Under the Nigeria Tax Act 2025, which the Federal Government confirmed commences on 1 January 2026 as planned, becoming a non-resident individual of Nigeria requires failing six separate tests at once. Being domiciled in Nigeria, on its own, makes you a resident individual for the whole year of assessment whatever your day count shows. And section 12 charges a resident to Nigerian tax on income, gains and profits “wherever they arise, and whether or not the income, profits or gains have been brought into or received in Nigeria.”
The second half of the problem is that there is no usable treaty. The Nigeria to UAE agreement was signed on 18 January 2016, and section 121(1) of the Act provides that such an agreement “shall have effect upon ratification or domestication by the National Assembly.” Nigeria’s own filing with the OECD records no entry-into-force date for it. This guide sets out the new residence test, what Nigeria charges, how chargeable gains moved inside income tax, and the Tax ID rule that now reaches your Nigerian bank account from Dubai.
The Six-Limb Residence Test, and Why It Is Asymmetric
The Act defines a “resident individual” with six alternative limbs joined by “or,” and a “non-resident individual” with six negative limbs joined by “and.” Satisfying any one limb makes you resident. Escaping requires failing every single one.
| Limb | Resident individual (any one is enough) | Non-resident individual (all must be true) |
|---|---|---|
| (a) | Is domiciled in Nigeria | Is not domiciled in Nigeria |
| (b) | Has a permanent place available for domestic use in Nigeria | Has no permanent place available for domestic use in Nigeria |
| (c) | Has a place of habitual abode in Nigeria | Has no place of habitual abode in Nigeria |
| (d) | Has substantial economic and immediate family ties in Nigeria | Has no substantial economic and immediate family ties in Nigeria |
| (e) | Sojourns in Nigeria for not less than 183 days in aggregate in a 12-month period, inclusive of annual leave or temporary absence | Sojourns in Nigeria for less than 183 days in aggregate in a 12-month period, on the same inclusive basis |
| (f) | Serves as a diplomat or diplomatic agent of Nigeria in another country | Is not serving as a diplomat or diplomatic agent of Nigeria in another country |
Limb (a) is the one that does the damage. Domicile is not the same as residence, and a Nigerian domicile of origin is not lost by taking a job in Dubai; it is displaced only by acquiring a domicile of choice elsewhere with the settled intention of remaining there permanently. A five-year contract with a plan to come home does not do that.
Limb (d) is the second trap. “Substantial economic and immediate family ties” is not defined in the Act, and it is written as a single composite condition. A spouse and children in Lagos, or a business interest and a mortgage, are exactly the facts it points at.
Limb (e) also counts differently from most day-count tests. The 183 days are measured “inclusive of annual leave or temporary period of absence,” so an ordinary period of leave taken during a Nigerian stay is not carved out of the count.
How this compares with the tests you may be used to
New Zealand allows you to cease residence on a day count once a dwelling is gone, and South Africa runs a formal cessation declaration, as our guides to New Zealand tax residency and ceasing South African tax residency set out. Nigeria now has no equivalent exit mechanism. There is no departure form, no split-year treatment written into the definition, and no clearance procedure. You are either outside all six limbs or you are not.
Residents Are Taxed on Worldwide Income, With No Remittance Basis
Section 12 states that the income, gains or profits of an individual who is a resident of Nigeria “are deemed to accrue in Nigeria and are chargeable to tax in Nigeria wherever they arise, and whether or not the income, profits or gains have been brought into or received in Nigeria.” The second half of that sentence closes the old argument that money left in a Dubai account is out of reach. The UAE side of the same question is covered in our guide to what a tax-free UAE salary really leaves you owing.
Employment income has its own source rule in section 13(1). It is derived from Nigeria where the employee is a resident of Nigeria, or where the duties are wholly or partly performed in Nigeria and the pay is borne by a Nigerian resident employer, borne by a Nigerian permanent establishment of a non-resident employer, or “not liable to tax in the employee’s country of tax residence.”
Two points follow for a Dubai salary. If you are a resident individual under any of the six limbs, section 13(1)(a) makes the whole package Nigerian-source, full stop. If you are genuinely non-resident and perform no duties in Nigeria, section 13(1)(b) does not engage, because every branch of it requires duties performed in Nigeria. Section 13(5)(b), which catches a Nigerian working abroad where the foreign country exempts the pay, is limited to exemptions granted “under an agreement or diplomatic arrangement to which Nigeria is a party,” so the general absence of UAE personal income tax does not trigger it.
A non-resident is charged under section 17(1) only on income, profits or gains accruing in or derived from Nigeria, with gains taxable where they relate to a Nigerian trade or an asset located or deemed located in Nigeria.
