful Nigeria unless received for enactment done successful Nigeria. Remote workers are taxed based connected the rules successful the state wherever they are nonmigratory oregon gain specified income, not simply wherever outgo is made. For residents (see Q3), worldwide income applies, taxable to reliefs, allowances, and exemptions e.g., low-income thresholds.

Do Nigerians overseas needs a Tax Identification Number (TIN) oregon to record yearly taxation returns successful Nigeria?

It depends. A TIN is not required and determination is nary request to record taxation returns unless you gain employment oregon concern income from Nigeria. Non-residents without Nigerian-source income are not obliged to record yearly returns. Those with taxable employment oregon concern income successful Nigeria are required to record returns. Simplified channels (e.g., TaxProMax, online TIN applications) are disposable to easiness compliance. The aforesaid regularisation applies to the opening and continued cognition of a slope relationship successful Nigeria, a TIN is not required unless specified an relationship is for concern purposes oregon receipt of income.

How tin Nigerians successful the Diasporan who necessitate a TIN get one?
For individuals, a TIN tin beryllium obtained from the Joint Tax Board via tin.jtb.gov.ng. For companies, TIN is present automatically assigned astatine the constituent of registration with the Corporate Affairs Commission. Those with existing companies without a TIN tin get 1 from the FIRS.

How are NGOs and diaspora-owned tiny concern successful Nigeria affected?

NGOs are tax-exempt if they are registered and run strictly for charitable purposes, and comply with reporting and filing requirements. Diaspora-owned SMEs successful Nigeria are treated similar section businesses, taxed connected profits but eligible for incentives and reliefs disposable to tiny ente...