Tax ID and tax registration: which authority handles what

In short: Your Tax ID is the reference every tax obligation hangs off, and you need it before you can open most corporate bank accounts, win contracts, or invoice large customers. Registration itself is straightforward. The part that catches people is understanding which tax authority you answer to for which tax.

Federal or state: who you actually deal with

This is the distinction to get right first, because sending a filing to the wrong authority is the same as not filing it.

• The Nigeria Revenue Service (NRS) administers company income tax, value added tax, withholding tax on company payments, and related federal taxes.
• Your state internal revenue service administers personal income tax, which for a business means PAYE on your employees' salaries: plus various state levies.

So a single company with staff deals with both: federal for the company's own taxes, state for its employees'. Which state depends on where the employees are resident, not where the company is registered.

Getting your Tax ID

For a registered company, the Tax ID is normally generated from your CAC registration data, and you complete the tax registration to activate it.

You will need:

1. Certificate of incorporation and the CAC status report.
2. The memorandum and articles of association.
3. The company's registered and operating addresses.
4. Director details and identification.
5. A company bank account, or the application in progress.
6. A completed tax registration form for your tax office.

Register with the tax office that covers your business address. Once active, confirm your Tax ID appears correctly and matches your registered name exactly. A mismatch between your CAC name and your tax record causes problems later with clearance certificates and with customers' withholding tax remittances.

What you register for

Depending on your activity and size, expect to be registered for:

• Company income tax: on the company's profits, filed annually.
• Value added tax: if you supply taxable goods or services. See the VAT guide in this series.
• PAYE: with the relevant state, for employee tax. See the PAYE guide.
• Withholding tax: as an agent, you deduct from certain payments you make to suppliers and remit them.

Registering for the company's federal taxes does not register you for PAYE. That is a separate registration with the state, and it is the one most new employers miss.

Withholding tax: the obligation you carry for others

When your company pays certain suppliers, you may be required to deduct a percentage and remit it to the tax authority on the supplier's behalf, giving the supplier a credit note they use against their own liability.

Three practical consequences:

• It is your default, not the supplier's, if you fail to deduct and remit.
• Your customers will do the same to you. Expect to receive payment net of withholding tax, and to collect the credit notes.
• Those credit notes are money. They offset your own tax. Chase them, file them, and reconcile them against what customers actually deducted.

Businesses routinely lose real value by never collecting the credit notes for tax that was withheld from their invoices.

Filing rhythm

• Annual: company income tax return, with audited financial statements and a self-assessment.
• Monthly: VAT returns, PAYE remittance, and withholding tax remittance.
• As required: transfer pricing and other returns depending on your structure.

A return is due even in a loss-making or dormant year. Filing nil is compliant; filing nothing is not.

Keeping records the authority will accept

• Sales and purchase records supporting every return.
• Payroll records tying to PAYE remittances.
• Withholding tax credit notes, both issued and received.
• Bank statements reconciled to the books.
• Your audited financial statements.

Keep them for the statutory retention period, and keep them in a form you can produce during an audit rather than reconstruct.

Common mistakes

• Registering federally and assuming PAYE is covered.
• A tax record whose name does not match the CAC registration.
• Not deducting withholding tax from suppliers, and carrying the liability yourself.
• Never collecting credit notes for tax withheld from your own invoices.
• Not filing in a loss year, then paying late-filing penalties on a year with no tax due.
• Registering for VAT late after already invoicing taxable supplies.

Verify before you rely on this

Nigeria's tax legislation was substantially reformed in 2025, with changes taking effect from 2026, and administration, rates, thresholds and even the names of the administering bodies may differ from earlier guidance. Confirm the current position with the relevant tax authority or a qualified tax adviser before you register, calculate or file. This guide is not tax advice.