Nigeria’s 2026 tax law introduced major reliefs for small companies, while also clearly defining how company income tax, dividends, and director payments are taxed.
This guide explains company taxation in Nigeria (2026) in clear, practical terms — whether you run a small company, growing SME, or large business.
What Is a Company Under Nigerian Tax Law?
A company refers to:
- Limited Liability Companies (Ltd)
- Private and public companies
- Companies registered with CAC (RC number)
Companies are taxed separately from their owners.
Small Companies: 0% Company Income Tax (VERY IMPORTANT)
Under the 2026 tax law, a company qualifies as small if it has:
- ₦50 million or less annual turnover, AND
- ₦250 million or less in total assets
If you qualify:
- 0% Company Income Tax
- 0% Capital Gains Tax
- No Development Levy
However, you must still:
- Register properly
- File annual returns
- Keep records
Many small companies qualify for this relief but don’t claim it.
👉 Taxify helps you confirm eligibility and file correctly.
Companies That Do NOT Qualify as Small
If your company exceeds the small company thresholds:
- Company Income Tax = 30% of profit
Example:
- Company profit: ₦20,000,000
- Company tax: 30% = ₦6,000,000
Tax is charged on profit, not turnover.
Paying tax on revenue instead of profit is a costly mistake.
Let Taxify review your company tax computation.
Professional Services Companies (Special Rule)
Companies providing professional services are taxed regardless of size.
Professional services include:
- Consulting
- Accounting, audit & tax
- Legal services
- IT & software services
- Engineering
- Training & advisory services
- Medical and healthcare services
Even if turnover is below ₦50 million, company tax still applies.
Paying Yourself From a Company
Option 1: Salary
- Treated as personal income
- Taxed under PAYE
- Deductible expense for the company
Option 2: Dividends
- Subject to 10% withholding tax
- No additional personal income tax after WHT
Example:
- Dividend declared: ₦5,000,000
- Withholding tax (10%): ₦500,000
- You receive: ₦4,500,000
Global Minimum Tax (Large Companies Only)
Applies if a company:
- Is part of a multinational group, OR
- Has ₦20 billion or more turnover, AND
- Pays less than 15% effective tax
Such companies must pay additional tax to reach the 15% minimum.
👉 This rule does NOT apply to SMEs.
Development Levy (4%) — When It Applies
- Charged at 4% of assessable profit
- Applies only when company income tax applies
- Does not apply to:
- Small companies
- Non-resident companies
Funds are distributed to education, technology, security, and development institutions.
Final Word for Company Owners
Nigeria’s 2026 company tax system is designed to:
- Support small businesses
- Ensure fairness
- Encourage compliance
The key is proper classification, correct filing, and smart structuring.
Need help filing company tax, claiming reliefs, or planning dividends?
Contact Taxify Solutions Technology Limited today.