The Companies Income Tax (Significant Economic Presence) Order, 2020

Posted on June 23, 2020

For a long time, the tax obligations of digital platforms companies owned and operated by non-Nigerians was a moot point. The Finance Act however resolves the contention that profits of digital platform companies are taxable in Nigeria. Section 3(b) of the Finance Act, 2019 is aimed specifically at resolving the peculiar taxation challenge of the digital economy.

Specifically, it provides that the profits of a non-Nigerian company from any trade or business shall be deemed to be derived from Nigeria if it transmits, emits or receives signals, sounds, messages, images or data of any kind by cable, radio, electromagnetic systems or any other electronic wireless apparatus to Nigeria in respect of any activity, including electronic commerce, application store, high frequency trading, electronic data storage, online adverts, participative network platform, online payments and so on, to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity.

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