If you run a registered company in Nigeria, understanding Company Income Tax is important because the rules changed significantly from 1 January 2026. The Nigeria Tax Act 2025 now provides the main framework for taxing company profits, while the Nigeria Tax Administration Act 2025 sets out important filing and payment requirements.
This guide explains how Company Income Tax works in Nigeria in 2026, who needs to pay it, how to calculate it, how to file your return and how to pay the tax through the Nigeria Revenue Service.
What Is Company Income Tax In Nigeria?
Company Income Tax, commonly called CIT, is a tax charged on the taxable profits of companies operating in Nigeria.
It is different from Value Added Tax, Withholding Tax and other taxes that a company may have to deal with. CIT is primarily concerned with the company’s taxable profits.
From 2026, the Nigeria Tax Act 2025 is the main legislation governing company income tax, and the Nigeria Revenue Service, NRS, is responsible for administering federal taxes. The NRS currently lists the Nigeria Tax Act 2025 and Nigeria Tax Administration Act 2025 among the country’s tax laws.
One important point is that you do not simply calculate CIT by taking a percentage of all the money that entered your company’s bank account. You generally need to determine the company’s taxable profit after considering allowable deductions and other relevant tax adjustments.
Who Is Required To Pay Company Income Tax In Nigeria?
Companies that are subject to Nigerian company income tax generally have to calculate their taxable profits and meet their filing obligations.
Resident companies are generally subject to Nigerian company income tax on their relevant income, while non-resident companies can also become taxable in Nigeria where they have taxable Nigerian-source income or a taxable presence under the law.
The rules can become more complicated for multinational companies, non-resident companies and companies operating across different jurisdictions. Such businesses may need professional tax advice.
What Is The Company Income Tax Rate In Nigeria In 2026?
The Nigeria Tax Act 2025 provides two main company income tax rates.
1. Small Companies
A qualifying small company is subject to a 0% Company Income Tax rate.
Under the Nigeria Tax Act, a small company is generally one with gross turnover of not more than ₦50 million per year and total fixed assets not exceeding ₦250 million. A company providing professional services does not qualify as a small company under this definition.
This means that a company does not automatically qualify simply because its turnover is below ₦50 million. The other conditions also matter.
2. Other Companies
Companies that do not qualify as small companies are subject to a 30% Company Income Tax rate under the Nigeria Tax Act 2025. The Act also contains a provision for the rate to reduce to 25% from a future date determined by presidential order on the advice of the National Economic Council.
Therefore, businesses should not automatically use 25% when calculating their 2026 CIT unless and until the required change takes effect.
How To Calculate Company Income Tax In Nigeria
The basic process is straightforward, although the actual tax computation can become more detailed depending on the company.
1. Calculate Your Company’s Total Income
Start by determining the company’s income for the relevant accounting period.
This may include income from selling products, providing services and other taxable business activities.
Do not confuse total income or turnover with taxable profit. A company can have ₦100 million in sales but considerably less taxable profit after allowable business expenses and tax adjustments.
2. Calculate Allowable Business Expenses
Next, identify expenses that are allowable for tax purposes.
These may include legitimate expenses incurred in producing the company’s income, subject to the specific rules of the Nigeria Tax Act.
Examples can include certain employee costs, business premises expenses, professional expenses, repairs, operating expenses and other costs that meet the requirements for tax deduction.
Not every expense recorded in your company’s accounting books will automatically be deductible for tax purposes.
3. Determine Your Taxable Profit
After identifying the relevant income and allowable deductions, calculate the company’s taxable profit.
A simple way to understand the calculation is:
Taxable Profit = Taxable Income − Allowable Deductions and Adjustments
The actual tax computation can also require capital allowance calculations and other adjustments, so the accounting profit shown in your financial statements may not always be the same as the final taxable profit.
4. Apply The Appropriate CIT Rate
Once the taxable profit has been determined, apply the rate that applies to the company.
For example, if a company that does not qualify as a small company has a taxable profit of ₦20 million:
₦20,000,000 × 30% = ₦6,000,000
The company’s CIT liability from this simplified example would therefore be ₦6 million before considering any other applicable tax adjustments, credits or liabilities.
A qualifying small company, on the other hand, has a 0% CIT rate.
