Nigeria Implements 15% Minimum Effective Tax Rate

The Nigeria Tax Act (NTA) introduces a 15% Minimum Effective Tax Rate (METR), marking a significant change in Nigeria's corporate tax framework. The METR ensures that companies of substantial economic scale pay a minimum tax, regardless of available incentives or exemptions.

It is implemented through Sections 6(3) and 57 of the NTA, which target different taxpayer classes. Section 6(3) applies to Nigerian parent companies with low-taxed foreign subsidiaries, imposing a top-up tax if the foreign subsidiary's Effective Tax Rate (ETR) is below 15%.

This provision prevents profit retention in low-tax jurisdictions without a corresponding Nigerian tax charge. Section 57(2) directly imposes the METR on multinational enterprises and large domestic companies, specifically targeting those with a group turnover of at least €750 million.

This threshold is assessed at the group level, allowing Nigerian entities to fall under the METR regime even if their operations are modest.