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The short answer
A Nigerian subsidiary pays dividends to its South African parent after deducting Nigerian withholding tax: 10% at the domestic rate, capped at 7.5% under the Nigeria-South Africa tax treaty, according to PwC's summary reviewed 29 May 2026. To get the treaty rate, the parent files a SARS-endorsed certificate of residence and supporting papers with the NRS. To buy foreign currency for the dividend, the subsidiary's bank will look for the Certificate of Capital Importation issued when the parent's investment came in.
Getting profit out of Nigeria is a tax question and an exchange control question. The tax question is how much Nigerian withholding tax comes off. The exchange control question is whether the subsidiary's bank will sell it the dollars to pay the dividend abroad. Both are easier if the paperwork was set up when the investment was made. This guide is information, not tax or legal advice.
Step 1: declare a dividend properly
The subsidiary needs distributable profits, approved accounts and a board resolution declaring the dividend, in line with its articles and the Companies and Allied Matters Act. Keep the resolution: it is also part of the treaty claim file in Step 3.
Step 2: Nigerian withholding tax
PwC's Nigeria withholding tax summary (reviewed 29 May 2026) lists dividends at 10% for resident and non-resident companies, and shows South Africa among the treaty countries where the rate on dividends, interest and royalties is 7.5%. The page does not discuss changes under the Nigeria Tax Act 2025, so check the current position before you rely on it.
Worked example (illustrative)
| Item | At 10% | At treaty 7.5% |
|---|---|---|
| Dividend declared | ₦200,000,000 | ₦200,000,000 |
| Nigerian WHT | ₦20,000,000 | ₦15,000,000 |
| Net to SA parent | ₦180,000,000 | ₦185,000,000 |
The treaty rate is worth ₦5,000,000 on this dividend. At an invented rate of R0.0110 per ₦1, the ₦185,000,000 net would be R2,035,000 before bank charges and FX margin. The figures are examples.
Step 3: claiming the treaty rate
FIRS Information Circular 2022/15 (11 May 2022), still the published procedure we found, sets out what a non-resident submits to claim a treaty rate:
- A certificate of residence endorsed by the home tax authority (for a South African parent, SARS; see getting a SARS certificate of residence).
- A letter to the Executive Chairman, for the attention of the Director, Tax Policy and Advisory.
- Evidence of the dividend: CSCS statement, share certificate or CAC forms, plus the board resolution.
- A declaration that the parent is the beneficial owner and has no permanent establishment in Nigeria.
The circular says a copy of the approval is given to the withholding agent (the subsidiary), and that the treaty rate is a cap that applies only where the domestic rate is higher. FIRS is now the Nigeria Revenue Service (NRS); check that the NRS still uses this procedure.
Step 4: buying the foreign currency
Foreign investors who brought capital into Nigeria through an authorised dealer bank receive a Certificate of Capital Importation (CCI). Resolution Law Firm's guide describes the CCI as the document that supports repatriation of capital and profits, issued by the bank for capital imported as cash, debt, equity or goods, and says the bank must issue it within 24 hours of importation. If the parent's original investment has no CCI, buying foreign currency to pay a dividend is far harder; fix this first.
Banks operate under the CBN's Foreign Exchange Manual 2026, launched on 16 May and effective 1 June 2026 according to WTS Blackwoodstone. Ask the subsidiary's bank for its current dividend remittance checklist; expect it to want the CCI, the board resolution, the audited accounts and evidence that withholding tax was deducted and paid.
Step 5: the South African side
Keep the WHT receipt and the treaty approval: they support the parent's South African tax treatment of the dividend and any foreign tax credit. How SARS treats a foreign dividend received by a South African company depends on the parent's shareholding and other facts; see tax credits for Nigerian WHT and Nigerian dividends and SARS. The rand amount received will also create section 24I entries if the dividend sat as a receivable over a year end (see section 24I).
What to check first
- That a CCI exists for every tranche of capital the parent sent in.
- That the treaty claim papers are filed before the dividend is paid, so 7.5% rather than 10% is withheld.
- The bank's current documents list and its timeline.
- Whether a management fee or loan repayment would be the better route for some of the cash; see transfer pricing.
Where Pryme fits
A Pryme Business multicurrency account holds NGN and USD side by side, and the Compliance agent prepares document checklists for a person to approve.
Questions people ask
What is the withholding tax on dividends from Nigeria to South Africa?
10% at the domestic rate, capped at 7.5% under the Nigeria-South Africa treaty, according to PwC's summary reviewed 29 May 2026.
How do I claim the treaty rate on Nigerian dividends?
Submit a SARS-endorsed certificate of residence, a covering letter, dividend evidence including the board resolution, and a beneficial-owner and no-PE declaration, as set out in FIRS Information Circular 2022/15.
What is a Certificate of Capital Importation?
The certificate a Nigerian authorised dealer bank issues when foreign capital comes in. It supports later repatriation of capital and profits.
Can I repatriate dividends without a CCI?
It is much harder. Banks rely on the CCI to sell foreign currency for repatriation; sort out a missing CCI with the bank first.
Sources
- PwC Worldwide Tax Summaries: Nigeria corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- FIRS Information Circular 2022/15 on claiming tax treaty benefits (KPMG-hosted) · accessed Oct 2026
- Mondaq (Resolution Law Firm): Procedure for repatriation of capital and profits in Nigeria · accessed Oct 2026
- Mondaq (WTS Blackwoodstone): The CBN's 2026 Foreign Exchange Manual (10 Jul 2026) · 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.