Home/ Questions/Q 16865
Next
In Process

Fokona Latest Questions

Stanley
Asked: 2026-03-31T20:19:28+00:00 In:

Do Nigerians in the Diaspora Need to File Taxes in Nigeria Without Having a Physical Business?

1. Please do diasporans also file taxes in Nigeria even when they don’t have any physical business in Nigeria.
2. Does one file annual return if he engages in NGX stock trading?

diaspora tax nigeriafirs tax rulesinternational income nigerianon-resident taxation nigeria

You must login to add an answer.

Need An Account,

2 Answers

  1. Rose
    Contributor Profile Credentials

    Tax in Nigeria is based mainly on RESIDENCE, not nationality. The Law Behind It Under: 👉 Personal Income Tax Act Your tax depends on: ✓ where you live ✓ where your income is sourced PART 1: DIASPORANS — DO THEY FILE TAX IN NIGERIA? Let Me Explain With a Simple Story Mama Ngozi travels to the UK. SheRead more

    Tax in Nigeria is based mainly on RESIDENCE, not nationality.

    The Law Behind It

    Under:

    👉 Personal Income Tax Act

    Your tax depends on:

    ✓ where you live
    ✓ where your income is sourced

    PART 1: DIASPORANS — DO THEY FILE TAX IN NIGERIA?

    Let Me Explain With a Simple Story

    Mama Ngozi travels to the UK.

    She now works and earns money there.

    Question:

    Will Nigeria tax her UK salary?

    👉 NO (in most cases)

    Why?

    Because:

    ✓ she is NOT resident in Nigeria
    ✓ income is NOT earned in Nigeria

    So When Will Diasporans Pay Tax in Nigeria?

    ONLY If:

    1. They earn income FROM Nigeria

    Examples:

    • rent from property in Nigeria
    • salary from Nigerian company
    • business income in Nigeria

    OR

    1. They are still considered tax resident in Nigeria

    (This depends on number of days spent in Nigeria — usually 183 days rule)

    So Final Answer (Diaspora)

    If:

    • you live abroad
    • no Nigerian income

    👉 You generally DO NOT file Nigerian PIT

    If:

    • you earn from Nigeria

    👉 You MUST file tax in Nigeria

    PART 2: NGX STOCK INVESTORS — DO YOU FILE TAX?

    Let’s Be Very Clear

    Trading on:

    👉 Nigerian Exchange Group

    does NOT automatically mean you must file tax.

    Why?

    Because in Nigeria:

    1. Capital Gains on Shares

    Currently:

    👉 Capital gains on listed shares are largely exempt
    (when traded on NGX, subject to conditions)

    2. Dividends

    Dividends are:

    ✓ already taxed at source (10% withholding tax)

    What Does This Mean?

    If You ONLY:

    • buy and sell shares
    • receive dividends

    👉 Tax is already handled

    So Do You Still File Annual Return?

    YES — if:

    • you are resident in Nigeria
    • you have other income (salary, business, etc.)

    NO (or minimal obligation) — if:

    • your ONLY income is stock trading/dividends

    Let Me Be Honest With You

    Many people think:

    “Once I invest, I must file tax”

    Not always true.

    Simple Breakdown

    Diasporan

    • No Nigerian income → No tax filing
    • Nigerian income → File tax

    NGX Investor

    • Only dividends → tax already deducted
    • active income + stocks → file return

    Final Truth

    Tax is not about:

    • where you are from

    It is about:

    ✓ where you earn
    ✓ where you live

    Let Me Leave You With This

    Whenever you’re confused about tax, ask:

    • “Where is this income coming from?”

    That one question…

    Will guide you to the correct answer every time.

    Rose Ejituru

    See less
  2. Ochoyoda
    Intermediate

    Here’s a clear breakdown of your two questions about Diasporans and NGX tax filing: 1. Do Diasporans File Taxes in Nigeria Without Physical Business? It depends on whether they earn income from Nigeria. Under the Personal Income Tax Act: A Nigerian in diaspora ONLY files tax in Nigeria if they earnRead more

    Here’s a clear breakdown of your two questions about Diasporans and NGX tax filing:

    1. Do Diasporans File Taxes in Nigeria Without Physical Business?

    It depends on whether they earn income from Nigeria.

    Under the Personal Income Tax Act:

    A Nigerian in diaspora ONLY files tax in Nigeria if they earn income from Nigeria, such as:

    ✅ Rental income from property in Nigeria

    ✅ Business income in Nigeria

    ✅ Salary from Nigerian employer

    ✅ Dividends from Nigerian companies (in some cases)

    ✅ Interest income from Nigerian investments

    If the diaspora individual:

    Lives abroad

    Earns income abroad only

    Has no Nigerian income

    👉 They do NOT need to file Nigerian Personal Income Tax

    Also, the Federal Inland Revenue Service and State IRS generally tax based on source of income.

    Example

    Nigerian living in UK earning UK salary → ❌ No Nigerian tax

    Nigerian living in UK earning rent in Lagos → ✅ Must file Nigerian tax

    2. Must You File Annual Return If You Trade NGX Stocks?

    If you’re trading on the

    Nigerian Exchange Limited

    Here’s the rule:

    If You Only Buy & Sell Shares

    👉 You typically do NOT need to file tax returns for capital gains

    Because:

    Capital gains from stock trading on NGX are currently exempt

    This is under the Capital Gains Tax Act (shares exemption rule)

    So:

    Buying GTCO shares

    Selling MTN shares

    Trading banks or equities

    👉 Usually no tax filing required for capital gains.

    But You May Still File If You Earn Dividends

    Dividends:

    Already taxed at 10% withholding tax

    This is considered final tax

    So:

    You typically don’t need to file just because of dividends

    When You SHOULD File (Even as NGX Investor)

    You should file if you also have:

    Salary income

    Business income

    Rental income

    Side hustle income

    Then you file normal Personal Income Tax return

    Simple Summary

    Situation

    File Tax?

    Diasporan with no Nigerian income

    ❌ No

    Diasporan with Nigerian income

    ✅ Yes

    Only NGX stock trading

    ❌ Usually No

    NGX dividends only

    ❌ Usually No

    NGX + Salary/Business

    ✅ Yes

    See less