Companies Income Tax (CIT)

  • CIT is governed by Companies Income Tax Act (CITA), Cap C21, LFN 2004 (as amended)
  • CIT is a tax imposed on profit of a company from all sources
  • The rate of tax is 30% of total profit of a company
  • Some profits are exempted from CIT provided they are not derived from trade or business activities carried out by the company e.g. Cooperative society
  • Every company shall pay provisional tax not later than three (3) months from the beginning of each year of assessment which is an amount equal to the tax paid in the previous year of assessment. This is a payment on account of the year’s income tax assessment

The due date for filing returns:

  • For newly incorporated companies, within eighteen (18) months from the date of incorporation or not later than six (6) months after the end of its accounting period, whichever is earlier
  • For existing companies, within six (6) months from the end of the accounting year.
  • A self- assessment filer may (by application) commence payment of instalment before due date but such instalment cannot extend beyond two months after the due date
  • Companies in operation for more than four (4) years are liable to minimum tax except those specifically exempted by the tax law

Minimum Tax under CITA arises where:

  • A company makes a loss
  • A company has no tax payable
  • Tax payable is less than minimum tax​