Tax when a Nigerian company stops trading
The final tax return, tax payment, CAC filings and record-keeping a Nigerian company faces when it permanently stops doing business.
By Achekam · · 5 min read · For Running a business businesses in Nigeria
Closing a business is rarely tidy. The last customers are served, staff are paid off, the premises are handed back, and the owners turn to whatever comes next. The tax affairs of the company, though, do not stop on the day the doors close. In Nigeria a company that permanently ceases business still has a final return to file, tax to pay on its last stretch of profit, and filings at the Corporate Affairs Commission that continue as long as the company exists on the register.
This article sets out what the Nigeria Revenue Service (NRS) and the law expect when a company stops trading, and how to wind the books down so the final figures stand up.
Profit up to the day you stop
The NRS says that where a company ceases operations in Nigeria, its assessable profit for the relevant year of assessment is the profit from the beginning of the accounting period to the date of cessation. In other words, the final period is not a full year. It starts where the last accounting period ended and stops on the cessation date.
That makes the cessation date important, and worth fixing in writing. A board resolution recording the date the company stopped trading gives everyone, including the NRS, the same starting point. Sales made, debts collected and stock sold after that date need careful thought with your accountant, because they may belong to the winding-down rather than to the trade.
The final return and the tax, within six months
Two deadlines run from the date of cessation:
- The tax. The NRS says the tax on the final period is payable within six months from the date of cessation.
- The return. Under the Nigeria Tax Administration Act, 2025, a company that permanently ceases business files its self-assessment return not later than six months after cessation. The ordinary content of that return still applies: the self-assessment form, financial statements (audited, or for a small company a statement of accounts attested to by the taxpayer), tax and capital allowances computations, evidence of payment and an attestation signed by a principal officer.
A small company that paid no company income tax while trading is not excused from the final return. The duty to file applies whether or not tax is payable, as explained in why a small Nigerian company still files a tax return.
The NRS explains how companies work out assessable profits, basis periods and allowances in its circular on ascertaining company income tax and the Development Levy, including the rule on cessation quoted above.
The CAC side: the company still exists
Stopping trade does not remove the company from the register. Under the Companies and Allied Matters Act, 2020, every company must deliver an annual return to the Corporate Affairs Commission at least once every year, completed and signed by a director and the secretary. A dormant company that has simply stopped filing is in default, and the company and every director or officer can face penalties set by the Commission.
The Act also makes failure to file annual returns for ten consecutive years a ground for striking the company off the register. That is not a sensible way to close a company: it leaves a decade of defaults behind it. If the owners want the company gone, ask a company secretary or lawyer about the formal routes, and keep filing until the company is actually removed.
Money the NRS may still owe you
A company winding down may find that it paid more tax over the years than it owed, and is due money back. The NRS says no tax refund claim will be allowed unless it is made within six years after the end of the relevant year of assessment.
So before the company's bank account is closed and its records boxed, list every tax account and check for credits. A refund claimed late is a refund lost.
Closing the books and keeping the records
The final months. In Achekam, months can be soft-closed, hard-closed and locked, and a closed month refuses postings from every source. Reopening a hard close needs a second approver. Once the final period's figures are agreed with the accountant, closing and locking the last months stops a stray bank fee or late supplier bill being posted after the tax computation is done. Record those late items deliberately, in an open month, with a note.
The final balance sheet. Achekam has no year-end closing entry today. Profit is not closed to retained earnings and shows as its own line on the balance sheet. When the accountant prepares the final financial statements, expect them to present the profit for the last period and retained earnings in the usual way, outside that screen.
The records. The NRS FAQ says taxpayers must keep books of account in English (or translated into English, as the FAQ specifies), and retain them for at least six years after the relevant assessment year. Closing the company does not end that duty. Achekam's Document Centre is a folder-based store where a business uploads files or whole folders, previews, renames, tags, archives and searches them, and a new version keeps the earlier ones. A "Final period" folder with the cessation resolution, the last bank statements, the final return and the payment evidence keeps everything in one place for the years ahead. More on how long to keep what is in Nigerian record keeping for six years.
Wind-down checklist
- Board resolution recording the date the company ceased business.
- Final management accounts from the start of the period to the cessation date.
- Final tax computation on that profit, with capital allowances.
- Tax paid within six months of cessation.
- Final self-assessment return filed within six months of cessation.
- Refunds and credits listed and claimed within the six-year limit.
- Final months closed and locked in the books after sign-off.
- CAC annual returns kept up until the company is formally removed.
- Records stored for at least six years after the relevant assessment year.
Start the list the month you decide to stop trading, not the month the six-month deadline arrives.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
