Withholding Tax (WHT) in Nigeria: rates and credit notes
WHT is tax deducted from a payment and sent to the tax authority. The supplier gets a credit note.
Withholding tax (WHT) in Nigeria is deducted at source by the payer on certain payments and remitted to the tax authority. The Deduction of Tax at Source (Withholding) Regulations 2024, gazetted on 2 October 2024 and effective 1 January 2025, reset the rules. Reported main rates are 5% on professional, management, technical and consultancy fees paid to resident companies (down from 10%), 10% on dividends, interest, rent and royalties, and 10% final tax on such fees paid to non-residents. Small companies are reported to be exempt from deduction on transactions up to NGN 2 million a month where the supplier has a valid TIN. Confirm each rate with NRS before you apply it.
- Payer deducts WHT and remits it to the tax authority.
- Professional and consultancy fees to residents: reported 5% under the 2024 Regulations.
- Dividends, interest, rent, royalties: reported 10%.
- Supplier receives a WHT credit note to offset its own tax.
How it works
Check whether the payment type is covered by the Regulations. Ordinary sales of goods are generally treated differently from services, so ask your adviser about your case.
Calculate WHT on the amount defined by the Regulations. Confirm whether VAT is in the base for your case.
Pay the supplier the net amount and remit the WHT to the right authority by the due date, which is generally the 21st of the following month.
Issue a WHT credit note to the supplier so it can claim the deduction against its tax.
Keep the invoice, the payment record and the credit note together for audit.
Legal framework
- Deduction of Tax at Source (Withholding) Regulations 2024 (effective 1 January 2025).
- Nigeria Tax Act 2025.
- Nigeria Tax Administration Act 2025.
Frequently asked questions
What is the WHT rate for consultancy in Nigeria?
Under the 2024 Regulations, professional, management, technical and consultancy fees paid to resident companies are reported at 5%, down from 10%. For non-residents, 10% is reported and treated as final.
Is there a small business exemption from WHT?
Reports on the Regulations say small companies are exempt from deduction where the supplier has a valid TIN and the monthly transaction value is no more than NGN 2 million. Confirm the current terms.
What is a WHT credit note?
It is the document the payer gives the supplier to show tax was deducted and remitted, so the supplier can offset it against its own tax.
Does 4invoices calculate or remit WHT?
No. 4invoices does not calculate withholding tax, issue WHT credit notes or file with the tax authority. You can add any line and tax rate you decide on to an invoice.
Does 4invoices connect to NRS or the Merchant Buyer Solution?
No. 4invoices creates invoices with a VAT or tax rate per line, supports any currency with an exchange rate, and lets you download a PDF. It does not connect to the tax authority, does not clear or validate invoices, does not issue an Invoice Reference Number and does not file returns. If you must use MBS, use an approved Access Point Provider or system integrator.