Nigeria Tax Act 2026: What Changes for Chinese Companies and Employees

Nigeria’s new Nigeria Tax Act 2025 took effect on 1 January 2026, and on the same day the Federal Inland Revenue Service (FIRS) was replaced by the Nigeria Revenue Service (NRS). For Chinese companies, company income tax stays at 30% and VAT stays at 7.5%, but there is a new 4% development levy and a 15% minimum effective tax rate for large groups. For Chinese employees, personal income tax now runs in six bands from 0% to 25%, with the first ₦800,000 tax-free.

The China–Nigeria double tax agreement has been in force since 21 March 2009 and caps withholding tax on dividends, interest and royalties at 7.5%. This guide puts the numbers you will actually use in one place: company taxes, employee taxes, the treaty and a practical checklist.

Key points

• The Nigeria Tax Act and three companion acts were signed on 26 June 2025 and apply from 1 January 2026.
• The NRS replaced FIRS on 1 January 2026 as the single federal revenue authority; its chairman is Zacch Adedeji.
• Company income tax: 30% for large companies; 0% for small companies with turnover of ₦100m or less and fixed assets of ₦250m or less.
• A new 4% development levy on assessable profits replaces several older levies.
• VAT remains 7.5%. Personal income tax runs from 0% to 25%, with rent relief of 20% of rent capped at ₦500,000.
• Under the China–Nigeria treaty, dividends, interest and royalties are subject to 7.5% withholding tax instead of the usual 10%.

What changed: four reform acts and the NRS

On 26 June 2025 the President signed four tax reform laws. The main one, the Nigeria Tax Act 2025, consolidates rules that used to sit in separate statutes for company income tax, personal income tax, VAT and other taxes. A companion act set up the Nigeria Revenue Service. The new regime applies from 1 January 2026.

FIRS formally became the NRS on that date. The government describes the change as a structural redesign rather than a rebrand: federal taxes are now collected and reported through one authority. In practice, your existing Tax Identification Number (TIN) and filing obligations continue, but the agency name, and over time some portals and processes, change. Check the NRS website for system migration notices.

Chinese companies: CIT, development levy and VAT

Company income tax

According to PwC’s Nigeria tax summary, companies with gross turnover above ₦100 million or fixed assets above ₦250 million pay 30% company income tax. Small companies, meaning turnover of ₦100 million or less and fixed assets of no more than ₦250 million, pay 0%, but companies providing professional services cannot use the small-company rate. Capital gains of companies are now taxed at the CIT rate.

The law also introduces a 15% minimum effective tax rate. Large Nigerian companies above the turnover threshold, and members of multinational groups with global turnover of at least €750 million, must top up their tax if their effective rate falls below 15%. Many Chinese contractors and manufacturers in Nigeria belong to state-owned or listed groups, so check at group level whether you are caught.

The 4% development levy

The development levy is 4% of assessable profits. It replaces the tertiary education tax (3%), the NITDA IT levy (1%), the NASENI levy and the Police Trust Fund levy. Small companies and non-resident companies do not pay it.

VAT

VAT stays at 7.5%. Basic food, medical products and education are zero-rated. E-invoicing is now part of the law, and the rules for claiming input VAT have been updated. Traders and importers should confirm their invoicing systems meet NRS requirements.

Non-resident companies and free zone enterprises

A non-resident company with Nigerian-source income now has a minimum tax equal to the withholding tax deducted, or 4% of Nigerian-source income where nothing was withheld. Free zone enterprises keep their exemptions, but if more than 25% of sales go into the Nigerian domestic market, that portion is fully taxable. Our guide to Nigeria’s free trade zones, including Lekki and Ogun–Guangdong covers this in detail, and our company registration guide for foreign investors covers CAC, NIPC and tax registration.

Chinese employees: the new personal income tax bands

Personal income tax is now charged on annual taxable income in six progressive bands:

Worked from the table: taxable income of ₦6 million gives tax of about ₦870,000, an average rate of roughly 14.5%. Taxable income of ₦24 million gives about ₦4.47 million, roughly 18.6%. Your real bill also depends on statutory deductions such as pension contributions and on rent relief (20% of annual rent, capped at ₦500,000). Employees earning only the national minimum wage (₦70,000 a month) no longer pay tax.

Are you a Nigerian tax resident?

Under the new rules you are tax resident if any one test applies: you have a domicile, permanent home or habitual abode in Nigeria, you are present for 183 days or more in any 12-month period, or you have substantial economic or immediate family ties in Nigeria. Staff on an STR visa and CERPAC working on a project for months are usually resident and taxed on worldwide income, with credit for tax already paid in China. See our STR visa and CERPAC residence permit guide for the immigration side.

Employers withhold tax monthly through PAYE. Many Chinese firms pay part of the salary in China and part locally. If the employee works in Nigeria and is a Nigerian tax resident, both parts are in principle reportable, so have your finance team review this with a local adviser.

Using the China–Nigeria tax treaty

The China–Nigeria double tax agreement was signed on 15 April 2002, entered into force on 21 March 2009 and has applied since 1 January 2010. Per PwC’s treaty table, dividends, interest and royalties paid by a Nigerian company to a Chinese tax resident are subject to 7.5% withholding tax, and technical fees to 10%. Without a treaty, withholding on dividends and interest is generally 10%.

To claim the treaty rate, the payer will usually ask for a Chinese Tax Resident Certificate (中国税收居民身份证明) from your local Chinese tax bureau. Note that Hong Kong and Nigeria signed a separate treaty on 13 July 2026, but it was not yet in force when we checked, so Hong Kong holding companies cannot use it yet. For the foreign exchange side of sending profits home, read our naira exchange rate and repatriation guide.

Practical checklist

1. Check whether your company is still “small”: both the turnover and fixed-asset tests must be met, and professional services are excluded.
2. Model whether the 4% development levy and the 15% minimum effective tax rate apply, especially for group subsidiaries.
3. Update payroll to the new PAYE bands and collect tenancy agreements so staff can claim rent relief.
4. Make sure your invoicing system meets the e-invoicing rules.
5. Get a Chinese Tax Resident Certificate before making cross-border payments, to use the 7.5% treaty rate.
6. Plan employee tax residence together with work permits; see our Expatriate Quota guide.

Regulations, filing deadlines and transition rules are still being published, so always check the latest NRS notices. More topics are on our Nigeria tax hub.

Sources

• PwC Nigeria: The Nigerian Tax Reform Acts
• EY: Nigeria Tax Act, 2025 has been signed – highlights
• PwC Worldwide Tax Summaries: Nigeria corporate income tax
• PwC Worldwide Tax Summaries: Nigeria personal income tax
• PwC Worldwide Tax Summaries: Nigeria individual residence
• PwC Worldwide Tax Summaries: Nigeria withholding taxes (incl. China treaty rates)
• Proshare: FIRS formally transits to Nigeria Revenue Service
• AllAfrica: Replacement of FIRS with NRS (January 2026)
• Orbitax: China–Nigeria tax treaty
• Hong Kong SAR Government: Hong Kong and Nigeria sign tax agreement

Facts checked: 2026-10-22 · Niriliya Huaren Editorial Team · How we check facts