Section 18 Nigeria Tax Act 2025

Section 18 of the Nigeria Tax Act 2025 is about Non-resident person engaged in shipping or air transport. It provides as follows:

(1) Where a non-resident person carries on the business of transport by sea or air, and any ship or aircraft owned, leased or chartered by it calls at any port in Nigeria, the non-resident person is chargeable to tax on the profits arising from the carriage of passengers, mails, livestock or goods shipped from, or loaded into an aircraft or ship, in Nigeria.

(2) The provisions of subsection (1) shall not apply to passengers, mails, livestock or goods which are brought into Nigeria solely for trans-shipment or for transfer from one aircraft to another or between an aircraft and a ship.

(3) For the purposes of subsection (1), where the Service is satisfied that the tax authority of the country of residence of a non-resident person computes and assesses the profits of its resident that operates ships or aircraft to Nigeria on a basis not materially different from that prescribed in this Act, the total profits or loss derived from Nigeria for that period shall be determined, using –

(a) the ratio of profits or loss of the company, before any allowance by way of depreciation, of an accounting period to the gross revenue in respect of carriage of passengers, mails, livestock or goods (global adjusted profit ratio); and

(b) ratio of allowances by way of depreciation for that period to the gross revenue by the company in respect of carriage of passengers, mails,
livestock or goods (global depreciation ratio).

(4) For the purposes of subsection (3), the total profits of a period shall be taken to be the proportion to the gross revenue in respect of the carriage of passengers, mails, livestock or goods shipped or loaded in Nigeria, which is determined by applying the –
(a) global adjusted profit ratio to the gross revenue in respect of the
carriage of passengers, mails, livestock or goods shipped or loaded in Nigeria to arrive at the assessable profits; and

(b) global depreciation ratio to the gross revenue in respect of the carriage of passengers, mails, livestock or goods shipped or loaded in Nigeria, in place of any allowances to be given under the provisions of Part I of the First Schedule.

(5) Where at the time of assessment, the provisions of subsections (3) and (4) cannot for any reason be satisfactorily applied, the total profits shall be

(a) the amount resulting from multiplying the turnover generated from Nigeria by the profit margin as defined under section 17(9)(e) of this Act; or
(b) the profits deemed to be derived from Nigeria, which, on the direction of the Service, shall be computed on a fair percentage of the gross revenue in respect of the carriage of passengers, mails, livestock and goods shipped from or loaded in Nigeria.

(6) For the purposes of this section, the tax payable by a person for any year of assessment shall not be less than 2% of the gross revenue in respect of the carriage of passengers, mails, livestock or goods shipped from, or loaded into an aircraft in Nigeria, which shall be computed, assessed and paid on monthly basis.

(7) Notwithstanding any other provision of this Act, where a person to which this section applies files a tax return and does not provide a separate financial statement of the Nigerian operations, such person shall submit detailed gross revenue statements of its Nigerian operations, certified by one of its directors and its external auditors, and supported with the contract agreements.

(8) The provisions of this section shall not apply to income or profits arising from leasing of vessels or containers, non-freight operations or any other incidental income, such income or profits are chargeable to tax under relevant provisions of this Act.

(9) Regulatory agencies in the shipping and air transport, and other relevant sectors shall, as a condition to carry on business in Nigeria or obtaining any relevant approvals or permits, mandate all persons taxable under the provisions of this section to present the following –

(a) evidence of income tax filing for the preceding tax year;