Nigeria’s new tax laws have arrived with clear answers to one of the most confusing questions for globally mobile Nigerians: “Do I still owe tax back home if I earn money abroad?”
Whether you’re a doctor in the UK, a software engineer in Canada, a student working part-time in Germany, or a digital nomad serving clients in Dubai, this affects you directly. The answer, however, isn’t simply yes or no, it depends on where you truly “belong” according to the law.
The Simple Truth: It’s About Where You Live, Not Where You Work
Here’s the key principle: Nigeria taxes you based on residency, not citizenship. If you’re considered a tax resident of Nigeria, you owe tax on all your income worldwide, whether you earn it in Lagos, London, or Los Angeles. But if you’re no longer a Nigerian tax resident, you only pay tax on income that comes from Nigeria itself.
Are You Still a Nigerian Tax Resident?
According to the new Tax Act, 2025, you’re considered a Nigerian tax resident if any of these apply:
The 183-Day Rule: You spend 183 days or more in Nigeria during any tax year (roughly 6 months)
The Permanent Home Test: You maintain a permanent home in Nigeria and intend to return, even if you’re temporarily abroad.
Real-Life Examples
Scenario 1: Kemi, the UK Doctor Kemi moved to London in 2020 for her medical residency. She visits Nigeria twice a year for 2 weeks each time (28 days total). She sold her Lagos apartment and has no permanent home in Nigeria. Result: Not a Nigerian tax resident. She only pays Nigerian tax on any Nigerian income (like dividends from Nigerian investments).
Scenario 2: Tunde, the Remote Worker Tunde works for a Canadian tech company but lives in his family house in Abuja. He travels to Canada 4 times a year for meetings (60 days total abroad). Result: Nigerian tax resident. The new laws demands that he pay Nigerian tax on his full Canadian salary.
Scenario 3: Adaora, the Graduate Student Adaora is studying in Germany and works part-time at a local restaurant. She keeps her Lagos apartment and comes home every December for 3 weeks. She’s been in Germany for 8 months this year. Result: Likely still a Nigerian tax resident (she maintains a permanent home and intends to return). Her German earnings are taxable in Nigeria.
Special Rules for Employment Income Abroad
If you work for a foreign employer while living abroad but are still a Nigerian tax resident, your salary is generally taxable in Nigeria. However, there’s an important exception:
Your foreign employment income is exempt from Nigerian tax if ALL of these conditions are met:
- You spend at least 183 days working abroad
- Your employer is not a Nigerian company
- The income is paid abroad (not through a Nigerian entity)
This rule prevents double taxation for genuine expatriate employees while ensuring Nigerians working abroad for Nigerian companies still contribute.
What This Means in Practice
Example 1: Chidi, the Consultant Chidi works for a UK consulting firm and is based in London for 200 days this year. He maintains a home in Lagos but his UK salary is paid directly to his UK bank account by his UK employer. Result: His UK salary is exempt from Nigerian tax, even though he’s still a Nigerian tax resident.
Example 2: Funmi, the Remote Developer Funmi works remotely for a US tech company but lives in Lagos. She occasionally travels to the US for meetings (30 days total). Result: All her income is taxable in Nigeria because she performs her work from Nigeria.
Double Taxation: Don’t Worry, You’re Protected
One of the biggest fears for Nigerians earning abroad is being taxed twice on the same income. The good news? Nigeria has protection against this.
Double Taxation Agreements (DTAs)
Nigeria has tax treaties with several countries, including United Kingdom, France, South Africa, Canada, Belgium, Netherlands, and other Ecowas countries
These agreements typically mean that tax paid abroad can be credited against your Nigerian tax liability. It also means that you won’t pay more than the higher of the two tax rates and that some income types may only be taxed in one country
Universal Relief (Even Without Treaties)
Even for countries without formal agreements, Nigeria’s law allows you to credit foreign taxes paid against your Nigerian tax bill. You just need proper documentation.
What You Need to Keep:
- Foreign tax certificates
- Payslips showing tax deductions
- Official statements from foreign tax authorities
- Bank statements showing tax payments
Special Income Types: What You Need to Know
1. Foreign Pensions
If you receive a pension from abroad but are still a Nigerian tax resident, that pension is taxable in Nigeria. There’s no special exemption just because it’s a pension.
2. Remote Work Income
Working remotely for a foreign company while living in Nigeria? All that income is taxable in Nigeria, regardless of where your client is based or where the payment is deposited.
