Withholding Tax in Nigeria: Rates, Rules and Remittance

A plain guide to withholding tax: who deducts it, the rates, when it is final and how to remit it.

Based on the Nigeria Tax Administration Act 2025, the 2024 Withholding Regulations and the Nigeria Tax Act 2025.

In 30 seconds

Withholding tax (WHT) is tax that a payer deducts from a payment and sends to the tax authority. For the recipient it is usually an advance payment of income tax. In some cases it is the final tax.

The Nigeria Tax Administration Act (NTAA) requires the deduction. The rates are set by regulations, and the 2024 Withholding Regulations are the rate table now in use.

Rates may change. In September 2026 the Government set up a committee to review the 2024 Regulations and prepare revised withholding tax regulations. Check the Nigeria Revenue Service (NRS) site for the current table before you deduct.

2%Goods and most services, resident

5%Professional fees and commission, resident

10%Dividends, interest, rent

21stUsual remittance date, next month

What withholding tax is

Where a payment is made to a person, the payer must deduct tax when the payment is made or settled. The rate is the one prescribed in the deduction-at-source regulations (NTAA section 51).

The payer is a collection agent. The tax belongs to the recipient. It is paid to the authority on the recipient's behalf.

Which section number? The NTA cross-refers to the deduction rule as section 50 of the NTAA in section 17(4) and as section 51 in section 28(2)(b)(iv). The gazetted NTAA puts Deduction at source at section 51. Section 50 is Payment of tax.

Withholding tax rates in Nigeria: the WHT rate table

The First Schedule to the Regulations lists the transactions and rates. These are the main ones for corporate recipients.

Payment	Resident	Non-resident
Dividends and interest	10%	10%
Rent, hire or lease	10%	10%
Royalties	10%	10%
Commission, consultancy, technical, management and professional fees	5%	10%
Brokerage fees	5%	10%
Supply of goods or materials, other than by the manufacturer or producer	2%	Not applicable
Services not listed elsewhere	2%	5%
Co-location and telecommunication tower services	2%	5%
Construction of roads, bridges, buildings and power plants	2%	5%
Other construction	5%	10%

Individuals as recipients have a few different rates. Royalties are 5%. Directors' fees are 15% for a resident and 20% for a non-resident.

The Regulations also double the rate where the recipient has no Tax Identification Number. Law firms describe this as applying to non-passive income such as services.

The table is drawn from published summaries of the Regulations by Nigerian and international firms. It is not a substitute for the Schedule itself.

Withholding tax on rent

Rent, hire and lease payments carry a 10% withholding tax under the 2024 Regulations. The tenant or lessee deducts it from the rent and pays it to the tax authority on the landlord's behalf.

The landlord receives a credit note. The landlord then claims it against income tax for the year.

When withholding is the final tax

Usually the recipient credits the tax against its income tax. In some cases the deduction is the end of the matter.

Non-residents: tax withheld from payments for services and insurance from Nigeria is the final tax, unless the person has a permanent establishment or significant economic presence in Nigeria (section 17(4)).
Dividends to non-residents: no further tax is charged beyond the tax deducted at source (section 19(1)).
Some individual income: income on which the deduction is final is taken out of total income (section 28(2)(b)(iv)).

The NTAA also treats deduction at source on some other payments as final. These include payments to non-resident entertainers and sportspersons, and a 5% deduction on non-resident service income from a labelled startup.

Remitting and receipts

Time to remit: by the 21st of the month after deduction, according to the NRS tax calendar.
Receipts: the payer should give the recipient a receipt or credit note. The recipient needs it to claim the credit.
Schedule: deductions are reported with the payer's returns.

WHT credit notes and refunds

A credit note proves that tax was withheld from your payment. You offset it against your income tax.

The NRS refund guidelines set the rules for any excess or unused credit.

Claim within six years after the end of the year of assessment.
Attach the WHT schedule, the payment receipt where one applies, and the original credit notes.
Withholding tax remitted at more than the statutory rate is eligible for a refund.
The NRS settles an approved non-VAT refund within 90 days of the decision, or sets it off against other tax.

Source: NRS Information Circular 2026/17.

Other withholding in the NTA

Loss of office pay: the person who pays compensation for loss of office must deduct and remit the tax due. The tax is remitted within the time in the PAYE or deduction-at-source regulations (section 50(3) and (4)).
Dividends between companies: a Nigerian company's dividend income is included gross of tax deducted at source (section 8(1)).

