Double Taxation in Nigeria
Double Taxation in Nigeria can be define as a tax principle referring to income taxes paid twice on the same source of income. It can occur when income is taxed at both the corporate level and personal level. Double taxation also occurs in international trade or investment when the same income is taxed in two different countries
Types of Double Taxation in Nigeria.
There are two types of DT: jurisdictional and economic DT. In the first one, when source rule overlaps, tax is imposed by two or more countries as per their domestic laws in respect of the same transaction, income arises or deemed to arise in their respective jurisdictions.
Nigeria over the years have had agreements with some other countries in which she has DTTs with. Nigeria has DTTs with Belgium, Canada, China, Czech Republic, France, the Netherlands, Pakistan, Philippines, Romania, Singapore, Slovakia, South Africa, Spain, Sweden, and the United Kingdom
The Effect of Double Taxation in Nigeria.
DT is undesirable, because if businesses end up paying tax on the same income in multiple countries, they will not want to do business overseas, thus affecting the inward investment into Nigeria which could reduce employment rate and increase the probability of poverty
How to avoid Double Taxation in Nigeria
Paying Salaries Instead of Dividends is a realistic measure to avoiding DT. Since salaries are considered a business expense, they are not subject to DT. By paying out profits in the form of salaries rather than dividends,
a corporation can avoid DT.
For more enquiry on how to avoid DT, kindly contact us at SOW Professional Services Ltd
www.sowprofessional.com
@sowprofessionaltd
@sowprofessional.com
care@sowprofessional.com
08152451523
07038254989
