Nigeria’s Tax Reform 2025: Why the New Rules on Offshore Profits Should Be Your First Concern

September 19, 2025

Nigeria’s 2025 tax reforms are sweeping, ambitious, and complex.

A central feature of these reforms is the proposed introduction of Controlled Foreign Corporation (CFC) rules—an anti-avoidance measure aimed at curbing tax deferral through offshore subsidiaries.


Here’s the blunt reality: if your Nigerian company controls a foreign subsidiary, and that subsidiary is impacted by these new CFC rules, it could impact you. Nigerian companies with foreign subsidiaries need to assess exposure to deemed income taxation. Unfortunately, the draft bill is not clear on what defines control of a foreign subsidiary, so hopefully clarity will be forthcoming. As stated, what is clear is the need to review your Nigerian company’s exposure to the new CFC rules and take professional advice.


But it’s only the beginning of Nigeria’s new tax landscape.


Other Major Changes You Need to Know 


1. Corporate Tax and the New Development Levy 

  • Standard corporate tax will gradually reduce from 30% to 25% in the coming years, giving businesses some relief. 
  • However, a new 4% Development Levy consolidates sector-specific levies like the education tax and IT levy. For many large businesses, this effectively pushes the total burden back up, in some cases close to 34%. 


2. Capital Gains Tax (CGT) 

  • Companies will now pay CGT at the same rate as corporate tax — a sharp rise from 10% to 30%. 
  • Indirect transfers of Nigerian assets through offshore holding companies are also caught, closing a common avoidance route. 


3. VAT Modernisation 

  • The VAT rate remains at 7.5%, but Nigeria now has a “real” VAT system: businesses can claim input VAT on expenses and assets, aligning with global practice. 
  • Essential goods and services — food, healthcare, rent, electricity, education — are zero-rated, easing pressure on households. 
  • Mandatory e-invoicing and VAT “fiscalisation” will apply from 2026, signalling Nigeria’s shift into digital compliance. 


4. Small Business Relief 

  • Companies with turnover below ₦50m (approx. USD 33,000) are exempt from corporate tax and VAT registration. 
  • Filing requirements are simplified, aimed at drawing informal traders into the formal tax net. 


5. Personal Income Tax Reform 

  • Individuals earning less than ₦800,000 (approx. USD 520) annually are now tax-free. 
  • High earners face a new top rate of 25% on income above ₦50m (approx. USD 33,000). 
  • Rent relief of up to ₦500,000 provides extra breathing space for lower- and middle-income households. 

 

Why This Matters for Global Investors 


Nigeria is raising its tax-to-GDP ratio from just 10% to 18% by 2026, without officially “raising taxes.” The strategy is to simplify rules, close loopholes, and enforce compliance harder. 


For international clients, the risks and opportunities are clear: 

  • CFC rules mean offshore profits are no longer sheltered. 
  • Residency tests may pull foreign entities into Nigerian taxation if managed locally. 
  • Transfer pricing rules will bite harder under the new regime. 
  • Digital compliance (VAT e-invoicing, fiscalisation) will demand new systems and controls. 


The Challenges Ahead 


The reforms are bold, but implementation will decide whether they succeed. Potential pitfalls include: 


  • Administrative strain — training staff, updating systems, and issuing clear guidance. 
  • Overzealous enforcement — risk of aggressive assessments undermining business confidence. 
  • Inflation erosion — thresholds set in naira may quickly lose relevance in real terms. 


Conclusion: Prepare, Don’t Wait 


Nigeria’s 2025 tax reforms are more than technical housekeeping — they redraw the rules of engagement for doing business in Africa’s largest economy. 


For SMEs and households, the changes promise relief. For multinationals, high-net-worth individuals, and cross-border investors, they introduce tougher compliance, higher risks, and new traps such as the CFC rules. 


At Mosaic Chambers Group, we help clients structure cross-border operations, manage tax exposure, and stay compliant across jurisdictions. If you have Nigerian interests, now is the time to review your arrangements before the reforms take effect in 2026. 


Contact us to discuss how these changes may impact your business or investment strategy. 


