Full List: Countries With Double Taxation Agreement With Nigeria

Understanding the Full List of Countries with Double Taxation Agreements (DTAs) with Nigeria

Double Taxation Agreements (DTAs) are formal treaties established between two sovereign nations to prevent individuals and businesses from being taxed twice on the same income.

For Nigeria, these agreements are particularly crucial given the growing concerns among Nigerians in the diaspora and foreign investors about the risk of being taxed both in Nigeria and in their country of residence.

The Federal Inland Revenue Service (FIRS) oversees these treaties, specifically the Avoidance of Double Taxation Agreements (ADTAs), which are housed within its Tax Policy and Legislation Department.

The purpose of these agreements is to foster international trade and investment by providing clarity and relief from double taxation. They typically cover income taxes, including taxes on dividends, interest, royalties, and capital gains. DTAs also include provisions for the exchange of information and mutual assistance in tax collection, which helps combat tax evasion and improve compliance.

Nigeria has entered into full DTAs with several countries across Europe, Asia, Africa, and North America. These agreements vary in scope and date of enforcement.

For instance, Nigeria’s agreement with the United Kingdom came into force on January 1, 1988, and became effective on January 1, 1989. Similarly, the DTA with Belgium was enforced on January 1, 1990, and became effective a year later. Other notable agreements include those with France, the Netherlands, Canada, South Africa, China, Sweden, Spain, and Singapore, each with specific dates of entry into force and effectiveness.

In addition to full DTAs, Nigeria also has limited agreements such as the Air and Shipping Transport Agreement with Italy, which was enforced on February 22, 1977, but retroactively effective from January 1, 1968.

These limited agreements typically focus on specific sectors and are narrower in scope compared to full DTAs.

The existence of these treaties is meant to reassure Nigerians abroad and foreign investors that their income will not be subject to double taxation. This is especially relevant in light of recent tax reforms and public misconceptions about the implications of new tax laws.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has publicly clarified that income earned abroad will not be taxed twice, addressing fears that have arisen due to misinterpretations of the law.

In summary, Nigeria’s network of DTAs serves as a strategic tool to enhance its global economic relations, protect its citizens and businesses from unfair tax burdens, and promote transparency and cooperation in international taxation.

The full list of countries with which Nigeria has these agreements includes the United Kingdom, Belgium, Pakistan, Czech Republic, Slovakia, France, Netherlands, Romania, Canada, South Africa, China, Sweden, Spain, Singapore, and Italy (limited agreement), among others.