Foreign income of a Nigerian company

How Nigeria taxes a resident company's income from abroad, where to read the NRS rules on foreign tax credits, and the records a claim needs.

By Achekam · 11 October 2026 · 5 min read · For Running a business businesses in Nigeria

A Lagos software studio builds an app for a client in Accra. A Port Harcourt engineering firm sends a team to a project in Equatorial Guinea. An Abuja consultancy earns fees from a development agency in Europe. Each of these companies is earning money outside Nigeria, and each owner eventually asks the same two questions: does Nigeria tax that income at all, and if the other country has already taken tax, do we pay twice?

The short answers are that a Nigerian resident company is generally taxed on what it earns everywhere, and that relief for foreign tax depends on the rules the Nigeria Revenue Service (NRS) publishes and on any treaty between the two countries. This article sets out what the sources say, where to read the detail, and what to keep on file.

Residents are taxed on worldwide income

PwC's summary of Nigerian company taxation says resident companies are liable to corporate income tax on their worldwide income, while non-resident companies are subject to it only on their Nigeria-source income.

So for a company incorporated and run in Nigeria, the fee from the Accra client and the profit on the Equatorial Guinea project are part of the same tax computation as its income from Ikeja. There is no separate box to leave them out of. The general rules on rates and the small-company position are in company income tax from 2026, and the wider change in the law is summarised in what the tax reform changed.

For a non-resident company, the picture is the reverse: Nigeria taxes only the part of its income that comes from Nigeria.

Credit for tax already paid abroad

Being taxed twice on the same income is the real fear. The relief for it comes from two places.

Treaties. Where Nigeria has a tax treaty with the other country, the treaty may decide which country taxes the income and how the other gives relief.

Unilateral relief. Where there is no treaty, Nigeria may still give credit on its own. PwC's summary of personal taxation says tax already paid abroad on foreign income that is also taxable in Nigeria may be credited against the Nigerian tax under unilateral relief. That statement is about individuals. For companies, go to the NRS's own guidance: the NRS Tax Guides page lists information circulars on the claim of tax treaty benefits and unilateral credit relief, alongside circulars on the ascertainment of chargeable gains and on the taxation of non-resident shipping and air transport.

You can find those circulars in the NRS's library of tax guides and information circulars, which collects the tax laws, the 2026 guidelines and the circulars on tax treaties and other subjects. Read the treaty-benefits circular before you assume a credit will be given, and before you agree a contract that leaves the foreign customer deducting tax at source.

Federal tax, not State tax

Company income tax is a federal matter. PwC says it is payable only to the federal government, while State governments collect the income taxes of individuals and unincorporated entities, and local governments may collect only levies and rates.

For a company with foreign income, that means the conversation about credits is with the NRS, not with the State revenue service where the office sits. A sole trader or partnership earning abroad is in a different position: its income tax goes to the State.

Invoicing foreign customers: the limits to know in Achekam

Foreign customers often want an invoice in their own currency or in US dollars. Achekam cannot do that today: neither of its invoice forms lets a business invoice in another currency.

There is a second limit for Nigerian businesses. Achekam's ledger screens currently show every amount in rand, and the chart of accounts is stored in ZAR, even for a Nigerian or Kenyan business. Until the ledger follows the business's own currency, a company with foreign earnings should keep its own record of each foreign invoice: the currency, the amount, the exchange rate used to convert it and the source of that rate. Your accountant will need it, and so will any foreign tax credit claim.

What Achekam's tax computations cover

Once its rules are approved, Achekam's Revenue Service Centre computes Nigerian company income tax with the Development Levy and the minimum effective tax rate check, as well as VAT, withholding tax, capital gains and stamp duty. Every Nigerian tax figure in Achekam's rule book was seeded "under review", and Achekam computes nothing from a figure until an Achekam platform administrator approves it.

Specialised regimes are kept out rather than guessed at. Petroleum, extractive and non-resident digital cases are refused as assessment required, and banking, insurance, telecom and capital markets carry a warning that sector rules are not in the rule book. No fact about Achekam says it works out foreign tax credits, so treat the credit as a separate calculation your adviser prepares from the treaty or the NRS circular, and check it before the return is filed.

Records to keep for a foreign tax credit claim

A credit is only as good as the evidence behind it. For each stream of foreign income, keep:

1. The contract or engagement letter, showing who the customer is and where the work was done.
2. The invoices issued, with their currency and amounts.
3. Proof of receipt, from the bank statement, with the naira amount credited.
4. The exchange rates used to convert the income, and where they came from.
5. The foreign tax deducted or assessed: withholding certificates, foreign assessments or receipts.
6. Proof the foreign tax was paid, not just charged.
7. The treaty article or NRS circular relied on, with a note of how the credit was worked out.

Collect these as the income arrives, not at year end. Foreign withholding certificates in particular are hard to obtain months later from a customer who has moved on.

If your company is starting to earn abroad, raise it with your accountant before the first foreign invoice goes out. How the contract is written, and whether the customer deducts tax, is far easier to settle at the start than to unwind in the return.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.