Nigeria Enacts High-Level GloBE Minimum Tax Rules

On 6 September 2025, Nigeria’s Tax Act 2025 was published in the Official Gazette. This includes a very high-level Income Inclusion Rule (IIR) and Domestic Minimum Top-Up Tax (DMTT) without any of the detailed GloBE adjustments yet applying.

Section 57(2) applies these rules to:

-a company that is a constituent entity of a multinational entity group with total turnover of at least 750 million euros; or

-any other company with turnover above 50 billion NGN.

IIR

The Tax Act does not provide for the detailed application of the IIR rules as provided in the OECD Model Rules/Guidance.

Section 6(3) of the Act states that where the income tax paid by a non-resident company which is a subsidiary of a Nigerian company or a member of a multinational group of a Nigerian company is less than the minimum effective tax rate (15%), the Nigerian parent company will pay an amount to make that non-resident subsidiary’s income tax equal to the minimum 15% rate. 

There are therefore no detailed GloBE income or adjusted covered tax adjustments, as well as no provisions relating to the detailed application of the rules to UPE, IPEs or POPEs. 

DMTT

Section 57 of the Tax Act applies a domestic minimum top-up tax (DMTT). This applies where the Nigerian effective tax rate is less than 15%. 

The ETR is defined as covered taxes/net income. 

Covered taxes are income tax, petroleum profit tax, hydrocarbon tax paid or payable, development levy and priority sector tax credits.

Net income is defined as the profit before tax in the audited financial statements excluding franked investment income and unrealised gains or losses. Note that there is also an exception for the net income for a life insurance company for premiums and investment income of policyholders.

Note that Section 57(5) also allows a 5% deduction for depreciation and payroll costs when determining net income. 

Whilst this is a high-level DMTT, further details are to be expected to be issued via Regulations. The current DMTT is unlikely to be a QDMTT for GloBE purposes (eg there are none of the OECD mandatory deviations included), and the overall approach of the DMTT does not align with the OECD rules other than at a very high level.