Millions of Nigerians live and work abroad, but many maintain strong financial ties to Nigeria through property ownership, investments, business interests, and family support. A question that comes up constantly in diaspora communities is whether you still have tax obligations in Nigeria when you are no longer resident there. The short answer is: it depends on what types of income you earn from Nigeria. The long answer involves understanding Nigeria's residence-based tax system, the types of income that are taxable regardless of where you live, and the obligations that may arise under the Nigeria Tax Act 2024.
Our Diaspora Guide helps Nigerians abroad navigate the financial, legal, and administrative requirements of maintaining ties to Nigeria. For a deeper look at the recent tax reforms and how they affect both residents and non-residents, read our guide on the Nigeria Tax Act 2026 changes.
How Nigeria's Tax Residency Works
Unlike the United States, which taxes its citizens on worldwide income regardless of where they live, Nigeria uses a residence-based tax system. This means your tax obligations in Nigeria depend primarily on whether you are a tax resident, not on your citizenship or passport status.
Under the Personal Income Tax Act (PITA), you are considered a tax resident of Nigeria if you meet any of these conditions:
- You are domiciled in Nigeria (Nigeria is your permanent home)
- You reside in Nigeria for 183 days or more in any 12-month period (or any period averaging more than 183 days in each of two consecutive years)
- You serve as a diplomat or are employed in the Nigerian public service and are stationed abroad
If you are a tax resident, you are taxable on your worldwide income under Nigerian law. If you are not a tax resident, you are only taxable on income derived from or received in Nigeria.
What Counts as Nigerian-Sourced Income
Even if you have lived in Canada, the UK, the US, or anywhere else for years, the following types of income are considered Nigerian-sourced and may be subject to Nigerian tax:
Rental Income from Nigerian Property
If you own a house, flat, or commercial property in Nigeria and collect rent, that rental income is taxable in Nigeria. This applies regardless of where you reside. Rental income is taxed at progressive personal income tax rates. Your tenant or property manager should deduct withholding tax at 10% and remit it to the state internal revenue service. You are expected to file an annual tax return declaring this income.
Many diaspora Nigerians who own rental property are unaware of this obligation or assume their property manager handles it. In practice, compliance is low, but the FIRS has been intensifying enforcement efforts, including cross-referencing property ownership records with tax filings. Our salary after tax guide explains the progressive tax rates that apply to your Nigerian income.
Business Income Earned in Nigeria
If you run a business in Nigeria, either directly or through a partnership, the income from that business is Nigerian-sourced and taxable. This includes e-commerce businesses, consulting services delivered to Nigerian clients, and income from Nigerian entities where you are a partner or sole proprietor.
Investment Income
Dividends from Nigerian companies, interest on Nigerian bank deposits, and gains from selling Nigerian securities are all subject to withholding tax in Nigeria. The standard withholding tax rate on dividends is 10%, on interest is 10%, and capital gains tax on the disposal of assets (including shares and property) is 10%.
For investment income, the withholding tax is typically deducted at source, meaning the company or bank withholds the tax before paying you. As a non-resident, this withholding tax is usually your final tax obligation in Nigeria on that income.
Capital Gains from Nigerian Assets
If you sell property (land, buildings) or shares in Nigerian companies, the gain is subject to capital gains tax at 10%. This applies even if the sale proceeds are paid into a foreign bank account. The tax is on the gain, not the total sale price, so you need to establish your cost base (the amount you originally paid for the asset).
What Is NOT Taxable in Nigeria for Non-Residents
If you are not a Nigerian tax resident, the following income is generally NOT subject to Nigerian tax:
- Your foreign salary: Income earned from employment in Canada, the UK, US, Germany, or any other country is not taxable in Nigeria
- Foreign investment income: Dividends from US stocks, interest from UK bank accounts, or capital gains on foreign assets are not Nigerian-sourced
- Freelance income from foreign clients: If you provide services to non-Nigerian clients while living abroad, this income is not Nigerian-sourced
- Pension from a foreign employer: Retirement benefits from foreign employment are not taxable in Nigeria
- Money sent to Nigeria as gifts or family support: Remittances to family members are not income and are not taxable for either the sender or recipient
Double Taxation Agreements
If you earn Nigerian-sourced income while living abroad, you may face the prospect of paying tax on the same income in both Nigeria and your country of residence. Double taxation agreements (DTAs) exist to prevent this.
Nigeria has DTAs with several countries including the United Kingdom, Canada, France, South Africa, Belgium, China, the Netherlands, and others. These treaties typically allow you to claim a foreign tax credit in your country of residence for taxes paid in Nigeria, or they reduce the withholding tax rates on certain types of income.
For example, if you pay 10% withholding tax on rental income in Nigeria and you live in the UK, you can claim a credit for that Nigerian tax against your UK tax liability on the same income. This ensures you are not paying tax twice on the same earnings.
