Countries with Double Taxation Agreement with Nigeria

Countries with Double Taxation Agreement with Nigeria: What You Need to Know

Double taxation is a situation where a taxpayer is taxed twice on the same income in two different countries. This can happen when a taxpayer earns income in one country and is taxed in that country, but the income is also taxed in another country where the taxpayer is a resident. To avoid such a situation, countries can enter into double taxation agreements (DTAs). These agreements establish rules for taxing income so that taxpayers are not subject to double taxation.

Nigeria has entered into several DTAs with other countries to promote international trade and investment. These agreements are designed to eliminate double taxation and provide certainty for taxpayers on how their income will be taxed in both countries. Below are some of the countries that have DTAs with Nigeria:

1. Canada – Nigeria signed a DTA with Canada in 2012. The agreement provides rules for taxing income from sources such as dividends, interest, royalties, and capital gains. It also establishes procedures for resolving disputes between the tax authorities of both countries.

2. France – Nigeria and France signed a DTA in 1983. The agreement covers taxes on income, capital gains, and inheritance. It also includes provisions for the exchange of information between the tax authorities of both countries.

3. Germany – Nigeria and Germany signed a DTA in 2001. The agreement applies to taxes on income, capital gains, and the taxation of international transportation. It also provides for the elimination of double taxation and the prevention of tax evasion.

4. India – Nigeria and India signed a DTA in 1993. The agreement covers taxes on income, capital gains, and dividends. It also provides for the exchange of information between the tax authorities of both countries.

5. United Kingdom – Nigeria and the United Kingdom signed a DTA in 1987. The agreement covers taxes on income and capital gains. It also provides for the elimination of double taxation and the prevention of tax evasion.

6. United States – Nigeria and the United States signed a DTA in 1992. The agreement covers taxes on income, capital gains, and the taxation of international transportation. It also includes provisions for the exchange of information between the tax authorities of both countries.

These DTAs provide important benefits for taxpayers doing business in Nigeria and the relevant countries. They help to reduce tax burden and encourage investment by providing certainty and predictability for taxpayers. In addition, they help to prevent tax evasion and promote cooperation between the tax authorities of both countries.

However, it is important to note that DTAs can be complex, and taxpayers should seek professional advice to understand how these agreements apply to their specific circumstances. Additionally, DTAs can be subject to change, and taxpayers should stay informed about any updates or changes to the agreements.

In conclusion, the DTAs that Nigeria has signed with other countries are an important tool for promoting international trade and investment. They provide important benefits for taxpayers and help to prevent double taxation. Understanding these agreements is crucial for anyone doing business across borders.