Section 17 Nigeria Tax Act 2025

Section 17 of the Nigeria Tax Act 2025 is about Non-Resident person. It provides as follows:

(1) The income, profits or gains of a non-resident person accruing in, or derived from Nigeria are chargeable to tax in accordance with the provisions of this Act.

(2) Gains derived by a non-resident person from disposal of chargeable assets are taxable in Nigeria where the gains relate to –
(a) a trade, business, profession or vocation carried on by the non-resident person in Nigeria;
(b) any asset located in Nigeria; or
(c) any asset deemed to be located in Nigeria under this Act.

(3) Profits derived from any trade, business, profession or vocation carried on by a non-resident person are taxable in Nigeria where –
(a) the person has a permanent establishment or significant economic presence in Nigeria to the extent that the profit is attributable to the permanent establishment or significant economic presence;

(b) payment is made by a person resident in Nigeria or a permanent establishment of a non-resident person in Nigeria, in respect of services furnished from outside of Nigeria to a resident of Nigeria or a Nigerian permanent establishment of a non-resident person, except where the payment is made –
(i) to an employee of the person making the payment under a contract of employment,
(ii) by an individual for teaching in an educational institution or for teaching by an educational institution, or
(iii) by a foreign permanent establishment of a Nigerian resident and the expense is borne by that permanent establishment; or
(c) payment is made to that person by a person resident in Nigeria or a Nigerian permanent establishment of a non-resident person, in respect of insurance premiums or risks insured from the territory of Nigeria.

(4) Any amount deducted at source in accordance with section 51 of Nigeria Tax Administration Act, 2025 from the payments made for any of the activities mentioned in subsection (3) (b) and (c), shall be the final tax on that payment unless the person has a permanent establishment or significant economic presence in Nigeria to which the payment is attributable.

(5) The income, profits or gains of a non-resident person that are attributable to its permanent establishment in Nigeria shall be ascertained in accordance with the provisions of this Act, subject to the following conditions –
(a) the permanent establishment shall be deemed to have the same credit rating as the non-resident company of which it is a permanent establishment;

(b) the permanent establishment shall be deemed to have such equity and loan capital as it could reasonably be expected to have in accordance with section 191 of this Act ;

(c) the taxable profits to be attributed to the permanent establishment shall include income arising from the –
(i) sale of goods or merchandise of the same or similar kind as those sold through that permanent establishment, made directly to Nigeria by the non-resident person or its connected persons, and
(ii) furnishing of services or any other business activity carried on in Nigeria by the non-resident or its connected persons of the same or similar kind as those effected through the permanent establishment;

(d) deduction shall not be made in respect of any cost except it was incurred for and in the production of the taxable profits attributable to the permanent establishment; and

(e) deduction shall not be allowed in respect of amounts paid or payable, by the permanent establishment to the non-resident person or any of its connected persons, by way of royalties, fees or similar payments in return for the use of patents or other rights, other than towards reimbursement of actual expenses.

(6) Where the total profits attributable to a permanent establishment or significant economic presence in Nigeria cannot be ascertained in accordance with subsection (5), the total profits shall be the amount resulting from applying the profit margin of the non-resident person to the total income generated from Nigeria.

(7) Where the total profits attributable to the permanent establishment or significant economic presence in Nigeria is lower than an amount resulting from applying the profit margin of the non-resident person to the total income generated from Nigeria, the total profits shall be the amount resulting from applying the profit margin of the non-resident person to the total income generated from Nigeria.

(8) Notwithstanding the provisions of subsections (6) and (7), the tax payable under this section shall not be less than the tax withheld at source under Nigeria Tax Administration Act, 2025, and where the income is not liable to a deduction of tax under Nigeria Tax Administration Act, 2025, 4% of the total income generated from Nigeria.

(9) For the purposes of this section –
(a) a non-resident person is deemed to have a permanent establishment in Nigeria where the person –
(i) has a place, in Nigeria, through which its business is wholly or partly carried on or at its disposal for the purposes of its business,