Nigeria: Finance Bill 2019 was adopted by Senate including significant economic presence concept

On 11 December 2019, the Senate passed the Finance Bill 2019 and sent it to the President for assent. The Bill introduces the concept of Significant Economic Presence (SEP) in Nigeria, ensuring that non-resident companies with a substantial economic footprint in the country are subject to taxation, even in the absence of a physical presence. This provision particularly targets digital businesses and other remote operations that generate income from Nigeria, such as e-commerce platforms, online advertising, and digital services. Under the amended Section 13 of the Companies Income Tax Act (CITA), a company is deemed to have a significant economic presence if it engages in activities such as transmitting data, providing digital services, or offering technical and professional services to Nigerian residents. The Bill also empowers the Minister of Finance to define the criteria for SEP.