Does Nigeria have tax incentives?
Nigeria does not grant automatic tax credits to Nigerian companies for foreign tax on income derived from other countries. The Nigerian tax laws already provide for tax exemption for dividends, interest, and royalties. In this regard, full tax credits are usually provided for in the DTTs.
What is an example of a tax incentive?
Individual incentives Individual tax incentives are a prominent form of incentive and include deductions, exemptions, and credits. Specific examples include the mortgage interest deduction, individual retirement account, and hybrid tax credit. Another form of an individual tax incentive is the income tax incentive.
What is the purpose of tax incentive?
Tax incentives are ways of reducing taxes for businesses and individuals in exchange for specific desirable actions or investments on their parts. Their purpose is to encourage those businesses and individuals to engage in behavior that is socially responsible and/or benefits the community.
What is pioneer status incentive?
The principle of pioneer status as a tax incentive is that companies in industries designated as pioneers are relieved from paying company income tax in their formative years to enable them to make a considerable profit for re-investment into the business.
Are there any tax incentives for investing in Nigeria?
Nigeria has various tax incentives intended to encourage investment in key sectors of the economy, as follows. Pioneer companies investing in specified industrial activities may, on application, be granted a tax holiday for three years initially, which may be extended for up to two years upon satisfaction of specified conditions.
What are the tax credits available to companies in Nigeria?
An investment allowance of 10% on the cost of qualifying expenditures in respect of plant and machinery is available as a deduction from assessable profits in the year of purchase. There is no restriction to the full claim of capital allowance in any year of assessment for companies in the mining, manufacturing, and agricultural sectors.
Which is the enabling tax law in Nigeria?
After due incorporation processes with Corporate Affairs Commission (CAC), and Federal Inland Revenue Services for TIN and VAT registerations, the company begins to operate under Companies and Allied Matters Act 1990,and the enabling tax law is Companies Income Tax Act (CITA) Cap.
What is the Pioneer tax holiday in Nigeria?
Pioneer Companies: this comes under Industrial Development (Income Tax Relief) Act Cap 179 LFN 1990. This Act grants a pioneer Tax holiday for an initial period of three years, subject to further extension of two years or ones and for all 5 years tax holidays without further extension.