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Is Dubai Still Safe in 2026? UAE Relocation Trends amid Regional Struggles

By Amie Roberts • March 24, 2026
Is Dubai still safe in 2026? Explore how Iran tensions are affecting UAE relocation decisions and what HNWIs should consider before moving.

Pitfalls High-Net-Worth Individuals Should Avoid When Moving to Dubai in 2026

By Amie Roberts • March 13, 2026
Dubai continues to attract high-net-worth individuals from the UK and around the world. Its tax efficiency, strong infrastructure and international business environment make it an appealing base for both personal wealth and global business operations. However, relocating or investing in Dubai without proper planning can lead to costly mistakes. Understanding the legal, financial and cultural environment before making decisions is essential. Below are some of the most common pitfalls HNWIs should avoid when relocating to Dubai in 2026... Overlooking Tax Planning A common misconception is that living in Dubai means there are no tax considerations. While the UAE has no personal income tax, the regulatory environment has evolved in recent years. The introduction of UAE corporate tax, VAT and international tax reporting requirements means individuals with businesses, investments or global income streams still need structured tax planning. Those relocating from the UK must also consider the implications of the Statutory Residence Test, potential split-year treatment and double taxation agreements. Failing to structure finances properly before relocating can create unnecessary tax exposure in multiple jurisdictions. Rushing Property Investments Dubai’s real estate market offers strong opportunities, but it also requires careful due diligence. Off-plan property purchases in particular should be approached cautiously. Buyers should review the developer’s track record, financial strength and delivery history. Market cycles are also important to consider, especially as increased supply in certain areas could lead to price corrections in the future. Taking time to assess location, developer credibility and long-term demand helps protect capital and avoid poorly performing investments. Underestimating the Real Costs of Property Ownership The advertised purchase price is only part of the financial commitment when buying property in Dubai. Investors should also factor in: The Dubai Land Department (DLD) transfer fee of 4% Ongoing service charges for buildings or communities Maintenance and management costs Ignoring these costs can significantly impact overall investment returns. Failing to Prepare for Banking Requirements Opening bank accounts in the UAE can be more complex than many expect, particularly for international clients. Banks require extensive documentation to comply with international anti-money laundering regulations. If financial structures or documentation are unclear, accounts can be delayed, restricted or even frozen. Ensuring all financial arrangements are transparent and properly structured before relocation makes the process significantly smoother. Misunderstanding Residency and Visa Options Many individuals assume residency can be arranged later or through temporary arrangements. In reality, visa planning should be part of the relocation strategy from the outset. For example, long-term residency options such as the UAE Golden Visa have specific investment and eligibility criteria. Understanding these requirements early allows individuals to structure investments and assets accordingly. Ignoring Local Laws and Regulations Dubai is known for its safety and order, but this is supported by a strict legal framework. Actions that might be overlooked elsewhere, such as offensive language, inappropriate social media content or public intoxication, can carry significant legal consequences. Financial transactions and business activities are also closely regulated. Taking time to understand the legal environment helps avoid unnecessary issues. Underestimating Cultural and Lifestyle Differences Dubai is an international city, but it operates within a framework of local customs and expectations. Respect for public behaviour, dress standards in certain locations and cultural sensitivity are all important. Practical factors such as the extreme summer climate can also affect lifestyle choices and property decisions. Understanding these aspects helps individuals settle comfortably and avoid unnecessary challenges. How Mosaic Chambers Group Can Help Relocating to Dubai is rarely just about moving location. It involves tax planning, asset structuring, property considerations, residency strategy and cross-border compliance. At Mosaic Chambers Group, we support high-net-worth individuals and entrepreneurs with the strategic planning needed to relocate with confidence. Through our international network of tax advisers, legal specialists and relocation partners, we help clients: Structure their affairs before leaving the UK Manage cross-border tax exposure Understand residency and visa options Conduct proper due diligence on investments Establish compliant financial and banking arrangements Careful planning at the outset can prevent costly mistakes later. If you are considering relocating to Dubai in 2026, speak to Mosaic Chambers Group to ensure your move is structured correctly from day one.  Contact Us
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