There Is No Nigeria to UAE Treaty You Can Use
Section 121(1) of the Act is explicit: an agreement with a treaty partner “shall have effect upon ratification or domestication by the National Assembly.” Signature alone does nothing.
The Nigeria to UAE agreement, formally the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains, was signed on 18 January 2016. In Nigeria’s own list of covered tax agreements filed under the BEPS Multilateral Convention, it is listed at number 18 with a signature date of 18-01-2016 and an entry-into-force date of N/A. The Federal Executive Council approved it for onward transmission to the National Assembly in January 2024.
The fallback is section 120, unilateral relief. It allows a credit where income of a Nigerian resident derived from outside Nigeria “has been charged to tax in the source country,” capped at the lower of the Nigerian tax attributable to the foreign income and the foreign tax actually paid. Against a state with no personal income tax, the lower of the two is zero. A UAE tax residency certificate from the Federal Tax Authority is still worth holding as evidence of where you live, but with no ratified agreement it has no treaty article to attach to.
Germany’s expatriates are in the same structural position for a different reason, their treaty having expired rather than never having been ratified, as our guide on Germans in the UAE with no tax treaty explains.
What a Resident Actually Pays
The Fourth Schedule to the Act sets the individual rates that apply after the relief allowance and exemptions under section 30(1).
| Band of taxable income | Rate |
|---|---|
| First NGN 800,000 | 0 percent |
| Next NGN 2,200,000 | 15 percent |
| Next NGN 9,000,000 | 18 percent |
| Next NGN 13,000,000 | 21 percent |
| Next NGN 25,000,000 | 23 percent |
| Above NGN 50,000,000 | 25 percent |
An individual earning the national minimum wage is outside section 58 entirely. The eligible deductions in section 30(2)(a) are National Housing Fund contributions, National Health Insurance Scheme contributions, contributions under the Pension Reform Act, interest on a loan to develop an owner-occupied residential house, life insurance or deferred annuity premiums for the individual or a spouse, and rent relief of 20 percent of annual rent paid up to a maximum of NGN 500,000, whichever is lower, on condition that the actual rent is accurately declared.
Rent relief is a problem for a Dubai-based taxpayer specifically. It rewards declaring your rent accurately, and the rent you actually pay is a UAE rent under an Ejari or Tawtheeq contract. Whether that qualifies is not settled anywhere in the Act.
Capital Gains Moved Inside Income Tax, and the Assets Are Worldwide
Section 196 repeals the Capital Gains Tax Act along with the Companies Income Tax Act, the Personal Income Tax Act, the Stamp Duties Act and others, and section 28(2)(a)(v) folds chargeable gains into an individual’s taxable income. Gains are therefore taxed at the Fourth Schedule rates rather than at a separate flat rate.
Section 34(1) then defines chargeable assets as all forms of property “whether situated in Nigeria or not,” including shares, options, rights, debts, digital or virtual assets and incorporeal property generally. Two of its limbs deserve a Dubai reader’s attention.
- Section 34(1)(b) makes any currency other than Nigerian currency a chargeable asset. For a Nigerian tax resident holding dirhams or dollars through a period of naira depreciation, that is not a theoretical provision.
- Section 34(1)(a) carries a share-disposal threshold. Gains on disposing of shares in a Nigerian company are not chargeable where the disposal proceeds in aggregate are less than NGN 150,000,000 and the chargeable gain does not exceed NGN 10,000,000 in any 12 consecutive months. Both conditions must hold. There is also relief for regulated securities lending, and for proceeds reinvested within the same year of assessment in shares of the same or other Nigerian companies, with tax accruing proportionately on the portion not reinvested.
The principal private residence exemption is now once in a lifetime
Section 51 exempts the gain on disposing of a dwelling-house, or part of one, and adjoining non-commercial land up to one acre. Section 51(2) then says the exemption “shall be enjoyed once in the lifetime of an individual.”
That is a fundamental change from a rolling relief for whichever house you actually live in. Anyone who plans to sell a Lagos or Abuja home while abroad and buy another one later should treat the first sale as spending a one-time allowance, not as claiming a routine exemption. Where a property is used partly as a dwelling and partly for a trade, section 51(3) apportions the consideration.
Section 52 exempts gains on tangible movable personal chattels where the consideration in a period of assessment does not exceed NGN 5,000,000 or three times the annual national minimum wage, whichever is higher, with anti-fragmentation rules for connected disposals.
The Tax ID Rule That Reaches Your Nigerian Bank Account
Section 8(2) of the Nigeria Tax Administration Act 2025 requires any person engaged in banking, insurance, stock-broking or other financial services in Nigeria to make the provision of a Tax ID a precondition for opening any account or operating an existing account. The words “or operating an existing account” are what turn this into a live issue for the diaspora, because it applies to accounts you already hold, including domiciliary accounts.
