One of the most significant modern provisions in the law concerns indirect transfers.
Nigeria may tax gains where:
1. A non-resident disposes of shares that result in a change in ownership of a Nigerian company.
2. More than 50% of the value of foreign shares is derived directly or indirectly from Nigerian immovable property or chargeable assets within 365 days preceding disposal.
3. Digital or incorporeal assets are beneficially owned by Nigerian residents.
Location of Assets Rules
Assets are deemed situated in Nigeria where:
1. Shares are registered in Nigeria
2. The beneficial owner is resident in Nigeria
3. The asset relates to a Nigerian permanent establishment
Goodwill relates to a business carried on in Nigeria
4. Intellectual property is registered or exercisable in Nigeria
These provisions significantly expand Nigeria’s taxing rights and affect cross-border structuring, M&A transactions, and digital investments.
Failure to assess exposure can lead to severe tax implications.
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