Company Income Tax Calculation Example For A Nigerian Company In 2026
Imagine a Nigerian company has the following figures for its accounting year:
Annual revenue: ₦80 million
Allowable business expenses: ₦50 million
Taxable profit before other tax adjustments: ₦30 million
If the company is not classified as a small company, the simplified CIT calculation would be:
₦30 million × 30% = ₦9 million
Therefore, the simplified Company Income Tax liability would be ₦9 million.
However, this is only an illustration. A real tax computation may involve capital allowances, tax adjustments, tax credits, exemptions and other provisions of the Nigeria Tax Act.
Do Small Companies Pay Company Income Tax In Nigeria?
A company that meets the statutory definition of a small company can have a 0% CIT liability under the 2026 framework.
The key conditions include:
- Gross turnover of not more than ₦50 million per year.
- Total fixed assets not exceeding ₦250 million.
- The company must not be a business providing professional services.
Meeting one condition is not enough. The company must satisfy the applicable requirements to receive the small-company treatment.
However, having a 0% CIT liability does not mean the company can simply ignore its tax obligations. Companies are still required to comply with applicable filing requirements.
When Should A Company File Its Company Income Tax Return?
The Nigeria Tax Administration Act 2025 requires every company, including a company that is exempt from tax, to file a self-assessment return at least once every year. The return includes prescribed information and supporting documents required under the law.
The exact filing deadline applicable to a company should be checked against the current NRS filing and payment calendar, particularly where the company’s accounting year differs from the calendar year.
The NRS maintains a dedicated page for filing and payment deadlines.
What Documents Do You Need For Company Income Tax Filing?
Depending on the company and its circumstances, the tax return may require documents such as:
- Audited financial statements.
- Tax computation.
- Capital allowances computation.
- Evidence of tax payment.
- Relevant schedules supporting the figures reported.
- Other information required by the NRS.
The Nigeria Tax Administration Act specifically provides for audited financial statements, tax and capital allowances computations and evidence of payment to accompany company self-assessment returns. Small companies may submit a statement of accounts attested to by the taxpayer instead of audited financial statements where the law permits it.
How To Register For Company Income Tax In Nigeria
Before dealing with your company’s tax obligations, make sure the company has the required tax identification details.
The NRS Tax ID system allows corporate entities to retrieve their Tax ID using their organisation name or CAC registration number.
You can also register as a corporate taxpayer through the NRS Taxpayer Self-Service Portal. The portal provides a corporate registration option for entities incorporated with the Corporate Affairs Commission.
How To File Company Income Tax Online In Nigeria
The NRS has a Taxpayer Self-Service Portal that allows taxpayers to manage their tax affairs online.
The portal currently provides services including self-tax filing, payments, assessments, tax clearance and tax account management.
The general process is:
1. Log Into The NRS Taxpayer Portal
Access your company’s account using the appropriate NRS login credentials.
2. Select The Relevant Tax Filing Service
Choose the Company Income Tax or relevant corporate tax filing option.
3. Prepare Your Tax Information
Have your financial statements, tax computation and supporting documents ready.
4. Complete The Self-Assessment Return
Enter the required information and review the figures carefully.
5. Upload The Required Documents
Attach the financial statements, tax computation and other documents required for the return.
6. Submit The Return
Review the information before submitting the company’s tax return.
7. Make The Required Payment
Where CIT is payable, complete the payment through the available NRS payment process and retain evidence of payment.
How To Pay Company Income Tax In Nigeria
After calculating your tax liability and filing the return, you can use the NRS digital platform to manage the payment.
The NRS Taxpayer Self-Service Portal currently provides a payment function alongside tax filing, assessments, tax clearance and other services.
The basic process is:
- Log into your NRS taxpayer account.
- Review your tax assessment or amount due.
- Select the relevant payment option.
- Follow the payment instructions provided by the platform.
- Complete the payment.
- Save the payment receipt and reference.
- Confirm that the payment has been properly reflected in your tax account.
Do not throw away your payment evidence. It can be useful when resolving future tax queries or proving that a liability has been paid.
Company Income Tax And Tax Clearance Certificate
Paying your tax and maintaining proper filing records can also be important when your company needs evidence of tax compliance.
A Tax Clearance Certificate can be required for certain transactions, contracts, applications and other official purposes.
The NRS Taxpayer Self-Service Portal currently includes Tax Clearance as one of its services.
What Happens If A Company Does Not File Or Pay Its Tax?
Failure to meet tax obligations can expose a company to penalties, interest and enforcement action under the applicable tax laws.
The Nigeria Revenue Service maintains dedicated resources for penalties, sanctions and enforcement actions.
