The tax benefits for Free Zone entities are being tightened.
- 2026-2027: Companies can maintain their tax-free status as long as their sales into the Nigerian domestic market do not exceed 25% of their total sales.
- From 2028 onwards: The rules become much stricter. Making any local sales at all will cause the company to lose its tax-free status and become subject to full taxation on all its profits.
- Strategic Advice: Companies like “Company Y” are being advised to restructure their operations by shifting any domestic-focused activities into a separate entity that operates outside the Free Zone to preserve the tax benefits of their export-focused business.
