Annual tax incentive returns for Nigerian companies
Why a Nigerian company with a tax incentive, exemption or relief must file an annual incentive return even with no tax due, and the records behind it.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
A company with a tax holiday or an exemption can be forgiven for thinking it has nothing to file. No tax is due, so what is there to report? Under the NRS's current guidance, quite a lot. An incentive is a privilege granted by law, and the NRS expects to be told, every year, what was claimed and on what basis.
This article explains who must file an annual tax incentive return, why the new law makes the basis of every exemption matter more than before, what happens to reliefs granted under Acts that no longer exist, the records the NRS expects, and what Achekam will and will not compute for you.
Who files, and what it discloses
The NRS says every company enjoying a tax incentive, exemption, relief or concession must file annual tax incentive returns with the NRS, whether or not tax is payable for the period, disclosing all incentives claimed in the year.
That is in addition to the ordinary company return. The NRS also says every company, including one exempted from incorporation and one with no tax to pay, must file a self-assessment return with the NRS at least once a year, with or without notice from the NRS. An exemption from tax is not an exemption from filing.
So a company with an incentive files twice over: its self-assessment return, and its incentive return disclosing everything it claimed. Missing the second is a common gap for companies that assumed the incentive took care of everything.
The NRS describes the incentives available and what it expects from those who claim them on its tax incentives page.
Exemptions must now be expressly provided by law
The NRS says the Nigeria Tax Act requires that tax exemptions be expressly provided by law. An exemption that rests on a letter, a long-standing practice or an understanding with an official is on weak ground. When you list each incentive on your return, be ready to cite the provision that grants it.
For each incentive the company claims, write down:
- what the incentive is, in a sentence;
- the provision of law that grants it;
- the period it covers;
- the conditions attached to it, and the evidence that each condition is met.
That short note, kept with the return, answers most of the questions an NRS reviewer is likely to ask.
Reliefs under repealed Acts, and periods before 2026
The Nigeria Tax Act, 2025 came into effect on 1 January 2026 and, from that date, repealed a long list of earlier laws. Among them are the Companies Income Tax Act, the Personal Income Tax Act, the Capital Gains Tax Act, the Value Added Tax Act, the Stamp Duties Act and the Petroleum Profits Tax Act. The full list also includes the Industrial Development (Income Tax Relief) Act and the Venture Capital (Incentives) Act, two statutes whose very names announce reliefs and incentives.
If your company's incentive was granted under one of those repealed Acts, ask your adviser how it is treated now, and for which periods. Do not assume it carries on unchanged, and do not assume it has fallen away. Either assumption can be expensive.
The records behind each claim
The NRS says that to qualify for tax reliefs a taxpayer must keep proper books and records, file accurate and timely returns, and submit the supporting documents the NRS requires.
Three conditions, and all three matter. A valid incentive can still be lost if the books are poor, a return is late, or the documents the NRS asks for cannot be produced. For incentives with conditions about investment, employment, location or exports, the supporting documents are usually the proof that the conditions were met.
What Achekam computes, and what it refuses
Once its rules are approved, Achekam's Revenue Service Centre computes Nigerian company income tax with the Development Levy and the minimum-ETR check, as well as VAT, withholding tax, capital gains and stamp duty.
Two limits matter for incentive companies:
- Specialised regimes are refused. Petroleum, extractive and non-resident digital regimes are refused as requiring an assessment, and banking, insurance, telecom and capital markets computations carry a warning that sector rules are not in the rule book. An incentive in one of those sectors needs your adviser's computation.
- No periods before 2026. Achekam holds no Nigerian tax rule for periods before 1 January 2026 and refuses to compute those periods. Company tax and levy rules are resolved on the period's first day, so a period that straddles 1 January 2026 is refused as well.
Nothing in Achekam is described as preparing the incentive return itself. Treat it as a document you and your adviser prepare, using the books and computations as the source.
Keeping the incentive file together
An incentive can run for years, and the documents behind it are scattered: the original approval, conditions, correspondence, evidence of investment or employment, each year's returns. Document Centre in Achekam keeps files in folders you can tag and search, and replacing a file keeps its earlier versions. Build one folder per incentive:
- The grant or legal basis, with the provision cited.
- The conditions, and a yearly note on how each was met.
- Each year's self-assessment return and incentive return, with filing receipts.
- Supporting evidence, by year.
- Correspondence with the NRS.
How a small company files its own annual return is covered in the small company annual tax return, and the wider changes behind all of this are in what changed in Nigeria's tax reform. Start the folder with the incentive you are least sure about.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