Registration itself is under section 4: every taxable person must register and obtain a Taxpayer Identification. Section 6(1) extends that to a non-resident person who supplies taxable goods or services to any person in Nigeria or derives income from Nigeria, with a proviso that a non-resident deriving only passive income from investment in Nigeria may not have to register but must provide the information the Service prescribes.
Section 13(1) requires a return of income in each year of assessment, without notice or demand, from every taxable person “whether or not liable to pay tax,” and from non-resident persons liable to Nigerian tax under Chapter Two of the Nigeria Tax Act. The return must carry a self-assessment form, income from every source, personal relief and the tax computation, and evidence of payment.
| Default | Administrative penalty |
|---|---|
| Failure or refusal to register (section 100) | NGN 50,000 in the first month, then NGN 25,000 for each month the failure continues |
| Failure to file returns, or knowingly filing incomplete or inaccurate returns (section 101) | NGN 100,000 in the first month, then NGN 50,000 for each month the failure continues |
| Failure to notify a change of particulars within 30 days (section 9) | Penalty under section 112 |
Moving money into and out of those accounts is a separate exercise, covered in our guide to sending money from the UAE. These are monthly accruals, not one-off fines. A Nigerian in Dubai who quietly stops filing is not exposed to a fixed penalty; the exposure grows every month until it is dealt with.
The Order to Do This In
- Test yourself against all six limbs, starting with domicile. Day counting is the last of the six, not the first, and it will not save you if any other limb is satisfied.
- Deal with the “permanent place available for domestic use” before anything else. A flat kept furnished and empty for your visits is precisely what limb (b) describes.
- Assume the treaty does not exist until the National Assembly ratifies it, because section 121(1) says exactly that.
- Do not rely on unilateral relief. Section 120 credits foreign tax actually charged, and the UAE charges none on employment income.
- Get and keep a Tax ID even if you owe nothing, because section 8(2) makes it a precondition for operating an existing Nigerian bank account.
- File annually regardless of liability. Section 13(1)(a) requires a return whether or not you are liable to pay, and the section 101 penalty runs monthly.
- Treat the principal private residence exemption as a one-time asset. Section 51(2) allows it once in a lifetime.
- Track foreign currency positions if you are still resident, since section 34(1)(b) makes non-naira currency a chargeable asset.
What We Could Not Verify
Nigeria’s OECD filing recording no entry-into-force date for the UAE agreement is the list submitted at the time of signature of the Multilateral Convention, so it is a snapshot rather than a live register. The Federal Executive Council approved the agreement for transmission to the National Assembly in January 2024, and we could not confirm from an official source whether ratification or domestication has since been completed. Because section 121(1) makes that step decisive, check the current position with the Nigeria Revenue Service before assuming either answer.
The Act does not define “domicile,” “substantial economic and immediate family ties,” or “permanent place available for his domestic use,” and no implementation guidance published so far sets out how the Service will apply them to a Nigerian working abroad. These are the three limbs on which a diaspora residence position will actually turn, and they are the three least specified.
Whether rent paid under a UAE tenancy contract qualifies for the section 30(2)(a)(vi) rent relief is not addressed in the Act. The provision requires the individual to accurately declare the actual rent paid and other information the relevant tax authority prescribes, which suggests a Nigerian-facing process, but nothing rules a foreign rent in or out.
The commencement date of 1 January 2026 comes from the Federal Government’s own announcement and its transition guidelines. The gazette carries a commencement note of 26 June 2025, the date of assent, so the two dates serve different purposes and the transition guidelines are the document that governs which law applies to which period.
Frequently Asked Questions
When did the Nigeria Tax Act 2025 take effect?
1 January 2026. The Act was assented to and gazetted on 26 June 2025 as Act No. 7 in Official Gazette No. 117, Vol. 112, and the Federal Government confirmed commencement on 1 January 2026 and issued transition guidelines covering which law applies to periods before and after that date.
Am I still a Nigerian tax resident if I live and work in Dubai?
You are a resident individual if any one of six conditions is met: domicile in Nigeria, a permanent place available for your domestic use in Nigeria, a place of habitual abode in Nigeria, substantial economic and immediate family ties in Nigeria, sojourning in Nigeria for not less than 183 days in aggregate in a 12-month period, or serving as a Nigerian diplomat abroad. To be non-resident you must fail all six.
Does being domiciled in Nigeria alone make me a tax resident?
