CGT: PwC explains how new indirect transfer rules will tax foreign company deals

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Nigeria’s Capital Gains Tax (CGT) regime has been significantly expanded under the Nigeria Tax Act 2025, with foreign company transactions potentially attracting tax in Nigeria even where there is no direct disposal of shares in a Nigerian company.

PricewaterhouseCoopers (PwC), in a report titled: “Nigeria’s Capital Gains Tax reforms: What the new 30% rate and indirect transfer rules mean for investors,” said the new provisions could bring transactions executed outside Nigeria within the country’s tax net, where the value of the foreign company is derived principally from Nigerian assets.

The Nigeria Tax Act 2025, which took effect on January 1, 2026, raises the corporate CGT rate to 30 percent, aligning it with the corporate income tax rate, and expressly provides for the taxation of certain indirect transfers.

Under the new rules, a transaction involving the sale of a foreign company in jurisdictions such as London, Dubai, Amsterdam or Johannesburg could trigger Nigerian CGT where the company derives more than 50 percent of its value, directly or indirectly, from Nigerian assets.

PwC said the development represents a significant departure from the previous tax regime, under which gains from the disposal of shares were generally exempt. Direct disposals of shares in Nigerian companies became subject to CGT at 10 percent from 2022, subject to specified exemptions.

The consultancy noted that Section 17(2) of the Nigeria Tax Act provides that gains derived by a non-resident from the disposal of chargeable assets are taxable in Nigeria where the asset is located, or deemed to be located, in Nigeria.

It added that Section 46(f) treats shares or similar interests in foreign entities as located in…