The federal government of Nigeria and Qatar have signed an agreement for the avoidance of double taxation on income and capital gains for investments between the two countries. In addition to the elimination of double taxation on business income, similar treaties between Nigeria and other countries provide for a lower withholding tax rate of 7.5% on interest, dividend, royalty and rent payable from Nigeria.
The corporate income tax rate is 30% in Nigeria and generally 10% in Qatar. Nigeria’s withholding tax rate on investment income is 10% while in Qatar it is 7%. In the case of individuals, the tax rate is up to 24% in Nigeria (before reliefs) while in Qatar there is no income tax on salaries, wages and allowances. Self employed individuals may however be subject to tax.
Unless this agreement leads to a significant increase in investments that would not otherwise have happened, it may well be that Nigeria is giving up so much to close this deal.
Based on the laws of Nigeria, the treaty must be ratified by the National Assembly to become effective. On 19 January 2016, Nigeria signed a similar agreement with the UAE, a jurisdiction with no tax on income.