Yes. Domicile is the first limb of the resident individual definition and the limbs are alternatives. Domicile is distinct from residence and a Nigerian domicile of origin is displaced only by acquiring a domicile of choice elsewhere with the settled intention of remaining permanently.
Does Nigeria tax income I keep in a UAE bank account?
If you are a resident individual, yes. Section 12 charges a resident on income, gains and profits wherever they arise “whether or not the income, profits or gains have been brought into or received in Nigeria,” so there is no remittance basis.
Is there a double tax treaty between Nigeria and the UAE?
An agreement was signed on 18 January 2016 but Nigeria’s list of covered agreements filed under the BEPS Multilateral Convention shows no entry-into-force date. Section 121(1) of the Nigeria Tax Act 2025 provides that such an agreement has effect only upon ratification or domestication by the National Assembly.
Can I claim credit for UAE tax against Nigerian tax?
Section 120 allows a unilateral credit only where the foreign income “has been charged to tax in the source country,” capped at the lower of the Nigerian tax attributable to that income and the foreign tax paid. The UAE levies no personal income tax on employment income, so the credit is nil.
What are the Nigerian income tax rates for individuals from 2026?
Under the Fourth Schedule: 0 percent on the first NGN 800,000, 15 percent on the next NGN 2,200,000, 18 percent on the next NGN 9,000,000, 21 percent on the next NGN 13,000,000, 23 percent on the next NGN 25,000,000, and 25 percent above NGN 50,000,000. An individual earning the national minimum wage is outside the charge.
Do I need a Tax ID to keep my Nigerian bank account?
Section 8(2) of the Nigeria Tax Administration Act 2025 requires banks, insurers, stock-brokers and other financial services providers in Nigeria to make a Tax ID a precondition for opening any account or operating an existing account. It applies to accounts already held, not only to new ones.
Do I have to file a Nigerian tax return if I owe nothing?
Yes. Section 13(1) of the Nigeria Tax Administration Act 2025 requires a return in each year of assessment, without notice or demand, from every taxable person whether or not liable to pay tax, and from non-residents liable to tax under Chapter Two of the Nigeria Tax Act.
What is the penalty for not filing a Nigerian tax return from abroad?
Under section 101, NGN 100,000 in the first month the failure occurs and NGN 50,000 for each subsequent month it continues. Failure to register carries NGN 50,000 in the first month and NGN 25,000 for each subsequent month under section 100.
How is capital gains tax charged now that the Capital Gains Tax Act is repealed?
Section 196 repeals the Capital Gains Tax Act and section 28(2)(a)(v) includes chargeable gains in an individual’s taxable income, so gains are taxed at the Fourth Schedule rates. Section 34(1) treats all forms of property as chargeable assets whether situated in Nigeria or not, including shares, debts, digital and virtual assets, and any currency other than Nigerian currency.
Are gains on Nigerian shares always taxable?
No. Under the proviso to section 34(1)(a), gains on disposing of shares in a Nigerian company are not chargeable where the aggregate disposal proceeds are under NGN 150,000,000 and the chargeable gain does not exceed NGN 10,000,000 in any 12 consecutive months. Relief also applies to regulated securities lending and to proceeds reinvested in Nigerian company shares within the same year of assessment, with tax accruing proportionately on any portion not reinvested.
Can I still sell my Nigerian house tax free?
Section 51 exempts the gain on a dwelling-house and adjoining non-commercial land up to one acre, but section 51(2) limits the exemption to once in the lifetime of an individual. A second qualifying sale later in life is not covered.
Official Sources
- National Assembly of Nigeria – Nigeria Tax Act 2025, Act No. 7, Official Gazette No. 117, Vol. 112, 26 June 2025
- National Assembly of Nigeria – Nigeria Tax Administration Act 2025, Act No. 5, Official Gazette No. 117, Vol. 112, 26 June 2025
- Nigeria Revenue Service (Establishment) Act 2025, Act No. 4
- Nigeria Tax Act 2025 gazette text, mirrored by the Gombe State Internal Revenue Service
- The State House, Abuja – new tax laws commence on 1 January 2026 as planned
- Federal Ministry of Finance – transition guidelines for the Tax Acts 2025
- Nigeria’s reservations and notifications under the BEPS Multilateral Convention, listing the UAE agreement signed 18 January 2016
- Nigeria Revenue Service
- UAE Federal Tax Authority – tax residency certificates
Information current as of September 2026. The Nigeria Tax Act 2025 is new law with limited published guidance, the residence limbs turn on undefined terms, and the status of the Nigeria to UAE agreement can change with a single act of the National Assembly. Confirm your position with the Nigeria Revenue Service or a Nigerian tax adviser before relying on any treatment described here.
