Section 27 Nigeria Tax Act 2025

Section 27 of the Nigeria Tax Act 2025 is about Ascertainment of total profits of companies First Schedule. It provides as follows:

(1) The total profits of a company for any year of assessment, shall
be the amount of its total assessable profits from all sources, including chargeable gains computed in accordance with Part VIII of Chapter Two, less the amount of any loss ascertained in accordance with subsection (6), and capital allowance in accordance with the provisions of Part I of the First Schedule to this Act.

(2) The capital allowance to be deducted in accordance with the provisions of Part I of the First Schedule shall be the amount relating to the qualifying capital expenditure incurred in generating the assessable profits:

Provided that where value added tax is due under this Act but not charged on an asset, or in the case of an imported item, where the applicable import duty or levy was not paid, the relevant expenditure shall not be eligible as a qualifying capital expenditure.

(3) Where the qualifying capital expenditure is in relation to an asset that is only partly utilised in generating the assessable profits, the capital allowance on such qualifying capital expenditure shall be prorated and only the portion relating to the taxable income shall be allowed as a deduction.

(4) The capital allowance computed shall not be prorated where the non-taxable income constitutes less than 10% of the total income of the company.

(5) Notwithstanding the provisions of subsection (4), the portion of capital allowance attributable to priority activities of a company that enjoys economic
development incentive under this Act shall be deducted only from the assessable profits of the priority business:

Provided that –
(a) in no circumstances shall the aggregate loss deductions from the assessable profits or income exceed the amount of that loss;
(b) loss can only be deducted from the trade or business in which the loss was incurred ;

(c) the loss shall be deducted to the extent possible from the amount of the assessable profits of the first year of assessment after that in which the loss was incurred, and in subsequent years until the loss is fully recouped; and
(d) the loss incurred during any year of assessment shall be computed, in accordance with the basis period provided in sections 22 to 25 of this Act.

(6) Notwithstanding subsection (5) or any provision of this Act, any loss incurred in any period from sales, disposal or any other transaction in digital assets shall only be deductible in determining the profits from the business relating to digital or virtual assets.

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