Have you ever wondered, perhaps while looking at pay slips from two different countries or thinking about how your small business in Lagos sends software abroad, does the taxman get you twice for the same income? Let’s just say it’s not a silly question. It really happens, and frankly, it can be confusing. So, this guide is here to give you a very human, almost chatty answer to what Double Taxation Agreements (DTAs) are, how Nigeria Double Taxation Treaties work, and what you, maybe as an individual or a business owner, can actually do about double taxes.
What is Double Taxation?
Maybe you think taxes are just something you pay in one place and you’re done with it. Not quite. Double taxation is when you (yes, you) or your company end up having the same income taxed by both Nigeria and another country. For individuals, that could mean you work in the UK, but Nigeria still wants a piece of your earnings back home. Companies especially those little tech startups doing remote jobs abroad face it too.
Why does it matter anyway? Well, if you’re earning money from outside Nigeria, or investing somewhere else, you don’t want to see your profits sliced in half, right? People sometimes even move businesses away or skip potential deals just because of this. It honestly feels unfair paying twice when you only got paid once.
An Overview of Double Taxation Agreements (DTAs)
So, what are DTAs? Imagine two countries sitting at a table saying, “Let’s not pick on the same taxpayer twice, shall we?” That’s the basic spirit. A Double Taxation Agreement is a deal between Nigeria and another country where both agree on who taxes what, and by how much, so you don’t get taxed twice on the same thing.
But DTAs aren’t just about tax breaks. They usually have key provisions guidelines for income types (like salaries, business profits, dividends), rules to prevent tax cheats, processes for resolving disputes, and sometimes, how information should be shared between countries. It’s all rather organized, if a little wordy.
Nigeria’s Approach to Double Taxation Treaties
Nigeria didn’t always have these treaties. Years back, it was basically, “Pay up!” here and anywhere else you operated. But, with more Nigerians working abroad and more global companies setting up in Nigeria, the government realized it needed to help people (and honestly, attract investment too). That’s how Nigerian tax treaties came in.
The Federal Inland Revenue Service (FIRS) takes charge of this side of policy. FIRS negotiates, signs, and actually enforces these treaties, working with the National Assembly for confirmation. Once the treaty is signed, the President gives the green light, and only then does it enter force. Frankly, it can be a long road. But most Nigerian DTAs follow a pretty standard approach similar rules, clear rates, and defined reliefs.
Comprehensive List of Countries with Double Taxation Treaties with Nigeria
As of May 2025, here’s the updated list. And, to save you from squinting at endless footnotes, these are the ones that are active or most used by Nigerians (I checked FIRS, and PWC’s Nigeria DTA tracker):
Active DTAs:
- United Kingdom
- France
- South Africa
- Canada
- Netherlands
- China
- Belgium
- Pakistan
- Romania
- Philippines
- Czech Republic
- Singapore
- Spain
- Slovakia
- Sweden
- United Arab Emirates
Some pending, being signed, or renegotiated:
- Russia
- Qatar
- Germany
- Mauritius
- Turkey
It’s honestly a growing list, and sometimes these deals are reviewed. When new agreements are concluded, FIRS usually posts updates. Occasionally, you might hear of treaties being reworked, like the ongoing talks with Germany and Turkey.
Key Benefits of Nigeria’s Double Taxation Treaties
Reduction in Withholding Taxes
If you’ve ever tried sending dividends or royalties out of Nigeria, you’ll know that withholding taxes bite. DTAs often cap these taxes at lower rates (sometimes 7.5 percent, as opposed to the usual 10 percent or even 15). That leaves more money in your pocket, or perhaps means you can charge clients less and stay competitive.
Tax Relief for Nigerian Residents and Companies
Let’s say you’re a Nigerian working remotely, or maybe you have a small export business. With an eligible DTA, you can ask for credit or exemption, meaning income that got taxed abroad isn’t charged all over again in Nigeria. That feels fair. And really, for companies, it can make cross-border work less of a paperwork nightmare.
If you're unsure how personal or company tax rates work, refer to our Business Tax in Nigeria: Complete 2025 Guide for more details on rates and compliance.
