AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Nigeria deducts 10% withholding tax on dividends paid to non-residents, which is the final Nigerian tax for passive investors. If you are Italian tax resident and receive the dividend directly, Italy charges a 26% substitute tax in quadro RM (code H) on the gross dividend, before the Nigerian deduction, and the Italy–Nigeria treaty covers only air and shipping, so there is no treaty rate. Together that can take about 36% of the gross dividend.
Nigerian banks, telecoms and consumer companies pay dividends that attract many diaspora investors. For a shareholder living in Italy the real question is what is left after both tax systems have taken their share.
Step 1: Nigeria deducts at source
PwC's Nigeria tax summary (reviewed May 2026) lists withholding tax on dividends at 10% for resident and non-resident individuals. A Mondaq article on non-resident individuals (30 Sep 2026) says that for non-residents with only passive income such as dividends, "Withholding tax is the final tax and is deducted from all dividend payments", so no Nigerian return is needed for those dividends alone. See withholding tax on Nigerian dividends for non-residents.
No treaty rate for Italy
Some countries' treaties with Nigeria cap dividend withholding at 7.5% or 10%. A Nigerian tax authority circular of May 2022 lists the Italy treaty as in force for air and shipping only. The 10% domestic rate therefore applies to Italian residents. Our article on the Italy–Nigeria tax treaty explains what it covers.
Step 2: Italy taxes the dividend
A commercialista's guide to quadro RM (Fiscomania, May 2025) explains that foreign dividends received without an Italian intermediary are declared in quadro RM, section II-A, line RM31, code H, with a 26% substitute tax. Key points from the guide:
- The 26% applies to the gross dividend, before foreign withholding. The guide notes this reading is debated by commentators on EU-law grounds.
- Code H has no option for ordinary taxation, which is the route that would give a foreign tax credit.
- So, on the guide's reading, the Nigerian 10% is not credited against the Italian 26%.
Worked example
Example only. A Nigerian company declares a dividend; your share is ₦1,000,000 gross.
| Step | Amount |
|---|---|
| Gross dividend | ₦1,000,000 |
| Nigerian withholding at 10% | ₦100,000 |
| Cash received in Nigeria | ₦900,000 |
| Italian substitute tax at 26% of gross | ₦260,000 (declared in euros) |
| Left after both taxes | ₦640,000 |
| Total tax as share of gross | 36% |
Compare this with an Italian dividend, taxed at 26% only. The extra 10% is the cost of no treaty relief. When you judge a Nigerian share's dividend yield, use the after-tax figure.
What this does to the yield
Share-price websites quote dividend yields gross. For an Italian resident, the after-tax yield is what you keep. Example only: a share with an 8% gross dividend yield gives 8% × 64% = 5.12% after Nigerian and Italian tax in the example above, before any change in the naira against the euro. A euro-area share with the same 8% gross yield, taxed at 26% in Italy, would give 5.92%. That gap matters when you compare markets.
Bonus shares and scrip
Nigerian companies sometimes issue bonus shares instead of, or as well as, cash. Nigerian Breweries' 2023 notice, for example, said bonus shares would be credited to beneficiaries with "valid and updated" CSCS accounts. Bonus shares change your cost per share for any later sale, and their Italian tax treatment is not the same question as a cash dividend; ask your adviser and keep the registrar's notice.
Reporting the shares themselves
- Report the shares held through a Nigerian broker in quadro RW each year.
- IVAFE applies at 0.2% a year on most foreign financial products, 0.4% in non-cooperative states (Fiscomania, Jan 2026).
- Not filing RW risks penalties of 3% to 15% of the undeclared value.
- Gains on sale are a separate calculation; see selling Nigerian shares as an Italian resident.
Evidence to keep
- The dividend warrant or registrar's e-dividend notice showing gross amount, tax deducted and net.
- The bank statement showing the net amount received.
- The exchange rate used to convert to euros, as your adviser directs.
- Your CSCS statement showing the shareholding at the qualification date.
Dividends go to the bank account on the registrar's e-dividend mandate. If you have moved and changed banks, update the mandate with the registrar, or payments can sit unclaimed. NGX dividends for investors abroad covers mandates and unclaimed dividends.
Where Pryme fits
A Pryme naira account with local details can be the account on your e-dividend mandate, so payments arrive where you can see them. Keep the money in naira or convert with Swap when you choose; the rate and fee are shown before you approve.
Questions people ask
How much tax do I pay on Nigerian dividends living in Italy?
Nigeria withholds 10%, and Italy charges 26% on the gross dividend when received directly. In our example that is 36% in total.
Can I claim the Nigerian 10% back in Italy?
On a commercialista's reading of the rules, no: code H dividends have no ordinary-taxation option, which is the route giving a credit. Check with your adviser.
Is there a treaty rate for Nigerian dividends paid to Italy?
No. Nigeria lists the Italy treaty as covering air and shipping only.
Where do I declare Nigerian dividends in my Italian return?
In quadro RM, section II-A, line RM31, code H, when no Italian intermediary is involved.
Sources
- PwC Worldwide Tax Summaries: Nigeria, withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- Mondaq: Taxation of non-resident individuals in Nigeria (30 Sep 2026) · accessed Oct 2026
- FIRS Information Circular 2022/15 on claiming tax treaty benefits (11 May 2022, hosted by KPMG) · accessed Oct 2026
- Fiscomania: Redditi esteri nel quadro RM (F. Migliorini, 26 May 2025) · accessed Oct 2026
- Fiscomania: Investimenti finanziari esteri, tassazione e obblighi dichiarativi (F. Migliorini, 27 Jan 2026) · accessed Oct 2026
- Nigerian Breweries Plc: Notification of listing of bonus shares (13 Mar 2023) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.