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The short answer
If you are resident in South Africa and pay tax in Nigeria on Nigerian income, SARS gives a rebate under section 6quat for the Nigerian tax, as long as you cannot get it back from Nigeria. The rebate is capped at the South African tax on that same income, and SARS requires proof of the Nigerian tax. Claim no more than the treaty rate allows Nigeria to charge.
What the credit is for
South Africa taxes residents on worldwide income, so a Nigerian living in Johannesburg can owe SARS tax on rent, interest or dividends that Nigeria has already taxed at source. To stop the same income being taxed twice in full, the Income Tax Act gives a rebate for foreign tax. SARS's Taxation in South Africa 2026 guide describes it as a rebate or deduction for foreign tax "paid or payable" where there is no right of recovery, other than certain rights referred to in section 6quat, and says proof of the foreign tax must be submitted.
The rules that decide the amount
- Only real, final tax. If you could claim the Nigerian tax back (for example, tax withheld above the treaty rate), it is not creditable until you have tried to recover it.
- Capped at SA tax on that income. SARS's residence guide says the credit cannot exceed the South African normal tax payable on the foreign taxable income for the year.
- No credit for income SA does not tax. The same guide says foreign tax on income that is not taxable in South Africa is forfeited.
- Excess credits. The 2009 residence guide describes carrying forward excess credits for up to seven years. That guide is old; confirm the current rule in SARS's Interpretation Note on section 6quat before relying on a carry-forward.
How much Nigeria should have taken
PwC's Nigeria withholding tax summary (reviewed 29 May 2026) lists Nigeria's domestic rate at 10% on dividends, interest and rent, and a treaty cap of 7.5% on dividends, interest and royalties for South African residents. If a Nigerian payer deducted 10% on your dividend when the treaty allows 7.5%, the extra 2.5 points is recoverable in Nigeria rather than creditable in South Africa. To get the treaty rate at source you need a SARS certificate of residence; see how to get a SARS tax residence certificate for Nigeria.
Worked examples (illustrative)
Example 1: Nigerian tax lower than SA tax
Example only. Rent from a Lagos flat, converted, comes to R40,000 for the year. The tenant withheld 10% in Nigeria: R4,000. Assume your marginal SA rate on that extra income is 31%, giving SA tax of R12,400. The credit is the lower of R4,000 and R12,400, so R4,000. You pay SARS R12,400 − R4,000 = R8,400 on that income.
Example 2: Nigerian tax higher than SA tax
Example only. A Nigerian consulting fee of R50,000 bore Nigerian tax of R10,000. SA tax on it at an assumed 18% is R9,000. The credit is capped at R9,000; SA tax on the fee is reduced to nil, and the R1,000 surplus is not refunded by SARS (whether it can be carried forward depends on the current rule).
| Example 1 | Example 2 | |
|---|---|---|
| Foreign income (rand) | R40,000 | R50,000 |
| Nigerian tax paid | R4,000 | R10,000 |
| SA tax on that income | R12,400 | R9,000 |
| Credit allowed | R4,000 | R9,000 |
| SA tax still due | R8,400 | R0 |
Proof SARS accepts
SARS's residence guide lists an assessment or its equivalent, tax receipts, or an official document as proof. For Nigerian income that usually means:
- Withholding tax credit notes or receipts from the tenant, bank or registrar.
- A Nigerian tax assessment and proof of payment if you filed a Nigerian return.
- Statements showing gross income and the tax deducted, matched to the credit claimed.
On the ITR12, foreign tax credits on foreign dividends and interest go next to source codes 4112 and 4113, according to SARS's ITR12 guide (Revision 40). Credits on other foreign income are entered in the Foreign Income section. Keep the documents for five years from submission; uploads must not be password protected. For filling in the return, see how to declare Nigerian income on SARS eFiling.
Common mistakes
- Claiming the gross Nigerian income but not the tax, or the tax but not the gross: SARS matches the two.
- Claiming a credit for tax on income that is exempt in SA, which the residence guide says is forfeited.
- Converting the income at one rate and the tax at another without a reason; keep both on the same basis.
- Losing the withholding tax credit note. Ask your Nigerian bank, tenant or registrar for it each year, not when SARS writes.
Where Pryme fits
A Pryme account keeps naira income in naira and lets you generate a verifiable statement through our partner VerifyDoc.ai, which helps match gross income to tax deducted when SARS queries a credit (statements and receipts, multicurrency account). This page is information, not tax advice.
Questions people ask
Can I claim Nigerian withholding tax on my SARS return?
Yes, if you are an SA resident and the income is taxable in SA. The section 6quat rebate is capped at the SA tax on that income, and you need proof of the Nigerian tax.
What if Nigeria deducted more than the treaty rate?
The excess is recoverable from Nigeria, so it is not a final tax for SARS purposes. PwC lists the treaty cap for SA residents at 7.5% on dividends, interest and royalties.
What source code is used for foreign tax credits on dividends?
SARS's ITR12 guide lists 4112 for foreign tax credits on foreign dividends and 4113 for foreign interest.
Does SARS refund extra foreign tax?
No. The credit cannot exceed SA tax on the foreign income. Check SARS's current section 6quat guidance on whether any excess can be carried forward.
Sources
- SARS: Taxation in South Africa 2026 (dated 30 September 2026) · accessed Oct 2026
- SARS: Guide on the Residence Basis of Taxation for Individuals (Issue 6, May 2009) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- SARS: Comprehensive Guide to the ITR12 Income Tax Return for Individuals (IT-AE-36-G05, Revision 40, effective 29 June 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.