Nigeria: NRS issues virtual asset tax framework, establishes income tax, VAT, and stamp duty obligations

The Nigeria Revenue Service issued Information Circular No. 2026/21 on 31 July 2026, establishing mandatory tax treatment for cryptocurrencies, stablecoins, and NFTs, with a 7.5% VAT on services, 1.5% stamp duty on token conversions, and income tax on disposal gains and rewards.

The Nigeria Revenue Service (NRS) established a comprehensive framework in 2026 to regulate the taxation of virtual assets (VAs), including cryptocurrencies, stablecoins, and NFTs, through  Guidelines on the Taxation of Virtual Assets ( Information Circular No. 2026/21) on 31 July 2026. These guidelines define the legal obligations for individuals, companies, and service providers, mandating the payment of income tax, VAT, and stamp duties on digital transactions.

The guidelines are anchored on several primary tax statutes:

• Section 4 of the Nigeria Revenue Service Establishment Act, 2025.
• The Ninth Schedule to the Nigeria Tax Act, 2025 (NTA).
• Section 79 and the Fifth Schedule to the Nigeria Tax Administration Act, 2025 (NTAA).

The guidelines apply broadly to any person (individual or corporate, resident or non-resident) who acquires, disposes of, exchanges, or deals in VAs; receives income or payments in VA; operates a Virtual Asset Service Provider (VASP) or Peer-to-Peer (P2P) marketplace; or provides services relating to VAs in Nigeria.

Classification of virtual assets and tax treatments

The guidelines categorise VAs into six distinct classes, each with specific tax treatments:

• Category 1: Cryptocurrencies and exchange tokens: Unpegged tokens functioning as media of exchange, stores of value, or units of account (e.g., Bitcoin, Ether, Solana, BNB). Disposal gains are subject to income tax, and transfers are subject to stamp duty.
• Category 2: Stablecoins and payment tokens: Tokens pegged to a fiat currency or asset to maintain a stable value (e.g., USDT, USDC, BUSD, DAI, PYUSD). Gains are subject to income tax, and transfers are subject to stamp duty. Yield-bearing stablecoins fall under Category 4 for their yield component.
• Category 3: Security and investment tokens: Tokens representing ownership of an economic interest in an underlying asset, enterprise, or cash flow (e.g., tokenised equity, revenue-sharing tokens, asset-backed tokens, tokenised bonds). Subject to income tax on disposal gains and stamp duty. Note: The tax exemption on stocks and shares under Section 184(h) of the NTA applies only to tokenised Nigerian stocks and shares, not to all Category 3 tokens.
• Category 4:  Utility and governance tokens: Tokens providing access to a product, platform, or protocol, including those generating staking or DeFi returns (e.g., gaming tokens, access tokens, DAO governance votes). Gains on disposal are subject to income tax, and staking/DeFi/liquidity rewards are taxed as income at the point of receipt.
• Category 5:  Non-fungible tokens (NFTs): Unique digital assets (e.g., digital art, collectables, property NFTs). Tax treatment depends on the economic substance and whether the taxpayer is a creator, investor, or trader.
• Category 6: Central bank digital currencies (CBDCs): Digital fiat issued directly by a central bank (e.g., eNaira, foreign CBDCs). These are treated exactly like fiat currencies and do not trigger VA tax obligations.

Tax obligations: Individuals vs. Companies

• Income tax of individuals (resident): Resident individuals are liable to income tax on all VA gains and receipts. Taxable income includes gains on disposal, employment income or professional fees paid in VA, mining, staking, DeFi rewards, liquidity incentives, royalties, protocol rewards, and taxable airdrops or hard forks. Income is recognised at its Fair Market Value (FMV) in Naira on the date the taxpayer gains unrestricted ownership or control. Employers paying wages in VA must report the remuneration and quantity with its USD FMV on the payment date.
• Income tax of companies (corporate income tax): Companies deriving profits from VA activities are taxable under the NTA (at 30% for non-small companies). Taxable corporate profits include trading, exchange operations, VASP transaction fees, brokerage commissions, custody services, wallet administration, token issuance, mining, staking, DeFi activities, and investment gains. VASPs bear their own corporate income tax liability on revenues, separate from withholding tax obligations.

