NIGERIA LAW AND PRACTICE Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Rebecca Ebokpo, Jibrin Dasun, Peretimi Akinmodun, Onyinyechi Chima and Princess Otah, ǼLEX
tated via electronic or digital means) are required to register, collect and remit VAT to the FIRS. Where such non-resident supplier fails to col - lect the tax, the Nigerian-resident beneficiary is required to self-account for the VAT and remit it to the FIRS. Capital Gains Tax (CGT) CGT of 10% is payable on chargeable gains aris - ing from the disposal of all assets, inclusive of digital assets, except the following: • private motor vehicles; • securities issued by the Nigerian government; • decorations awarded for valour or gallant conduct; • life assurance policies; • chattels sold for NGN1,000 or less; • assets acquired by way of a gift that are sub - sequently disposed of by way of gift; • investment in superannuation funds, statu - tory provident funds and retirement benefit schemes; • assets devolving upon death; • compensation for loss of office up to NGN10 million; • securities in a unit trust scheme, provided the proceeds are reinvested; • gains arising from the acquisition of the shares of a company as the result of a merger, takeover or acquisition, provided that no cash payment is made in respect of the shares acquired; • gains accruing to local government councils and statutory corporations; and • gains accruing from the disposal of charge - able assets by ecclesiastical, charitable or educational institutions of a public character, statutory or registered friendly societies and registered co-operative societies and trade unions, provided that such gains do not arise from the disposal of assets acquired in con -
nection with any trade or business, nor from the disposal of an interest possessed by the corporation in a trade or business carried on by some other person, and are applied purely for the purposes of the organisation, institu - tion or society. Gains arising from the disposal of shares in a Nigerian company for an aggregate sum of NGN100 million or more in any 12 consecutive months are subject to CGT at 10%. However, if the proceeds are utilised to acquire the shares of any Nigerian company in the year of disposal of the shares, CGT is not payable. Stamp Duty Stamp duty is paid on instruments (including electronic instruments) executed in Nigeria or relating to any property situated – or to any mat - ter or thing done or to be done – in Nigeria. The stamp duty rates differ for various instruments and can be either a nominal rate of NGN500 or ad valorem rates, which can be as high as 6%. Property Taxes Owners of real properties are subject to such rates and levies as may be imposed by the states in which the properties are situated. For instance, in Lagos State, landowners are required to pay a land use charge, which is cal - culated as a percentage of the assessed value of a land. In many states, the holder of an interest in land is required to register that interest, and registration fees may be as high as 6%. 5.3 Available Tax Credits/Incentives There is a 20% tax credit for expenditure on research and development, in addition to capi - tal allowance (up to 95% in the first year), in lieu of depreciation. However, a start-up licensed by
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