Under 2026 tax law, Nigerians abroad aren’t taxed on foreign income; only Nigerian-source income is taxable
The 2026 Nigerian tax reforms have clarified concerns about whether Nigerians living abroad could be taxed twice on their income.
Key clarifications from the Presidential Fiscal Policy and Tax Reforms Committee:
1. Non-resident Nigerians are not taxed on foreign income. Income earned abroad without Nigerian ties is exempt.
2. Remittances, gifts, and personal transfers remain untaxed, preserving the flow of funds from diaspora Nigerians to families and communities.
3. Tax applies only to Nigerian-source income, including rental income, dividends from Nigerian companies, or local business profits.
4. Remote work for Nigerian companies may be taxable if income is derived from Nigeria.
5. Residency is determined by the 183-day rule, not citizenship. Non-residents are taxed only on Nigerian-source income.
6. Dual citizenship does not affect tax liability.
7. Double Taxation Agreements (DTAs) with countries like Canada, UK, France, South Africa, and others prevent the same income from being taxed in two jurisdictions.
8. Unilateral relief provisions apply where no treaty exists, protecting Nigerians abroad from double taxation.
9. Income already taxed abroad may claim relief under Nigerian law within the allowed timeframe.
10. Collective investment schemes are taxed at the scheme level; distributions are treated as dividends for unit holders.
The Nigeria Revenue Service (NRS) emphasizes that only income generated or derived in Nigeria is subject to tax. Transfers home, such as support for family, school fees, or community projects, do not create a tax liability.
This framework aligns Nigeria with international best practices, reducing uncertainty and reassuring diaspora Nigerians that their contributions to Nigeria are protected from unnecessary taxation.
