New Nigerian Tax Law Clarified: No Double Taxation for Diaspora Income

New Nigerian Tax Law Clarified: No Double Taxation for Diaspora Income

Published on 20 February 2026, Nigeria's new tax reforms have sparked significant discussion among Nigerians living abroad, particularly regarding concerns about double taxation on foreign income and remittances. The Presidential Fiscal Policy and Tax Reforms Committee, chaired by tax expert Taiwo Oyedele, has issued clarifications to dispel misinformation and outline the actual provisions of the law.

Key Exemptions for Nigerians Abroad

The committee emphasizes that income earned by Nigerians abroad who work and earn without ties to Nigeria will not be taxed under the new law. This includes remittances, gifts, and personal transfers, which are vital for many families back home. Tax applies only to income derived from Nigeria, such as rental income, dividends from Nigerian companies, or business profits earned locally.

Residency and the 183-Day Rule

Much of the confusion stems from how tax residency is determined. Under the new law, residency is based on the 183-day rule, meaning individuals must be physically present in Nigeria for at least 183 days within a 12-month period to be considered residents. Non-residents are taxed only on Nigerian-source income, regardless of their nationality or dual citizenship status.

Addressing Double Taxation Concerns

One of the primary fears among the diaspora has been the possibility of being taxed twice—once in their country of residence and again in Nigeria. The committee clarifies that Nigeria maintains Double Taxation Agreements (DTAs) with several countries, including the United Kingdom, Canada, and South Africa, to prevent this. Where no treaty exists, unilateral relief provisions in Nigerian law offer protection.

10 Key Points for Nigerians Abroad

1. Foreign income is not taxable for non-resident Nigerians earning abroad without ties to Nigeria.
2. Remittances, gifts, and personal transfers are exempt from tax.
3. Tax applies only to income derived from Nigeria, like rental income or local business profits.
4. Remote work for Nigerian companies may be taxable if tied to Nigeria.
5. Residency is based on the 183-day rule, not citizenship.
6. Non-residents are taxed only on Nigerian-source income.
7. Dual citizenship does not affect tax status.
8. Double Taxation Agreements prevent the same income from being taxed twice.
9. Unilateral tax relief applies where no treaty exists.
10. Foreign income already taxed abroad may claim relief under Nigerian law.

Related Developments in Tax Administration

In a related move, the Nigeria Revenue Service has launched a mandatory electronic invoicing system for large businesses, known as the Merchant Buyer Solution (MBS). This initiative aims to enhance digital tax administration, with about 1,000 out of 5,000 eligible firms already integrating into the platform shortly after its rollout.

The clarifications provided by the committee aim to reduce uncertainty and align Nigeria's tax practices with international standards, ensuring that Nigerians abroad can continue to support their families without undue tax burdens.