If you've registered a company with the Corporate Affairs Commission (CAC), you have a Company Income Tax (CIT) obligation. It doesn't matter whether you made a profit, broke even, or haven't started trading yet — the filing obligation exists from the day your company is incorporated.
This guide breaks down everything you need to know about CIT under the Nigeria Tax Act 2025: who pays, how much, when to file, and what happens if you don't.
What Is Company Income Tax (CIT)?
CIT is a tax on the profits of every incorporated company in Nigeria. It applies to all companies registered with the CAC — limited liability companies, public limited companies, and companies limited by guarantee (where applicable). It does not apply to sole proprietorships or partnerships, which are taxed under Personal Income Tax.
CIT is a federal tax administered by the Nigeria Revenue Service (NRS). Every company that earns income or has assessable profits is liable. Even companies that earn nothing must file a nil return.
The New Binary Rate Structure Under NTA 2025
The Nigeria Tax Act 2025 simplified CIT rates into a clean binary system. There are now only two rates:
| Company Category | CIT Rate | Development Levy |
|---|---|---|
| Small company (meets all 3 tests under Section 56) | 0% | Exempt |
| All other companies | 30% | 4% of assessable profits |
Who Is a "Small Company" Under Section 56 NTA 2025?
To qualify for the 0% rate, your company must meet all three of the following tests:
- Gross turnover does not exceed ₦50 million per annum
- Total fixed assets (property, plant, and equipment) do not exceed ₦250 million
- The company is not engaged in professional services (legal, accounting, medical, engineering, management consultancy, etc.)
If you fail even one test, you're in the 30% bracket. There is no "medium company" category anymore.
The 4% Development Levy
Companies that don't qualify as small must also pay a 4% Development Levy on assessable profits, in addition to the 30% CIT. This replaces the old tertiary education tax and is payable alongside CIT.
Example: ABC Trading Ltd has assessable profits of ₦20,000,000 and does not qualify as a small company.
CIT: 30% × ₦20,000,000 = ₦6,000,000
Development Levy: 4% × ₦20,000,000 = ₦800,000
Total tax liability: ₦6,800,000
Filing Deadlines
Timing is critical. Miss the deadline and penalties start accumulating immediately:
- Existing companies: File within 6 months of the end of your accounting year. If your year-end is December 31, your CIT return is due by June 30.
- Newly incorporated companies: File within 18 months of incorporation, or within 6 months of your first accounting year-end — whichever comes later.
Important: The filing deadline applies to both estimated (provisional) returns and actual (final) returns. You must submit a self-assessment with your estimated tax before or at the due date, then follow up with the actual return once audited accounts are ready.
Penalties for Non-Filing
Under Section 128 of the Nigeria Tax Administration Act 2025, the penalties for late filing of CIT returns are:
- ₦100,000 for the first month the return is outstanding
- ₦50,000 for each subsequent month the return remains unfiled
These penalties apply separately to estimated returns and actual returns. If you miss both, you face double penalties. After 12 months of non-filing, that's ₦100,000 + (11 × ₦50,000) = ₦650,000 in penalties alone — before any interest on unpaid tax.
What Documents Are Needed to File CIT?
A complete CIT filing package includes:
- Audited financial statements — prepared by a chartered accountant
- Tax computation schedule — showing how taxable profit was derived from accounting profit
- Capital allowance schedule — claiming depreciation on qualifying assets
- Evidence of tax paid — bank receipts or e-payment confirmations
- CAC annual return — proving the company is in good standing
- Schedule of fixed assets — for small company determination
- Development Levy computation (if applicable)
Common Mistakes Business Owners Make
1. Assuming "No Profit = No Filing"
Wrong. Even if your company made a loss, you must file a nil return. The obligation is triggered by registration, not by profit.
2. Confusing Turnover With Profit
The small company test uses gross turnover (total revenue), not net profit. A company with ₦45M turnover but ₦2M profit still qualifies as small. A company with ₦55M turnover but a net loss does NOT qualify.
3. Filing Late and Ignoring Penalties
Penalties compound monthly. A company that hasn't filed for 3 years may owe over ₦2 million in penalties alone — even if its actual tax liability is ₦0.
4. Not Filing Estimated Returns
Many companies wait until audited accounts are ready. But the law requires you to file an estimated (self-assessment) return by the due date. The actual return with audited accounts can follow, but the estimate must be on time.
5. Not Claiming the Small Company Exemption
If you qualify, you pay 0% CIT. But you must explicitly claim it in your return and provide supporting documents (turnover figures, asset schedule, nature of business). The NRS won't apply it automatically.
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Start filing with Taxly →Bottom Line
Company Income Tax in Nigeria is straightforward once you understand the structure: 0% for qualifying small companies, 30% + 4% Development Levy for everyone else. The key is filing on time — even when you owe nothing — because the penalties for non-filing add up fast.
If you've registered a company with the CAC, you have a CIT obligation. The only question is whether you're meeting it.