Company Income Tax (CIT)
COMPANY INCOME TAX (CIT)
Company Income Tax (CIT) is a tax imposed on the profit of companies other than those involved in oil & gas upstream sector. It is important to state that income from all sources are taxable except those exempted.
Rate of Tax
The rate is 20% of taxable profit for medium size companies (Turnover > N 25 million < 100 million) and 30% for Large Companies (Turnover > N100 million).
Company Income Tax Act (CITA), Cap C21, LFN 2004 (amended)
Recent Amendments –
- the exemption of companies with less than N25 million annual turnover from payment of CIT;
- provision of exemptions for the application of excess dividend tax under Section 19 of the CIT Act
- requirement of a tax identification number for opening of bank accounts or continue operation of existing bank account
- Commencement and cessation rules modified to eliminate overlaps
- Bonus of 2% of tax payable (medium-sized companies) and 1% for large companies for early payment of CIT.
- Filing obligations
6 months after accounting year end.
- Associated Penalties
- Non-filing of returns
The failure to file is N 25,000 for the first month of default then N 5,000 for every subsequent month in which the default continues.
- Non-payment of taxes
Penalties of 10% and interest at the prevailing Market rate
- Available Reliefs
- As detailed in the enabling tax law and regulations
Kindly click the link below to download the Company Income Tax Law