Globalization and trans-border migration has resulted in the movement of people from one country to another for different reasons. Individuals move across national borders for tourism, permanent migration, work etc. Such people who take up employment outside of their home countries are normally referred to as expatriates. Nigeria is not left out of its fair share of expatriates, especially in the oil and gas and mining industries. As is obtainable in all other countries, expatriates in Nigeria are bound by the laws of the Federal Republic of Nigeria, including the various tax laws in existence in the country.

The law places certain tax obligations on expatriates and Nigerian nationals with respect to incomes earned in or derived from Nigeria. It is therefore imperative that a foreigner working in Nigeria acclimatizes himself with his/her tax obligations as imposed by the various tax laws in order to avoid running afoul of the law.

Tax obligations of Expatriates in Nigeria

Expatriates in Nigeria are subject to the same taxes as Nigerian nationals on their personal income. An expatriate’s assessable income for tax purposes with respect to income from his/her employment is the amount of the income of the particular year of assessment.[1] The income of the expatriate shall be deemed to be derived from Nigeria where the duties of employment are wholly or partly performed in Nigeria, or the employer is in Nigeria, or the employer has a fixed base in Nigeria.[2]

However, an expatriate whose duties of employment are wholly or partly performed in Nigeria will not be seen to derive the income from his/her employment from Nigeria where:

  1. the duties are performed on behalf of an employer who is in a country other than Nigeria and the remuneration of the expatriate is not borne by a fixed base of the employer in Nigeria; and
  2. the expatriate is not in Nigeria for a period or periods amounting to an aggregate of 183 days (inclusive of annual leave or temporary period of absence) or more in any twelve month period commencing in a calendar year and ending either within that same year or the following year; and
  3. the income of the employee is taxed in that other country under an avoidance of double taxation treaty with that other country.[3]

An expatriate’s personal income tax is payable to the relevant tax authority in the State of residence. Therefore, an expatriate is liable to pay his/her personal income tax for any particular year of assessment to the State where he/she is resident for that particular year.[4]  The place of residence for an expatriate is that place available for his domestic use in Nigeria on a relevant day. This does not include hotels, rest-houses or other temporary lodging places.[5]

However, where the expatriate is an itinerant worker, he/she shall pay remit income tax to any State where he or she is found during the year. Such expatriate shall be given tax credit against the tax payable, for any income tax he/she may have paid to the tax authority of any other State within a particular assessment year.[6] An expatriate will be regarded as an itinerant worker where he/she works at any time in any State during an assessment year for wages and salaries or livelihood by working in more than one State and for a minimum period of at least twenty days in at least three months of every assessment year.[7]

What Portion of an Expatriate’s Income is taxable?

In every year of assessment, an expatriate is taxed on the aggregate amounts of his/her income for the year, from any salary, wage, fee, allowance or other gain or profit from employment including compensations, bonuses, premiums, benefits or other prerequisites allowed, given or granted by the employer to the expatriate.

Computing the Assessable Income of Expatriates

Income tax for expatriates is calculated on a graduated basis with a flat rate Consolidated Relief Allowance of two hundred thousand Naira (N200,000. 00) plus twenty percent of gross income granted to the expatriate.[11] The income tax rate for expatiates is the graduated tax rates with consolidated allowance of N200, 00.00 plus twenty percent of gross income, subject to a minimum tax of one percent of the gross income of the tax payer (whichever is higher). The graduated tax rates are as follows:[12]

  1. first N300,000 –            7%
  2. next N300,000 –           11%
  3. next N500, 000 –          15%
  4. next N500,000 –           19%
  5. next N1,600,000 –         21%
  6. above N3,200,000 –     24%

Deduction of Personal Income Tax

The personal income tax of an expatriate under paid employment is to be deducted at source from any emolument paid or from payment made on account of the emolument by his/her employer under the Pay-As-You-Earn (PAYE) Scheme. The employer is further required to file a return of all emoluments paid to the expatriate, not later than January 31st of every year in respect to the preceding year. This return is to be filed with the relevant State tax authority.[13]


Expatriates working in Nigeria are bound by the provisions of Nigerian laws. One aspect of such laws is the law governing the taxation of the income of expatriates in the country. Nigeria has no special law governing the taxation of expatriates (save the various Avoidance of Double Taxation Treaties operating in the country) and this implies that the provisions of the Personal Income Tax Act as it concerns the taxation of the incomes of individual is also applicable to expatriates.

The Personal Income Tax Act makes provisions for what income is susceptible to tax, deductions allowed by law, the relevant authority to receiving personal income tax as the mode of calculation of the tax payable by employees or individuals in Nigeria. To this end, a basic understanding of his/her tax obligations is relevant for expatriates in Nigeria.


The above information is for educational purposes only and does not constitute professional advice by Blackwood & Stone LP. Readers are advised to consult a professional on their tax obligations arising from their employment.


For further information, please contact us on:


Phone: 09033501613.



[1] Section 26 of the Personal Income Tax Act (PITA), CAP P8, LFN 2004.

[2] Section 10 of PITA, CAP P8, LFN 2004.

[3] Section 10 (1) (a) of PITA, CAP P8, LFN 2004.

[4] Section 2(2) of the Personal Income Tax Act (PITA), CAP P8 LFN, 2004.

[5] Section 1 of the First Schedule to PITA, CAP P8, LFN 2004.

[6] Section 2(3) of the PITA, CAP P8, LFN, 2004.

[7] Section 108 of PITA, CAP P8, LFN 2004.

[8] Section 3 (1) (b) of the PITA, CAP P8, LFN 2004.

[9] Section 3 (1) (b) of the PITA, CAP P8, LFN 2004.

[10] Section 26 of the Third Schedule to PITA, CAP P8, LFN 2004.

[11] Section 1 of the Sixth Schedule to the PIA, CAP P8, LFN 2004.

[12] Section 3 of the Seventh Schedule to the PITA, CAP P8 LFN, 2004.

[13] Section 81 (1) & (2) of PITA, CAP P8, LFN 2004.