Nigeria Investment Income Guide 2026

Overview — Investment Income Taxation

Investment income in Nigeria is taxed through a combination of withholding tax (WHT) applied at source and inclusion in the annual income tax return. For most passive investment income, WHT is the final tax for individuals. Companies include investment income in their taxable profits at the corporate tax rate. The tax treatment varies by type of income: dividends, interest, rental income, and capital gains each have distinct rules. The Federal Inland Revenue Service (FIRS) administers withholding taxes, while rental income falls under state PIT administration.

Dividend Taxation

Dividends paid by Nigerian companies are subject to withholding tax at 10%. For resident individual shareholders, this WHT is the final tax and no further tax is payable. The dividend is exempt from the individual's PIT computation. For resident corporate shareholders, the dividend is included in taxable income and the WHT is creditable against the company's CIT liability. Dividends received from a Nigerian company by another Nigerian company may be exempt if the receiving company holds at least 10% of the paying company's shares (substantial shareholding exemption).

Interest Income

Interest income is subject to withholding tax at 10%. For individuals, the WHT is the final tax. However, interest on Nigerian government bonds, treasury bills, and other government securities is generally exempt from WHT and income tax. This exemption makes government securities highly attractive for individual investors. Interest from savings accounts, fixed deposits, corporate bonds, and loans is subject to the standard 10% WHT. Companies receiving interest include it in taxable income with credit for WHT deducted.

Rental Income

Rental income from real estate is taxed as part of the individual's total income under the progressive PIT rates (7% to 24%). The Consolidated Relief Allowance (CRA) applies to total income including rental income. Rental expenses (maintenance, insurance, management fees, property taxes) are deductible. Withholding tax on rent varies: 10% for corporate landlords and 15% for individual landlords. The WHT is an advance payment creditable against the final PIT liability. Companies receiving rental income are taxed at the standard CIT rate.

REIT and Collective Investment Income

Distributions from Real Estate Investment Trusts (REITs) and collective investment schemes are generally exempt from tax at the investor level, provided the scheme distributes at least 90% of its income. This exemption is designed to encourage investment in collective investment vehicles. Capital gains on the disposal of REIT units may be subject to CGT. The exemption does not apply to foreign REITs or offshore investment funds.

Foreign Investment Income

Foreign-source investment income received by Nigerian residents is generally exempt from Nigerian tax under the territorial tax system. However, if the income is brought into Nigeria, it may become taxable. This creates planning opportunities for individuals with foreign investments. The FIRS has become more active in seeking to tax foreign income that is repatriated to Nigeria. Double tax treaties may provide relief from double taxation on cross-border investment income.

FAQs

Is dividend income taxable for individual shareholders?

Yes. Dividends are subject to 10% withholding tax, which is the final tax for individuals. No further income tax is payable on dividends.

Are treasury bill interest and bond interest taxable?

No. Interest on Nigerian government bonds, treasury bills, and other federal government securities is exempt from all taxes, including WHT.

How is rental income taxed for individuals?

Rental income is added to other income and taxed under the progressive PIT rates (7% to 24%). Expenses are deductible, and the CRA applies. Withholding tax on rent is an advance credit.

Disclaimer

This guide provides general information about investment income taxation in Nigeria for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Nigerian tax advisor or FIRS directly for advice specific to your situation. InvestmentKit does not provide tax advice.