Withholding VAT

VAT can also be withheld. Government bodies, and anyone the NRS appoints, must withhold VAT on supplies made to them and remit it (section 154). The NTA says remittance is due by the 14th day of the month after the transaction, or as the Service prescribes.

When a non-resident supplies a Nigerian taxable person, the Nigerian business may have to withhold the VAT (section 150(2)). The NRS issued guidelines on withholding VAT in 2026. See the VAT guide.

Penalties for not deducting or not remitting

NRS guidance summarises the Administration Act's penalties as follows. Confirm them with the NRS before you rely on them.

Failing to deduct: 40% of the amount not deducted.
Failing to remit tax deducted: 10% a year, plus interest at the Central Bank's Monetary Policy Rate on the amount not remitted.

What changed

The deduction duty now sits in the NTAA, and the NTA cross-refers to it.
The 2024 Regulations replaced the 1997 withholding tax regulations.
Revised regulations are under review, so rates may change.

Common mistakes

Using old 1997 rates instead of the 2024 table.
Not collecting a Tax Identification Number from the supplier, which doubles the rate.
Treating non-resident withholding as creditable when it is final.
Confusing withholding VAT with withholding income tax. They are separate.
Paying late, or without giving the recipient a receipt.

Frequently asked questions

What are the withholding tax rates in Nigeria in 2026?

Under the 2024 Regulations the main rates are 10% on dividends, interest and rent, 5% on professional fees and commission, and 2% on goods and most services for residents. Rates for non-residents are higher for some items. Revised regulations are under review.

Is withholding tax a final tax?

Usually not. It is an advance payment the recipient credits against income tax. It is final for some non-resident payments (section 17(4)) and some other items.

When is withholding tax due?

By the 21st of the month after deduction, according to the NRS tax calendar.

What happens if the supplier has no TIN?

The 2024 Regulations double the rate where the recipient has no Tax Identification Number, mainly for non-passive income such as services.

Which law requires withholding tax?

The Nigeria Tax Administration Act, section 51, requires the deduction. The regulations set the rates.

Is VAT also withheld?

Yes, in some cases. Government bodies and appointed agents withhold VAT on supplies to them (section 154). A Nigerian recipient may withhold VAT on a non-resident supplier (section 150).

What is the withholding tax on rent in Nigeria?

10% under the 2024 Regulations. The tenant or lessee deducts it and remits it on the landlord's behalf. The landlord gets a credit note.

How do I claim a withholding tax refund?

Apply to the NRS within six years after the year of assessment. Attach the WHT schedule, the receipt where applicable, and the original credit notes. Tax withheld above the statutory rate qualifies.

What is the penalty for not deducting withholding tax?

NRS guidance reports 40% of the amount not deducted. Failing to remit what was deducted carries 10% a year plus interest at the Central Bank rate.

Related guides

Study this in the ICAN notes

These free ICAN exam notes cover the same topic, with worked examples and past-question practice.

The sections, word for word

These are the sections this guide relies on, as published in the Official Gazette. Open any one to read it.

