10/07/2026
Greetings dear entrepreneurs!
If you run a registered business in Nigeria with any status either limited, business name or other forms as long as they are registered under CAMA 2020 please, take note of this tax information.
Under the tax law, accounting and practice, we have what we call commencement date in business. And as the words communicate, it simply means the legal date a business commences its business operations and this date is what determines their Accounting/Financial year which is the period of 12 months. This is called the financial year calendar. Accountants/Tax Man call this Accounting Reference Period(ARP)
Under the law, we have two rules to this effect; the first rule is 6/18 month rule while the second rule is 6-month rule.
What this means is that for the 6/18 month rule, upon your business registration, you are expected to choose your commencement date within the first 6 months of your post business registration which will be the start of your business date and file your first tax within the first 12 months of your business commencement date. So, this first rule says you must file your first Tax Returns within the first 18 months of your post incorporation.
For the second rule, it's 6 month rule. This rule says that if your business is registered within the first 6 months of the year(January to June), you must file your first tax return for your business in the same year your business is registered which is going to be the next 6 months of the year your business was registered and no 18 months option for you. But if your business was registered from July to December of a year, you probably enjoy the 18 months rule of first filing since you have the privilege to choose your accounting year within the first 6 months...
The two rules have been in our Tax Law in Nigeria but only the 18 months rule is generally known to people because the second rule has been silent but with the enforcement of the new Tax Law in Nigeria, the two rules have become effective and failure to abide to them and practice the one applicable to your business based on your registration date might lead to penalties.
That's why you need a seasoned Tax Consultant/Practitioner who has the broad understanding of the Tax Law.
Thank you.
