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The short answer
Without a treaty, relief comes from your home country's own law. The United States gives a foreign tax credit for qualifying Nigerian income taxes, capped at the US tax on that foreign income. Ireland, on its own published example, lets you deduct Nigerian tax from foreign rental income where there is no treaty, rather than credit it. Nigeria itself gives its residents a unilateral credit capped at the lower of the Nigerian tax on the income and the foreign tax paid.
Nigeria has comprehensive tax treaties with only 15 countries, so many Nigerians abroad live somewhere with none. Two of the largest communities, in the United States and Ireland, are in that position: the IRS treaty list has no Nigeria entry, and PwC's list of Nigerian treaties (May 2026) does not include Ireland. Our treaty list covers the rest.
No treaty means no tie-breaker and no caps agreed between the two countries. It does not mean you pay full tax twice. Most countries relieve foreign tax unilaterally, under their own law. The method matters, because a credit and a deduction give very different results.
Credit or deduction: the difference
- Credit
- Nigerian tax is subtracted from the tax you owe at home on the same income. Pound for pound, up to a limit.
- Deduction
- Nigerian tax is subtracted from the income before home tax is worked out. You save only your marginal rate on the Nigerian tax.
United States: the foreign tax credit
The IRS foreign tax credit page (updated July 2026) says individuals who paid or accrued foreign income taxes, and are subject to US tax on the same income, can take a credit on Form 1116 or an itemised deduction. Key rules from the IRS pages:
- Only income taxes, war profits taxes, excess profits taxes and taxes in lieu of them qualify. The amount withheld is not necessarily the qualifying amount.
- The credit is limited to US tax multiplied by foreign-source taxable income over total taxable income.
- If your only foreign income is passive, the foreign taxes are $300 or less ($600 joint) and they appear on a payee statement, you can claim without Form 1116, but then nothing carries over.
- Unused credit can be carried back one year and forward ten.
Worked example (illustration only)
Funmi in Houston receives Nigerian rent worth $5,000 after expenses. Her Nigerian corporate tenant withheld 10% ($500). Suppose US tax on that $5,000 is $1,100. If the $500 qualifies and the limit is not reached, she claims a $500 credit and pays $600 of US tax on the rent: total tax $1,100, not $1,600. Taken as a deduction instead, the $500 would reduce taxable income to $4,500 and, at a 22% rate, save only $110.
Ireland: deduction where there is no treaty
Revenue's page on foreign rental income and double taxation gives two examples. With a treaty, foreign tax can be offset against Irish tax: €10,000 of rent, Irish tax on it €4,000, foreign tax €3,500 offset, €500 to pay. With no treaty, you claim a deduction for the foreign tax against the foreign rent instead: €10,000 rent less €2,000 foreign tax leaves €8,000 taxable. Revenue's page covers rent; for Nigerian dividends or interest, check the treatment with Revenue or an adviser.
Nigeria's own unilateral relief
Relief also runs the other way. PwC's Nigeria summary (reviewed 29 May 2026) says a Nigerian resident who pays foreign tax on foreign income can credit it against Nigerian tax on that income, capped at the lower of the Nigerian tax attributable and the foreign tax paid. That matters if you are still Nigerian resident under the wide residence tests while working abroad. PwC's corporate pages say the position differs for companies, which get credit only under treaties.
Documents you will need
Every method depends on proof that Nigerian tax was paid. The 2024 withholding regulations put the duty on the payer to issue a receipt showing the gross amount and the tax deducted. Our guide on Nigerian tax documents for a foreign tax credit covers what each form looks like.
- Withholding tax receipts or credit notes from each Nigerian payer (tenant company, bank, registrar).
- Statements showing the gross income before tax.
- Any Nigerian assessment and payment receipt if you filed with the tax authority.
- The exchange rate you used for each amount; see which rate to use.
- A note of which country you are resident in and why.
Common mistakes
- Claiming a credit for Nigerian stamp duty or bank charges. These are not income taxes.
- Claiming the tax withheld without checking the income itself is declared at home.
- Claiming a credit at home for Nigerian tax that was later refunded to you.
- Leaving the claim until an audit, when payers can no longer reissue receipts.
Where Pryme fits
Tax offices abroad want records they can trust. Pryme customers can generate a regular or verifiable statement or receipt with VerifyDoc.ai; anyone can check that a verifiable one is genuine and unaltered (how it works). It is evidence of money received, not a tax receipt from the tax authority. This page is information, not tax advice.
Questions people ask
What happens if there is no tax treaty with Nigeria?
Each country taxes under its own law, and your home country usually relieves Nigerian tax by a credit or a deduction.
Can I claim Nigerian withholding tax as a US foreign tax credit?
Generally, if it is a qualifying foreign income tax on income you report in the US. Use Form 1116 unless the small passive-income exception applies.
Does Ireland give credit for Nigerian tax?
For foreign rent with no treaty, Revenue's example allows a deduction of the foreign tax rather than a credit. Ireland and Nigeria have no treaty on PwC's list.
What proof do I need for Nigerian tax paid?
The payer's withholding tax receipt or credit note, showing gross amount and tax deducted, plus your statements.
Sources
- IRS: Foreign tax credit (updated 9 Jul 2026) · accessed Oct 2026
- IRS: Foreign tax credit, how to figure the credit (reviewed 9 Jul 2026) · accessed Oct 2026
- IRS: United States income tax treaties A to Z (updated 3 Jan 2026) · accessed Oct 2026
- Revenue: Foreign rental income, double taxation · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, foreign tax relief and tax treaties (reviewed 29 May 2026) · accessed Oct 2026
- PwC Nigeria: Highlights of the Deduction of Tax at Source (Withholding) Regulations 2024 · 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.