Section 17 Non-resident person

(1)The income, profits or gains of a non-resident person accruing in, or derived from Nigeria are chargeable to tax in accordance with the provisions of this Act.
(2)Gains derived by a non-resident person from disposal of chargeable assets are taxable in Nigeria where the gains relate to –
(a)a trade, business, profession or vocation carried on by the non-resident person in Nigeria ;
(b)any asset located in Nigeria ; or
(c)any asset deemed to be located in Nigeria under this Act.
(3)Profits derived from any trade, business, profession or vocation carried on by a non-resident person are taxable in Nigeria where —
(a)the person has a permanent establishment or significant economic presence in Nigeria to the extent that the profit is attributable to the permanent establishment or significant economic presence ;
(b)payment is made by a person resident in Nigeria or a permanent establishment of a non-resident person in Nigeria, in respect of services furnished from outside of Nigeria to a resident of Nigeria or a Nigerian permanent establishment of a non-resident person, except where the payment is made —
(i)to an employee of the person making the payment under a contract of employment,
(ii)by an individual for teaching in an educational institution or for teaching by an educational institution, or
(iii)by a foreign permanent establishment of a Nigerian resident and the expense is borne by that permanent establishment ;
(c)payment is made to that person by a person resident in Nigeria or a Nigerian permanent establishment of a non-resident person, in respect of insurance premiums or risks insured from the territory of Nigeria.
(4)Any amount deducted at source in line with section 50 of Nigeria Tax Administration Act from the payments made for any of the activities mentioned in subsection (3) (b) and (c) of this section, shall be the final tax on that payment unless the person has a permanent establishment or significant economic presence in Nigeria to which the payment is attributable.
(5)The income, profits or gains of a non-resident person that are attributable to its permanent establishment in Nigeria shall be ascertained in accordance with the provisions of this Act, subject to the following conditions —
(a)the permanent establishment shall be deemed to have the same credit rating as the non-resident company of which it is a permanent establishment;
(b)the permanent establishment shall be deemed to have such equity and loan capital as it could reasonably be expected to have in line with section 191 of this Act ;
(c)the taxable profits to be attributed to the permanent establishment shall include income arising from the —
(i)sale of goods or merchandise of the same or similar kind as those sold through that permanent establishment, made directly to Nigeria by the non-resident person or its connected persons, and
(ii)furnishing of services or any other business activity carried on in Nigeria by the non-resident or its connected persons of the same or similar kind as those effected through the permanent establishment;
(d)deduction shall not be made in respect of any cost except it was incurred for and in the production of the taxable profits attributable to the permanent establishment ; and
(e)deduction shall not be allowed in respect of amounts paid or payable, by the permanent establishment to the non-resident person or any of its connected persons, by way of royalties, fees or similar payments in return for the use of patents or other rights, other than towards reimbursement of actual expenses.
(6)Where the total profits attributable to a permanent establishment or significant economic presence in Nigeria cannot be ascertained in accordance with subsection (5) of this section, the total profits shall be the amount resulting from applying the profit margin of the non-resident person to the total income generated from Nigeria.
(7)Where the total profits attributable to the permanent establishment or significant economic presence in Nigeria is lower than an amount resulting from applying the profit margin of the non-resident person to the total income generated from Nigeria, the total profits shall be the amount resulting from applying the profit margin of the non-resident person to the total income generated from Nigeria.
(8)Notwithstanding the provisions of subsections (6) and (7) of this section, the tax payable under this section shall not be less than the tax withheld at source under Nigeria Tax Administration Act, and where the income is not liable to a deduction of tax under Nigeria Tax Administration Act, 4% of the total income generated from Nigeria.
(9)For the purposes of this section —
(a)a non-resident person is deemed to have a permanent establishment in Nigeria where the person —
(i)has a place, in Nigeria, through which its business is wholly or partly carried on or at its disposal for the purposes of its business,
(ii)operates a trade or business through a person in Nigeria authorised to conduct on its behalf, or on behalf of some other persons controlled by it, or which have a controlling interest in it,
(iii)maintains a stock of goods or merchandise in Nigeria from which deliveries are made by a person on its behalf,
(iv)solely or together with any other person, executes a project in Nigeria involving surveys, designs, deliveries, building, construction, assembly or installation, commissioning or decommissioning or any supervisory activity in connection with those activities, irrespective of any split or number of entities that performed any of the activities of the project and whether or not only part of the project was carried out in or outside Nigeria, or
(v)furnishes any service in Nigeria through employees, agents, subcontractors or other persons engaged by it for such purpose ;
(b)a non-resident person shall, subject to any regulations that may be issued by the Minister to that effect, have a significant economic presence in Nigeria where the person transmits, emits or sends by itself or through other person, signals, sounds, messages, images or data of any kind by cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity, including electronic commerce, application store, high frequency trading, electronic data storage, online adverts, participative network platform, online payments, supply of userdata, search engines, digital content services, online gaming, cloud computing, online teaching services, and so on, and profit can be attributable to such activity ;
(c)a non-resident person shall not be deemed to have a permanent establishment or significant economic presence in Nigeria solely by reason of employing persons resident in Nigeria, to the extent that the duties of such employment are not performed primarily for customers in Nigeria ;
(d)"a place" means any location in Nigeria, whether owned, rented, leased or otherwise available for the use of the person, irrespective of the length of time it is used and shall include —
(i)a place of management,
(ii)a branch,
(iii)a sales outlet,
(iv)an office,
(v)a factory,
(vi)a workshop,
(vii)a mine, a well for crude oil, gas, bitumen, water or any other natural resource, a quarry or any other place of extraction or exploitation of natural resources, or any supervisory activity in connection thereto,
(viii)facilities, including vessel, any installation or structure, used in the exploration of natural resources, or any supervisory activity in connection with such facilities,
(ix)a building, construction, assembly or installation site, or
(x)any place for performing supervisory activity or any service or activity ;
(e)"profit margin" of a person shall be the proportion of the earnings before interest and tax (EBIT) to income or revenue in its published audited financial statement, and in the case of persons that have no published financial statements for the period or are not required to publish financial statements, the profit margin as may be ascertained by the relevant tax authority from the published financial statements of a comparable company.
Open section 17 on its own page

Section 19 Nigerian dividends received by non-resident persons

(1)

There shall be no further tax charged in respect of any dividend received by a non-resident from a Nigerian company other than tax deducted at source under the Nigeria Tax Administration Act.