Non-residents and significant economic presence (SEP)

Non-resident persons (both individuals and foreign companies) deriving income, profits, or gains from VA activities in Nigeria are liable to tax under the NTA and NTAA. The provisions relating to Significant Economic Presence (SEP) and Nigerian-source income apply to VA activities in the same manner as they apply to other digital or physical businesses.

Taxable vs. non-taxable events

Taxable events: Purchase of VA with fiat (stamp duty only); cross-border B2B payments (stamp duty and VAT on fees); sale of VA for fiat or token-to-token swaps; paying for goods/services using VA (VAT applies to the underlying supply); receiving employment, professional, mining, staking, or DeFi rewards; and collateral liquidation on DeFi loan defaults.

Non-taxable events:

• Holding VAs: Unrealised appreciation is not subject to income tax.
• Wallet transfers: Transfers between wallets owned and controlled by the same individual are not disposals, provided beneficial ownership does not change (does not apply to companies, partnerships, trusts, or legal entities).
• Staking lock-up: Committing VA into a staking or validation protocol solely to participate in network operations is not a disposal.
• Minting NFTs: Minting is not a disposal or taxable supply; tax applies only upon the first sale or transfer.
• Tokenisation: Tokenising real-world assets with no change in beneficial ownership is not a disposal.
• Collateralised loans: Funds received under a loan secured by VA are treated as a liability, not taxable income.

VAT and stamp duty applications

• VAT on virtual asset services: Virtual asset transfers themselves don’t incur VAT, but a 7.5% rate applies to services bundled with them—exchange fees, custody, wallet management, brokerage commissions, listing fees, and advisory work. When non-resident VASPs supply these services without charging VAT, the Nigerian recipient must self-assess. The tax is calculated on the fair market value of the asset at transaction time and paid in the currency of the transaction.
• Stamp duty on token conversions: A flat 1.5% stamp duty hits every token-to-fiat and fiat-to-token conversion in Nigeria. The buyer bears it and pays in tokens, which get deducted from their credited balance before settlement. The seller receives full fiat proceeds untouched. The duty locks in at the moment of conversion on Nigerian soil, regardless of whether the tokens leave the country afterwards.

VASP, P2P marketplace obligations

Every VASP and P2P marketplace operator must:

• Enforce obtaining a valid Tax ID (TIN) as a precondition for account activation.
• Deduct/withhold applicable taxes (e.g., 1% WHT on gross disposal proceeds, 10% WHT on passive incomes like staking/mining rewards, and 5% or 10% on professional fees).
• Collect and remit the 1.5% stamp duty and 7.5% VAT on service fees.
• Submit all required statutory returns (under Sections 11, 22, 25, and 28 of the NTAA) and maintain transaction records for at least six years.

Administration, enforcement, and non-compliance penalties

Registration and filing

• Failure to register: NGN50,000 first month, NGN25,000 each month after
• Failure to file returns: NGN100,000 first month, NGN50,000 each month after
• Failure to notify address change: NGN100,000 first month, NGN50,000 each month after

Records and deductions

• Failure to keep books/records: NGN50,000 (companies), NGN10,000 (individuals)
• Failure to deduct tax at source: 40% of amount not deducted
• Failure to remit deducted tax: 10% annually plus CBN Monetary Policy Rate plus unremitted amount

VAT and payment

• False or fictitious VAT refund claim: 100% of claimed amount plus CBN MPR interest
• Non-payment (naira): 10% of amount due plus CBN MPR interest
• Non-payment (foreign currency): 10% of amount due plus SOFR plus spread

Compliance and disclosure

• VASP or P2P marketplace non-compliance: NGN 10,000,000 first month, NGN 1,000,000 each month after
• Failure to respond to tax notices/demands: NGN 100,000 first day, NGN 10,000 each day after
• Failure to disclose facts in taxable instrument: NGN 100,000 administrative penalty, NGN 50,000 fine, and/or three years imprisonment.