Nigeria: Finance Act 2019 including significant economic presence concept entered into force

On 13 January 2020, The President signed the Finance Bill 2019 into law, and it entered into force. The Act 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 like transmitting data, providing digital services, or offering technical and professional services to Nigerian residents. The Act also empowers the Minister of Finance to define the criteria for SEP.