The 15% Minimum Effective Tax Rate for Large Companies

Nigeria has joined the global move towards a minimum level of corporate taxation. Under the Nigeria Tax Act, 2025, certain large companies must pay tax at an effective rate of at least 15%, regardless of incentives, allowances or exemptions that would otherwise reduce their bill.

Who is caught

• Constituent entities of multinational groups with aggregate group turnover of €750 million or more — aligned with the OECD Pillar Two threshold.
• Any other company with aggregate turnover of ₦50 billion or more in the financial year.

If the company’s effective tax rate falls below 15%, it pays a top-up to bring it up to the minimum.

What the NRS circular says

NRS Information Circular No. 2026/01 (29 June 2026) sets out how the Service will compute companies income tax and the development levy. Among other points, it confirms that losses are carried forward until used but only against profits of the same trade, that losses from digital or virtual asset activities can only be relieved against gains from those activities, and that a company’s share of partnership or joint venture profits is treated as a separate source of income.

Why it matters

• Tax holidays and incentives may no longer reduce tax below 15% for large groups.
• Groups already modelling Pillar Two elsewhere must now add a Nigerian layer.
• Domestic companies above ₦50 billion turnover — even with no foreign parent — are within scope.

What to do now

• Calculate your 2026 effective tax rate on the NRS basis, including the development levy.
• Review incentive claims and capital allowance timing.
• Document how top-up tax, if any, will be computed and paid.
• Coordinate with group tax teams on Pillar Two filings.