(2)

Nothing in this Act shall confer on the non-resident or the Nigerian company paying the dividend, a right to repayment of tax paid under section 50 of the Nigeria Tax Administration Act.

Open section 19 on its own page

Section 50 Personal injury

(1)

Sums not exceeding N50,000,000 obtained by way of compensation or damages for any wrong or injury suffered by an individual in his person or in his profession or vocation, including compensation for loss of office or employment, wrong or injury for libel, slander or enticement shall not be chargeable gains.

(2)

Where the sum exceeds N50,000,000, only the excess amount shall constitute a chargeable gain.

(3)

For the purposes of subsection (1) and (2) of this section, any person who pays compensation for loss of office or employment to an individual is required, at the point of payment of such compensation, to deduct and remit the tax due under this section to the relevant tax authority.

(4)

The tax so deducted shall be remitted within the time specified under the Pay-As-You-Earn or Deduction of Tax at Source Regulations issued the Nigeria Tax Administration Act.

Open section 50 on its own page

Section 150 Taxable supply of non-residents

(1)A non-resident person who makes taxable supplies to Nigeria shall register for tax and include VAT on its invoice for all taxable supplies.
(2)Where a non-resident person is making taxable supplies from outside Nigeria to persons in Nigeria, the taxable person to whom the supply is made in Nigeria shall withhold the VAT due on the supply and remit it to the Service.
(3)The Service may, by notice, appoint any person, including a non-resident supplier of taxable supplies, to collect the VAT and remit it to the Service.
(4)Where a person appointed under subsection (3) has made a taxable supply to a taxable person in Nigeria, the taxable person shall not have the obligation to withhold the VAT, except where the person appointed has failed to collect the VAT.
(5)Where a person appointed under subsection (3) does not process payments in respect of the supplies but receives commission relating to the supplies, the appointed person shall use the mechanism with which it collects its commission to collect the VAT.
(6)A non-resident person that makes a taxable supply to a person in Nigeria may appoint a representative for the purpose of compliance with its VAT obligations.
(7)The Service may issue guidelines for the purpose of giving effect to the provisions of this section, including the form, time and procedure for filing returns and payment by non-resident suppliers appointed by the Service under subsection (3).
(8)Where taxable goods are imported into Nigeria through an online electronic or digital platform operated by a non-resident supplier and VAT has been collected by the Service or any person appointed by the Service, the goods shall not be further subjected to VAT before clearing upon provision of proof of payment of the VAT.
Open section 150 on its own page

Section 154 Collection of VAT by persons other than the supplier

(1)Without prejudice to any provision of this Act or any other tax law, the following persons shall collect or withhold VAT on taxable supplies made to them and remit it to the Service within the time prescribed by this Act, the Nigeria Tax Administration Act, or any regulation made pursuant thereto —
(a)Federal, State, Local Government and their respective Ministries, Departments or Agencies; or
(b)any other person appointed by the Service to collect or withhold VAT for the purposes of this Part.
(2)The Service may direct a taxable person to whom taxable supplies is made in Nigeria and issued an invoice on which VAT is not included, to self-account for the VAT payable and remit it to the Service.
(3)The remission of the VAT under subsections (1) and (2) of this section, shall be accompanied with a schedule showing the name, Tax ID and address of the contractor or supplier, invoice number, gross amount of invoice, amount of the VAT and the month to which the return relates.
(4)The VAT collected, withheld or self-accounted under this section shall be remitted to the Service on or before the 14th day of the month immediately following the month of the transaction or as may be prescribed by the Service.
(5)A person having an obligation to collect VAT under Chapter Six of this Act shall keep proper records, make appropriate returns and remittances, and all provisions relating to compliance obligation in Chapter Six of this Act, the Nigeria Tax Administration Act or related tax laws shall apply to such person as though it is the taxable person.
Open section 154 on its own page

Official NRS sources

Rates come from the Deduction of Tax at Source (Withholding) Regulations 2024 as published by law and accounting firms; refund rules are from NRS Information Circular 2026/17. Source for the Act: Nigeria Tax Act, 2025 (Act No. 7 of 2025), Official Gazette No. 117, Lagos, 26 June 2025. General information, not tax or legal advice.

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