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The short answer
Under Nigeria's 2024 deduction-at-source regulations, a Nigerian client deducts 10% from professional, consultancy, technical and management fees paid to a non-resident, as a final tax unless the recipient has a Nigerian taxable presence; PwC's page reviewed in May 2026 still shows 10%. For dividends, interest and royalties, the SA–Nigeria treaty caps the rate at 7.5% (10% for some dividends). For service fees, the treaty's business profits article means Nigeria should tax them only if the SA company has a Nigerian permanent establishment, but claiming that needs the Nigerian tax authority's treaty process.
A South African company invoices a Nigerian client ₦10,000,000 and receives ₦9,000,000. The missing ₦1,000,000 is Nigerian withholding tax, deducted by the client before paying. This guide explains which rates apply, what the tax treaty does, and the documents you need on both sides.
The domestic rates
Nigeria's deduction-at-source regulations took effect on 1 July 2024. According to Mondaq's overview and PwC's highlights:
| Payment to a non-resident company | Rate | Notes |
|---|---|---|
| Professional, consultancy, technical, management fees, commission | 10% | Final tax unless the recipient has a Nigerian tax presence |
| Dividends | 10% | Domestic rate, PwC (May 2026) |
| Interest | 10% | Domestic rate, PwC (May 2026) |
| Royalties | 10% | Companies, PwC (May 2026) |
| Recipient with no Tax ID | Twice the rate | PwC notes this affects non-residents in practice |
Whether the Nigeria Tax Act 2025 changed these rates is not confirmed on the pages we read; PwC's Nigerian withholding page, reviewed 29 May 2026, still shows them. Check the current rate with the client's tax adviser or the Nigeria Revenue Service.
What the SA–Nigeria treaty changes
The treaty was signed on 29 April 2000, entered into force on 5 July 2008 and applies in Nigeria to withholding tax from 1 January 2009. Its caps:
- Dividends (Art. 10)
- 7.5% where the beneficial owner is a company holding at least 10% of the paying company's capital; 10% otherwise.
- Interest (Art. 11)
- 7.5%.
- Royalties (Art. 12)
- 7.5%.
- Service fees
- No separate technical fees article. Business profits (Art. 7) are taxable only in South Africa unless attributable to a permanent establishment in Nigeria. Services create one if they exceed 183 days in aggregate in any twelve-month period (Art. 5(3)(b)).
PwC's table also lists 7.5% for dividends, interest and royalties for South Africa. Under the tax authority's treaty circular, the treaty rate is a cap that applies only where the domestic rate is higher.
Service fees in practice
On the treaty's text, an SA company providing services from South Africa with no Nigerian permanent establishment should not suffer Nigerian tax on those fees. In practice, many Nigerian clients deduct 10% anyway unless they hold an approval from the tax authority. If you want the treaty position applied, raise it before invoicing, not after.
How to claim the treaty rate
FIRS Information Circular 2022/15 (11 May 2022), issued before the authority became the Nigeria Revenue Service, sets out the process. The non-resident submits:
- a certificate of residence endorsed by its home tax authority (from 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 for the type of income (for interest, the loan agreement and Certificate of Capital Importation; for dividends, share evidence and a board resolution);
- a declaration that it is the beneficial owner and has no permanent establishment in Nigeria.
A copy of the approval goes to the Nigerian payer, who then deducts at the treaty rate. The circular's evidence list is written for dividends and interest; ask the NRS what it accepts for service fees.
Labelled examples
Example only.
- Consultancy invoice of ₦10,000,000, no treaty approval: client deducts 10%, ₦1,000,000; you receive ₦9,000,000.
- Royalty of ₦4,000,000 with treaty approval: 7.5% is ₦300,000 instead of ₦400,000 at 10%, a saving of ₦100,000.
- Same consultancy invoice where the client has no Tax ID for you: PwC notes the no-TIN rule doubles the rate in practice, so give the client your Nigerian Tax ID if you have one.
If you do have a Nigerian presence
The final-tax treatment applies where the non-resident has no Nigerian tax presence. If your company has a permanent establishment in Nigeria, for example a branch or service activity above the treaty's 183-day threshold, the profits attributable to it fall into Nigerian tax and the withholding becomes a credit against that liability rather than the end of the matter. PwC's highlights add that a supplier can claim credit for tax deducted even if the customer failed to remit it, and that a customer who issues receipts without remitting is liable with interest and penalties. In that case you will need a Nigerian Tax ID and Nigerian returns; see a Nigerian TIN for an SA company.
Keep the receipt
Under the 2024 regulations the Nigerian payer issues a receipt for tax deducted, showing your name, address and TIN, the nature of the transaction, the gross amount, the tax deducted and the month; PwC says the payer must remit by the 21st of the following month. That receipt is your evidence in South Africa. See claiming Nigerian WHT as a credit in your ITR14. For the Nigerian side in more depth, see Nigerian withholding tax for non-resident companies.
Where Pryme fits
A Pryme Business Account holds NGN, USD, GBP and EUR, so Nigerian clients can pay in naira to local account details (business multicurrency), and invoicing helps you show gross, tax deducted and net on each invoice. Outside Nigeria, Pryme's activities are carried out through regulated partners.
Questions people ask
What WHT rate does a Nigerian client deduct from an SA company's fees?
10% under the 2024 regulations for professional, consultancy, technical and management fees to non-residents, as shown by PwC in May 2026.
Does the SA–Nigeria treaty reduce WHT?
Yes for dividends, interest and royalties (7.5%, or 10% for some dividends). For service fees, Article 7 means Nigeria should tax them only with a Nigerian PE, but you need the authority's approval in practice.
How do I claim the treaty rate in Nigeria?
Under FIRS Circular 2022/15: SARS certificate of residence, a letter to the Executive Chairman, income evidence, and a beneficial-owner and no-PE declaration.
What proof do I get of the tax deducted?
The Nigerian payer issues a WHT receipt with your details, gross amount, tax deducted and month. Keep it for SARS.
Sources
- Mondaq, An overview of the Nigerian withholding tax regulations of 2024 · accessed Oct 2026
- PwC Nigeria, Highlights of the deduction at source (withholding) regulations 2024 · accessed Oct 2026
- PwC Worldwide Tax Summaries, Nigeria: Corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- SARS, Agreement between South Africa and Nigeria for the avoidance of double taxation (signed 29 April 2000, in force 5 July 2008) · accessed Oct 2026
- FIRS Information Circular 2022/15 on claiming tax treaty benefits (11 May 2022, KPMG copy) · 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.