Calculate Withholding Tax on payments to individuals and companies in Nigeria. Covers dividends, interest, rent, professional fees, contracts, royalties, and more.
| Payment Type | Resident Co. | Resident Ind. | NR Co. | NR Ind. |
|---|---|---|---|---|
| Dividends | 10% | 10% | 10% | 10% |
| Interest | 10% | 10% | 10% | 10% |
| Rent / Hire / Lease | 10% | 10% | 10% | 10% |
| Royalties | 10% | 5% | 10% | 5% |
| Commission / Consultancy / Professional Fees | 5% | 5% | 10% | 10% |
| Supply of Goods / Materials | 2% | 2% | — | — |
| Co-location / Tower Services | 2% | 2% | 5% | 5% |
| Other Services | 2% | 2% | 5% | 5% |
| Road / Bridge / Building / Power Plant Construction | 2% | 2% | 5% | 5% |
| Other Construction Activities | 5% | 5% | 10% | 10% |
| Brokerage Fees | 5% | 5% | 10% | 10% |
Withholding Tax (WHT) in Nigeria is an advance payment of income tax that is deducted at source from payments made to individuals and companies. Governed by the Companies Income Tax Act (CITA), Personal Income Tax Act (PITA), and the WHT Regulations, it serves as a collection mechanism to ensure tax compliance and steady government revenue.
WHT rates vary depending on the type of payment and whether the recipient is a resident company, resident individual, or non-resident. The 2024 Regulations also introduced lower rates for low-margin transactions such as supply of goods, general services, telecom tower services, and specific construction contracts.
It's crucial to understand that WHT is not a final tax for Nigerian residents — it's a credit against the recipient's ultimate income tax liability. When filing annual tax returns, companies and individuals can offset WHT credits received during the year against their computed tax. If WHT exceeds the final tax, the excess is refundable (in theory, though FIRS refund processes can be slow in practice).
For non-residents without a permanent establishment in Nigeria, WHT is typically the final tax on that income. This makes treaty planning important for foreign companies receiving payments from Nigeria — DTAs with countries like the UK, Netherlands, South Africa, and others may reduce WHT rates on dividends, interest, and royalties.
The payer is legally responsible for deducting and remitting WHT to FIRS within 21 days of deduction. Failure to deduct or late remittance attracts penalties of 10% of the amount not deducted/remitted, plus interest at the Central Bank of Nigeria's lending rate. The payer must also issue a WHT credit note to the recipient as proof of deduction.
No. WHT is an advance payment of income tax, not a separate tax. For residents, it's credited against the final tax liability. For non-residents without a Nigerian permanent establishment, it's typically the final tax on that income type.
The payer (person or company making the payment) is legally responsible for deducting WHT and remitting it to FIRS. The payer must issue a credit note to the recipient and file WHT returns with FIRS.
Yes. If Nigeria has a Double Taxation Agreement with the non-resident's country, the WHT rate may be reduced. Common treaty rates are 7.5%-15% for dividends and interest. The non-resident must provide a tax residence certificate to claim the reduced rate.
WHT must be remitted to FIRS within 21 days of the date of deduction. Late remittance attracts a penalty of 10% of the amount not remitted plus interest at the CBN lending rate. The payer must also file monthly WHT returns alongside the remittance.
Yes. The 2024 Regulations exempt several transactions, including qualifying imported goods with no Nigerian taxable presence, goods manufactured by the supplier, certain fuel products, insurance premiums, and some low-value small-company deduction scenarios. Check the specific exemption before relying on a nil deduction.
The payer is legally required to issue a WHT credit note to the recipient at the time of deduction. This credit note serves as proof that tax was withheld and is needed when offsetting WHT against your annual tax liability during filing. If the payer fails to issue one, you can report this to FIRS.
Yes. The Finance Act 2023 expanded WHT to cover digital economy transactions in Nigeria. Payments to non-resident digital service providers, including software licensing, streaming platforms, and online advertising, are subject to WHT. The rate is typically 10% for non-residents unless a DTA provides a lower rate.