This is why companies should not wait until the deadline before preparing their accounts and tax returns.
7 Common Company Income Tax Mistakes Nigerian Businesses Make
1. Calculating Tax From Turnover
Some business owners simply multiply their total sales by the CIT rate.
CIT is generally based on taxable profits rather than simply applying the rate to every naira that enters the business.
2. Using An Old Tax Rate
The Nigerian tax system changed in 2026. Businesses should use the current Nigeria Tax Act and NRS guidance rather than relying on old articles or tax calculations.
3. Assuming Every Small Business Pays 0% CIT
Not every company with low turnover automatically qualifies as a small company. The turnover, fixed asset and professional service conditions must be considered.
4. Treating Every Business Expense As Tax Deductible
An expense appearing in your accounting records does not automatically mean that it can be deducted for tax purposes.
5. Ignoring Tax Filing Because The Company Owes No CIT
A 0% CIT liability does not necessarily remove the company’s filing obligations. The Nigeria Tax Administration Act requires companies, including tax-exempt companies, to file annual self-assessment returns.
6. Mixing Personal And Business Transactions
Using a company account for personal spending can make accounting and tax reporting more difficult. Keep proper records of business income and expenses.
7. Waiting Until The Deadline To Prepare
Tax calculations require financial records. Preparing everything at the last minute increases the risk of errors, missing documents and late filing.
Company Income Tax Vs VAT
Company Income Tax and Value Added Tax are different taxes.
Company Income Tax is primarily concerned with the taxable profits of a company.
Value Added Tax is a consumption tax charged on qualifying goods and services at the applicable rate.
A company can therefore have obligations under both CIT and VAT. Paying one does not automatically satisfy the other.
Company Income Tax Vs Withholding Tax
Withholding Tax, commonly called WHT, is also different from Company Income Tax.
WHT is generally deducted at source from certain payments. Depending on the circumstances, the amount withheld may serve as a final tax or may be available as a credit against a taxpayer’s tax liability.
Therefore, businesses should not treat every WHT deduction as though it were the same thing as paying their annual Company Income Tax.
Frequently Asked Questions About Company Income Tax In Nigeria
1. What Is Company Income Tax In Nigeria?
Company Income Tax is a tax imposed on the taxable profits of companies under Nigerian tax law.
2. What Is The Company Income Tax Rate In Nigeria In 2026?
The Nigeria Tax Act 2025 provides a 0% rate for qualifying small companies and a 30% rate for other companies. The Act contains a provision for the 30% rate to reduce to 25% from a future date determined by presidential order on the advice of the National Economic Council.
3. How Is Company Income Tax Calculated?
In simple terms, you determine taxable profit after the relevant deductions and tax adjustments and then apply the applicable CIT rate.
4. Do Small Companies Pay Company Income Tax?
Qualifying small companies have a 0% CIT rate. The company must meet the conditions in the Nigeria Tax Act, including the applicable turnover, fixed asset and professional service requirements.
5. Can A Company With No Tax To Pay Still File A Tax Return?
Yes. The Nigeria Tax Administration Act requires companies, including companies granted tax exemptions, to file annual self-assessment returns.
6. Can I File Company Income Tax Online?
Yes. The NRS Taxpayer Self-Service Portal provides online tax filing services for taxpayers.
7. Can I Pay Company Income Tax Online?
Yes. The NRS Taxpayer Self-Service Portal provides online payment functionality for taxpayers.
8. Is Company Income Tax The Same As VAT?
No. Company Income Tax concerns taxable company profits, while VAT is a consumption tax on qualifying supplies.
9. What Happens If My Company Does Not Pay Its Tax?
A company that fails to comply with applicable tax obligations may face penalties, interest and other enforcement measures under Nigerian tax law.
10. Where Can I Find The Current Company Tax Rules?
The safest starting point is the official Nigeria Revenue Service website, which provides access to the current tax laws, compliance resources, tax calendar and taxpayer services.
Conclusion
Calculating Company Income Tax in Nigeria in 2026 starts with understanding whether your company qualifies as a small company, determining its taxable profit and applying the correct tax rules.
The most important change to remember is that the Nigeria Tax Act 2025 now provides a 0% CIT rate for qualifying small companies and a 30% rate for other companies. However, businesses still need to maintain proper records, file their required returns and pay any tax due on time.
For companies with complicated transactions, large turnover, foreign income, related-party transactions or significant tax liabilities, it is sensible to work with a qualified tax professional before submitting the return.