Nigeria: Significant Economic Presence Order for direct taxation of non-resident entities (SEP Order) was adopted by Minister of Finance

On 3 February 2020, the Nigerian Minister of Finance adopted the Companies Income Tax (Significant Economic Presence) Order 2020 under the authority of the Finance Act 2019. The Order establishes criteria for determining when non-resident entities have a significant economic presence in Nigeria, including an annual turnover exceeding NGN 25 million from digital activities such as streaming, data transmission, or intermediation services. It also considers the use of a Nigerian domain name or targeted interactions with Nigerian users. Non-resident entities providing technical, professional, or consultancy services are subject to a 10% final tax on income from Nigerian residents. The Federal Inland Revenue Service (FIRS) is authorised to assess taxes based on a deemed profit of 6% of attributable turnover. The Order exempts companies covered by multilateral agreements to which Nigeria is a party.