Other Incentives, Benefits & Guarantees

(i) INCENTIVES FOR SPECIAL INVESTMENT
For the purpose of promoting identified strategic or major investment, the Commission shall, in consultation with appropriate Government agencies, negotiate specific incentive packages for the promotion of investment as the Commission may specify.

(ii) DOUBLE TAXATION AGREEMENTS
In the last few years, double taxation agreements have been entered into by Nigeria with a number of countries. These agreements are entered into with a view to affording relief from double taxation in relation to taxes imposed on profit taxable in Nigeria and any taxes of similar character imposed by the law of the country concerned.

The method of relief from double taxation under Nigeria’s tax treaties is by way of a “tax credit”. The mechanism of the tax credit is such that the tax payable in Nigeria on profits of a Nigeria Company being remitted into the country is reduced by the amount of “foreign tax” paid abroad. The converse is equally true where an overseas company receives profits from abroad. Nigeria has DTA with the following countries:

  • UK;
  • France;
  • Netherlands;
  • Belgium;
  • Pakistan;
  • Canada;
  • Czech Republic;
  • Philippines; and
  • Romania.

Negotiations are in progress at various stages with other countries like Turkey, Russia, India, and Korea.

Other countries have indicated their interest to commence negotiation of tax treaties with Nigeria. As a concession to Nigeria’s treaty partners, government has approved a lower treaty rate of 7.5 on dividends, interest, rent and royalties when paid to a bonafide beneficial owner of a treaty country.

(iii) INVESTMENT PROMOTION AND PROTECTION AGREEMENT (IPPA)
As part of additional effort to foster foreign investors’ confidence in the Nigeria economy, Government continues to enter into bilateral investment promotion and protection agreements (IPPAs) with countries that do business with Nigeria. The IPPA helps to guarantee the safety of the investment of the contracting parties in the event of war, revolution, expropriation or nationalization. It also guarantees investors the transfer of interests, dividends, profits and other incomes as well as compensation for dispossession or loss. To this end, Nigeria has concluded and signed IPPAs with:

  • France;
  • United Kingdom;
  • Netherlands;
  • Romania;
  • Switzerland;
  • Spain;
  • South Africa; etc.

Negotiations with the United States of America, Belgium, Sweden and the Russian Federation are at various stages.

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