Third Schedule: Deductible interest
Schedule 3 to the Nigeria Tax Act 2025, as published in the Official Gazette.
Referred to in Sections 20(1)(a) and 91.
Referred to in Sections 20(1)(a) and 91.
1. Notwithstanding any provisions of Chapter Two of this Act, where a Nigerian company or permanent establishment of a non-resident company in Nigeria, incurs any expenditure by way of interest or of similar nature in respect of debt issued by a connected person, the excess interest thereon shall be a disallowable deduction for the purpose of Chapter Two of this Act.
2. For the purposes of paragraph (1) of this Schedule, the excess interest shall mean an amount of total interest paid or payable to a connected person in excess of 30% of earnings before interest, taxes, depreciation and amortisation of the Nigerian company in that accounting period.
3. Nothing contained in paragraph (1) of this Schedule shall apply to a Nigerian subsidiary of a foreign company which is engaged in the business of banking or insurance.
4. Where for any assessment year, the interest expenditure is not wholly deducted against income, the interest expenditure that has not been deducted, shall be carried forward to the following assessment year or assessment years, and it shall be allowed as a deduction against the profits, if any, of any business carried on by it and assessable for that assessment year to the extent permitted in accordance with paragraph (2) of this Schedule :
All Schedules
- First Schedule
- Second Schedule
- Third Schedule
- Fourth Schedule
- Fifth Schedule
- Sixth Schedule
- Seventh Schedule
- Eighth Schedule
- Ninth Schedule
- Tenth Schedule
- Eleventh Schedule
- Twelfth Schedule
- Thirteenth Schedule
- Fourteenth Schedule
Source: Nigeria Tax Act, 2025 (Act No. 7 of 2025), Official Gazette No. 117, Lagos, 26 June 2025. General information, not tax or legal advice.