Section 9 Nigeria Tax Act 2025

Section 9 of the Nigeria Tax Act 2025 is about Substitution of dividend for total profit. It provides as follows:

(1) Where a Nigerian company declares dividend out of profits on which no tax is payable due to –
(a) there being no total profits, or

(b) total profits which are less than the amount of dividend which it declared, whether or not the recipient of the dividend is a Nigerian company, the company paying the dividend shall be charged to tax at the rate prescribed in section 56 of this Act as if the dividend is the total profits of the company for the year of assessment to which the accounts, out of which the dividend is declared, relates.

(2) The provisions of subsection (1) shall not apply to –
(a) dividends declared out of the retained earnings of a company, to the extent that the profits or gains included in the retained earnings have been taxed under the provisions of this Act ;

(b) dividends declared out of profits or gains that are exempt from income tax by this Act;
(c) franked investment income as provided in this Act; or
(d) distributions made by a real estate investment company to its shareholders from rental income and dividend income received on behalf of those shareholders, whether such dividends are paid out of profits of the year in which the dividend is declared or out of profits of previous reporting periods.

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