If your country of residence does not have a DTA with Nigeria (such as the United States, which currently has no tax treaty with Nigeria), you may still be able to claim a foreign tax credit under the domestic tax laws of your country of residence. Consult a tax professional in your country for specific advice.
The Nigeria Tax Act 2024 and Diaspora Implications
The Nigeria Tax Act 2024 (signed into law in 2024, with provisions taking effect through 2025-2026) introduced several changes relevant to diaspora Nigerians:
- Expanded digital economy provisions: The Act clarifies the taxation of digital services and e-commerce, which may affect diaspora Nigerians running online businesses that serve Nigerian customers
- Improved information sharing: Nigeria has signed on to the Common Reporting Standard (CRS) and Automatic Exchange of Information (AEOI) agreements, meaning financial information may be shared between Nigeria and other participating countries
- TIN requirements: Increased emphasis on Tax Identification Numbers for financial transactions in Nigeria, including property registration and large bank transactions
- Withholding tax reforms: Adjustments to withholding tax rates and compliance mechanisms that affect how non-residents are taxed on Nigerian income
Practical Steps for Diaspora Nigerians
Get a Nigerian TIN
If you have any Nigerian-sourced income, you need a Tax Identification Number. You can register through the FIRS Joint Tax Board portal online. A TIN is also required for property transactions, large bank deposits, and other financial activities in Nigeria.
File Annual Returns if Required
If you earn rental income, business income, or other assessable income in Nigeria, you should file an annual tax return with the relevant state internal revenue service (for personal income tax) or the FIRS (for companies tax). The filing deadline is typically March 31 of the following year.
Keep Records of All Nigerian Income
Maintain records of rental payments received, property management expenses, investment dividends, and any other Nigerian income. These records are essential for accurate tax filing in both Nigeria and your country of residence. Our Diaspora Guide includes checklists and resources for managing your Nigerian financial obligations from abroad.
Engage a Nigerian Tax Professional
If you have significant Nigerian assets or income, it is worth engaging a chartered accountant or tax consultant in Nigeria to handle your tax compliance. They can file returns on your behalf, ensure withholding taxes are properly credited, and advise on legitimate tax planning strategies.
Understand Your Host Country Obligations
Remember that your primary tax obligation is to the country where you are resident. Most countries require you to declare your worldwide income, including Nigerian rental income and investment returns. Failing to declare foreign income can result in penalties in your country of residence, regardless of whether you have paid tax in Nigeria.
Common Scenarios
Scenario 1: You Own Rental Property in Lagos and Live in London
Your rental income is taxable in Nigeria. Withholding tax at 10% should be deducted by your tenant or agent. You should file a Nigerian tax return. In the UK, you must also declare this rental income on your self-assessment tax return, but you can claim a foreign tax credit for the Nigerian tax paid under the UK-Nigeria DTA.
Scenario 2: You Work Remotely for a US Company and Have Nigerian Citizenship
If you live in the US and work for a US company, your income is not Nigerian-sourced and is not taxable in Nigeria. Your Nigerian citizenship alone does not create a Nigerian tax obligation on foreign-earned income.
Scenario 3: You Run an Online Business Serving Nigerian Customers from Canada
This is a grey area. If your business has no physical presence or fixed base in Nigeria, your income may not be Nigerian-sourced under traditional rules. However, the expanded digital economy provisions in the Nigeria Tax Act 2024 may create obligations depending on the nature and scale of your business. Consult a tax professional for advice specific to your situation.
Frequently Asked Questions
Does Nigeria tax its citizens on worldwide income like the US?
No. Nigeria uses a residence-based tax system. If you are not a tax resident (not in Nigeria for 183+ days per year), you are generally only taxed on Nigerian-sourced income. Your foreign salary is not subject to Nigerian personal income tax.
Do I need to pay tax on rental income from my property in Nigeria?
Yes. Rental income from Nigerian property is taxable regardless of where you live. Withholding tax at 10% should be deducted by your tenant or property manager. You should file a tax return with the relevant state internal revenue service.
What about dividends from Nigerian stocks while living abroad?
Dividends from Nigerian companies are subject to 10% withholding tax deducted at source. As a non-resident, this withholding tax is generally your final Nigerian tax obligation on that dividend income.
Can I be taxed in both Nigeria and my country of residence on the same income?
Yes, double taxation is possible. Nigeria has DTAs with several countries that provide mechanisms to claim foreign tax credits. Check if your country of residence has a DTA with Nigeria to avoid paying tax twice on the same income.
Do I need a Nigerian TIN if I live abroad?
If you have any Nigerian-sourced income, you should have a TIN. You can register online through the FIRS Joint Tax Board TIN Registration portal. A TIN is also needed for property registration and certain banking transactions in Nigeria.