3. Stock Options and Shares
If you get stock options through foreign employment and you’re a Nigerian tax resident, any gains when you exercise or sell those options are taxable in Nigeria.
4. Investment Income
Dividends, interest, and rental income from foreign investments are taxable in Nigeria if you’re a tax resident, but you can credit any foreign taxes paid on the same income.
When You Might Still Owe Tax in Both Countries
Sometimes, despite all the reliefs and agreements, you might still owe some tax in both countries. This usually happens when one, the other country’s tax rate is higher than Nigeria’s. Two, different countries have different rules about what constitutes taxable income. And three, there are timing differences in when income is recognized.
In this situation, you should first, determine your residency status in both countries. Then, Check if a Double Taxation Agreement applies and what it covers. Claim credit for foreign taxes paid using proper documentation. File your Nigerian tax return even if you think no additional tax is due. And as always, keep detailed records of all income and taxes paid abroad.
Common Questions and Answers
Q: I work abroad but send money to family in Nigeria. Does this create a tax obligation?
A: Sending money to Nigeria doesn’t create tax liability. What matters is where you earn the income and your residency status.
Q: I’m planning to move abroad permanently. How do I stop being a Nigerian tax resident?
A: You need to establish that you no longer spend 183+ days in Nigeria and don’t maintain a permanent home here with intention to return. Consider formally notifying the tax authorities of your change in residency.
Q: What if I earn income in multiple countries?
A: Each country’s income is evaluated separately. You may be able to claim foreign tax credits for each country’s taxes against your Nigerian liability.
Q: Do I need to file a Nigerian tax return if I don’t owe additional tax? A: Yes, if you’re a Nigerian tax resident, you must report your worldwide income even if foreign tax credits eliminate your Nigerian tax liability.
Real-Life Scenarios
Scenario 1: Emeka, the Investment Banker Emeka works for a UK bank in London. He’s there 250 days a year but keeps his Lagos apartment and visits family regularly. His UK salary is £80,000, and he pays £20,000 in UK tax.
Tax Result: He’s a Nigerian tax resident, but his UK employment income is exempt because he meets the 183-day foreign employment rule.
Scenario 2: Ngozi, the Freelance Designer Ngozi lives in Lagos but has clients in the US, UK, and Germany. She earns $50,000 annually from these clients.
Tax Result: All income is taxable in Nigeria because she performs the work from Nigeria. Any foreign taxes withheld can be credited against her Nigerian tax bill.
Scenario 3: Olumide, the Dual Life Olumide splits his time between Lagos and New York, spending 6 months in each location. He earns income in both countries.
Tax Result: He’s likely a tax resident in both countries and will need to navigate the US-Nigeria tax treaty to avoid double taxation.
What You Should Do Right Now
- Track your days – Keep a record of time spent in Nigeria vs. abroad
- Document your ties – Note where you have a permanent home, family, and business interests
- Keep tax records – Save all foreign tax certificates and payment evidence
- Review your situation annually – Residency can change as circumstances change
- File Nigerian returns – Even if you don’t expect to owe additional tax
- Seek professional help – Tax residency can be complex, especially for border-line cases
The Bottom Line
Nigeria’s new tax laws recognize that we live in a global economy where people work across borders. The system is designed to be fair, if you’re truly living and working abroad, you’re only taxed on Nigerian income. But if you maintain significant ties to Nigeria, you contribute to the country that provides you with citizenship benefits and opportunities.
The key is understanding where you stand and planning accordingly. Tax residency isn’t about where you hold a passport, instead, it’s about where you actually live and belong. Ultimately, the rules are about more than just counting days. They’re about recognizing that tax obligations come with the benefits of belonging to a community. Whether you’re building a life abroad or maintaining roots at home, knowing your status helps you make informed decisions about your global career and financial planning.
How Taxpal Can Help with Your Global Income
Managing tax obligations across multiple countries can be complex. Taxpal provides specialized support for globally mobile Nigerians, including:
- Residency status assessment to determine your tax obligations
- Foreign tax credit calculations to avoid double taxation
- Documentation guidance for claiming foreign tax reliefs
- Multi-country tax planning to optimize your global tax position
- Filing support for Nigerian returns with foreign income
Visit their website to choose between consultations or portal access, and let them help you navigate your global tax obligations with confidence. Whether you’re working abroad or earning from multiple countries, Taxpal will ensure you’re compliant while minimizing your overall tax burden.
