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
Under Nigeria's 2024 withholding tax regulations, as summarised by PwC, a Nigerian company paying a non-resident individual or company for professional, consultancy, technical or management services deducts 10%, and for non-residents that deduction is treated as the final tax. If you live in a treaty country such as the UK, the treaty may say Nigeria should not tax those fees at all, but the client will usually still deduct unless the issue is settled before payment.
Why the client deducts
Nigerian businesses are required to deduct tax at source from many payments and pay it to the tax authority. PwC's highlights of the Deduction of Tax at Source (Withholding) Regulations 2024, effective 1 July 2024, say everyone except individuals must deduct on eligible transactions, including businesses, government bodies and their agents. A client that fails to deduct can face the tax itself plus penalties, so finance teams deduct by default, including on payments to suppliers abroad. The federal tax authority is now the Nigeria Revenue Service (NRS), which replaced FIRS.
The rates that apply to non-residents
PwC's Nigeria withholding tax table, reviewed on 29 May 2026, gives these rates for non-resident recipients:
| Payment type | Non-resident company | Non-resident individual |
|---|---|---|
| Commission, consultancy, technical, management, professional fees | 10% | 10% |
| Other services | 5% | 5% |
| Royalties | 10% | 5% |
| Rent | 10% | 10% |
| Directors' fees | n/a | 20% |
PwC's regulations summary describes the non-resident rate on professional-type fees as a final tax: the deduction settles your Nigerian tax on that income and you do not file a Nigerian return for it. It also notes that suppliers without a Nigerian tax ID can face twice the designated rate on trading income, and that in practice this affects non-residents, who rarely register. Ask the client which rate it will apply before it pays.
Worked example (illustration only)
You invoice a Lagos company £3,000 for consultancy. It deducts 10%, £300, and pays you £2,700. It should then give you a receipt for the £300 withheld. If it applied a doubled 20% rate because you had no tax ID, you would receive £2,400 instead; that is why clarifying your tax ID status before payment matters.
How a tax treaty changes it
Nigeria has double tax treaties with a limited list of countries. The diaspora tax guide on the NiDCOM site lists 16 in force as at January 2026: Belgium, Canada, China, the Czech Republic, France, Italy, the Netherlands, Pakistan, the Philippines, Romania, Singapore, Slovakia, South Africa, Spain, Sweden and the United Kingdom. There is no treaty with the US or Ireland on that list.
Treaties often limit where service income can be taxed. The UK-Nigeria convention, for example, has no separate article for technical fees; Article 7 makes business profits taxable only in the country of residence unless there is a permanent establishment in the other, and Article 14 does the same for independent professional services unless the person has a fixed base regularly available in Nigeria. A UK-resident freelancer with no base in Nigeria therefore has an argument that Nigeria should not withhold at all. In practice the client will need to be satisfied that treaty relief applies, usually before payment, and you may be asked for proof of residence from your tax authority.
If WHT was deducted and should not have been
If a client has already deducted tax that a treaty says Nigeria should not collect, the money has been paid to the Nigerian tax authority, not kept by the client. Recovering it means a refund claim in Nigeria, which a non-resident individual will find slow, so most freelancers instead fix the position for future invoices. Ask the client for the receipt anyway: it is your proof of what was taken, and in a country with no treaty (such as the US) it may be what supports a foreign tax credit claim. The IRS says the credit generally applies only to foreign income taxes, and that the amount withheld is not necessarily the amount that qualifies.
What to agree before you start
- Ask the client's finance team whether it will withhold, at what rate, and on what basis.
- If you live in a treaty country, ask what the client needs to apply treaty relief, and get a certificate of residence from your tax authority.
- Decide whether your fee is gross (WHT comes out of it) or net (the client grosses up so you receive the full fee), and write it in the contract.
- Agree that the client will send the WHT receipt within a set time; see getting a WHT credit note from a Nigerian client.
- Keep the invoice, contract, payment advice and receipt together for your own tax return.
For the Nigeria-side detail on non-resident companies, see Nigerian withholding tax for non-resident companies. Where you will be taxed overall is covered in a freelancer abroad with Nigerian clients: where is the tax due.
Where Pryme fits
A Pryme Business account opened from abroad lets the client pay you in naira or a foreign currency, and the Finance agent can prepare a record matching each invoice to the amount received and the tax withheld, for you to review.
Questions people ask
Why did my Nigerian client deduct 10% from my invoice?
Nigerian WHT rules require companies to deduct tax from service fees. PwC's summary gives 10% for non-residents on professional, consultancy, technical and management fees.
Is the WHT deducted from a non-resident final?
PwC describes the non-resident rate on professional-type fees as a final tax, so you do not file a Nigerian return for that income.
Can I stop the client deducting WHT under a tax treaty?
Possibly, if you live in a treaty country and have no fixed base in Nigeria, but agree it with the client before payment and provide proof of residence.
Does the US have a tax treaty with Nigeria?
No US treaty appears on the list of treaties in force in the NiDCOM-hosted diaspora guide as at January 2026.
Sources
- PwC: Highlights of the Deduction of Tax at Source (Withholding) Regulations 2024 · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- NGEX Diaspora Guide to Nigeria's Tax Reforms 2026 (NiDCOM) · accessed Oct 2026
- UK-Nigeria Double Taxation Convention (GOV.UK) · accessed Oct 2026
- HMRC HS263: Relief for foreign tax paid (2026) · accessed Oct 2026
- IRS: Foreign tax credit · 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.