Nigeria: Living There - Tax Issues
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Living There
Residents are taxed on their worldwide income.
Tax is withheld at a flat rate of 10% of the rental income from leasing out real properties,. Rental income derived from real properties located outside Nigeria is exempt from tax, so long as that income is convertible into Nigerian currency and is deposited or paid into a bank approved by the Nigerian government.
Tax is levied at progressive rates on income derived from sources other than leasing out real property, i.e. from employment. Residents enjoy certain personal tax reliefs by deducting the following allowances from gross income:
PERSONAL ALLOWANCES & RELIEFS |
|
| TAXABLE INCOME, PHP (US$) | MARGINAL TAX RATE |
| Personal Allowance | NGN5,000 (US$38) plus 20% of gross income |
| Children Allowance | NGN2,500 (US$19) per child (Limited to 4 children) |
| Dependent Relative Allowance | NGN2,000 (US$38) (max for 2) |
| Life Assurance Relief (LAR) | Actual amount paid (maximum) |
| Alimony | NGN 3,000 (US$23) (maximum) |
| Disabled person allowance | 20% of gross income or NGN3,000, whichever is higher |
| Source: Global Property Guide | |
Net income is then subject to the following progressive tax rates:
INCOME TAX |
|
| TAXABLE INCOME, NGN (US$) | MARGINAL TAX RATE |
| Up to 30,000 (US$229) | 5% |
| 30,001 – 60,000 (US$457) | 10% on band over US$226 |
| 60,001 – 110,000 (US$838) | 60,001 – 110,000 (US$838) |
| 110,001 – 160,000 (US$1,219) | 20% on band over US$838 |
| Over 160,000 (US$1,219) | 25% on all income over US$1,219 |
| Source: Global Property Guide | |
Capital Gains Tax
Residents are exempt from paying capital gains tax from the disposal of their only or main residential property.
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