Preventing Fiscal Evasion and Double Tax
DTAs also help prevent “treaty shopping” or other tricks. The agreements make it harder for people or companies to pretend they live somewhere else just to pay less tax. Or, on the flip side, to avoid accidentally paying tax in two places by mistake.
Encouragement of Foreign Investment
Foreign companies eye countries with good tax treaties. It sends a message Nigeria wants your investment but won’t double-charge you. This encourages trade and brings in fresh business, which (in theory) should benefit the wider economy.
How to Claim Relief or Benefits Under a DTA in Nigeria
Eligibility Criteria
Not everyone qualifies you generally need to be a resident of one country as defined under the DTA. If you split your time or income between several places, you might need to pick one for tax purposes.
Documentation and Application Process (via FIRS)
- Get a Certificate of Residence:
First, prove you really are a Nigerian resident (not just on paper). FIRS will issue a tax residence certificate if your taxes are up to date. - Gather Relevant Documents:
You’ll usually need income statements, evidence of tax paid abroad, and official forms (some countries have their own DTA application forms). - Submit Application:
Application for foreign tax relief Nigeria is done through FIRS, typically the International Tax Department. You ask for either exemption or a tax credit (depending on the treaty’s terms). - Wait for Approval:
Keep copies of everything. Sometimes, there are follow-up questions. Don’t throw away those receipts.
Practical Tips for Individuals and Businesses
- Always check if the country you dealt with has a current DTA with Nigeria
- If unsure, consult a tax advisor (mistakes are common and can be expensive)
- Double-check your tax residence status each year, especially if things change (like a work posting abroad)
For more information on tax residency and obligations for individuals, see Who Pays Personal Income Tax in Nigeria?.
Common Challenges and Practical Issues with Nigerian DTAs
DTAs aren’t silver bullets. Sometimes, you and the foreign tax office both think you’re a resident. Or maybe the treaty language is fuzzy, what’s a “permanent establishment” anyway? There have even been cases where people claimed relief twice by mistake. FIRS can help, but be prepared for some back-and-forth.
Also, compliance with Nigerian DTAs often means extra paperwork. Missing or incorrect information can delay things, sometimes for months. If you are in doubt, it really is better to clarify first, instead of having tax problems showing up years later.
If you're filing back taxes or dealing with tax non-compliance due to confusion with DTAs, our Filing Back Taxes & Dealing with Tax Non-Compliance in Nigeria: Step-by-Step Guide is a helpful resource.
Recent Developments and Updates on Nigeria’s Tax Treaty Network (2024-2025)
In 2024 and 2025, there have been a few changes worth noting:
- New DTA with the United Arab Emirates came into effect recently, with special rates for certain types of income
- Negotiations ongoing with Germany, Russia, and Mauritius an indication that the government is keen on expanding coverage
- FIRS issued clarifications on residency rules and updated online forms for DTA claims in early 2025
If there’s one thing to remember, it’s that official advice changes. Checking FIRS and large tax firms like PwC or KPMG for the latest is just good sense.
Stay up to date with new DTA-related news and Nigerian tax law changes by visiting the Nigerian Tax Insights | MyTax Blog.
Frequently Asked Questions on Nigeria’s Double Taxation Treaties
- Do DTAs cover all types of tax?
No, usually just income or corporate taxes (not VAT or local levies) - Can I claim tax relief for previous years?
Sometimes, if you apply in time and have the right proof. Check deadlines. - How is “residency” decided under these treaties?
It usually depends on where you habitually live. There can be tie-breaker rules in case of overlap. - Is a tax advisor necessary?
Not strictly, but unless you’re very sure or your income is simple, it helps a lot.
Additional Resources and Expert Help
If you’re ever stuck, finding a tax professional (even a brief consultation) can save money and stress. Sometimes, it’s honestly the only way to make sense of all the rules. You can also browse our expert directory for tax specialists in Nigeria.
Related guides:
- Business Tax in Nigeria: Complete 2025 Guide
- Expatriate Taxes in Nigeria
So, Double Taxation Agreements Nigeria? Complicated, yes. But if you want a fairer shot at keeping what you legally earn, they're well worth understanding which is probably what you were hoping for anyway.