CITN Company Taxation
Past Questions
24+ verified Company Taxation past questions for CITN. Step-by-step worked answers in 5 Nigerian languages.
Company Taxation topics (2)
Sample Company Taxation past questions
1. Company Income Tax rate (CIT) for small Nigerian companies (2024 ≤ ₦25m turnover):
- A. 0%
- B. 20%
- C. 30%
- D. 32%
Answer: A
2. PPT applies to:
- A. Banks
- B. Petroleum companies
- C. Schools
- D. Hospitals
Answer: B
3. Companies income tax in Nigeria is governed by the:
- A. CITA
- B. PITA
- C. VATA
- D. CGTA
Answer: A
4. Capital allowances are granted in place of:
- A. Salaries
- B. Depreciation
- C. Rent
- D. VAT
Answer: B
5. Small companies in Nigeria may enjoy a ___ CIT rate.
- A. higher
- B. lower/zero
- C. double
- D. fixed 30%
Answer: B
6. Companies file CIT returns ___ after year end.
- A. never
- B. within a set period
- C. after 5 years
- D. monthly only
Answer: B
7. The standard Companies Income Tax (CIT) rate for large companies in Nigeria is:
- A. 20%
- B. 25%
- C. 30%
- D. 32.5%
Answer: C
AI Explanation
Under CITA, large companies (turnover above ₦100 million) pay CIT at 30%.
8. A 'small company' for CIT purposes has turnover not exceeding:
- A. ₦10 million
- B. ₦25 million
- C. ₦50 million
- D. ₦100 million
Answer: B
AI Explanation
Finance Act amendments to CITA: small companies with gross turnover ≤ ₦25 million are exempt from CIT.
9. Tertiary Education Tax (TET) is imposed at:
- A. 1% of assessable profit
- B. 2.5%
- C. 3%
- D. 5%
Answer: C
AI Explanation
TET, payable by companies (except small companies), is currently 3% of assessable profit.
10. Capital allowances are granted in lieu of:
- A. Salaries
- B. Depreciation (which is disallowed)
- C. Audit fees
- D. Interest
Answer: B
AI Explanation
Tax law disallows accounting depreciation but grants capital allowances (Initial + Annual) on qualifying capital expenditure.
11. Which is a NON-allowable deduction for CIT?
- A. Staff salaries
- B. General provisions for bad debts
- C. Rent of business premises
- D. Office electricity
Answer: B
AI Explanation
General/round-sum provisions are non-allowable. Only specific bad debts proven to be irrecoverable are deductible.
12. A company with 31 December 2025 year-end must file its CIT return by:
- A. 30 June 2026
- B. 31 March 2026
- C. 31 December 2026
- D. 31 January 2026
Answer: A
AI Explanation
CITA requires returns within 6 months of year-end. 31 Dec 2025 year-end → 30 June 2026 filing deadline.
13. Minimum tax provisions apply when:
- A. A company makes high profit
- B. A company has no taxable profit (or pays tax below minimum threshold)
- C. Only listed companies
- D. Only small companies
Answer: B
AI Explanation
Minimum tax (0.5% of gross turnover, with exemptions) ensures a contribution where ordinary CIT would yield zero/low tax.
14. Pioneer Status under IDITRA confers:
- A. Increased tax
- B. A tax holiday (up to 5 years) on qualifying industries
- C. Free office space
- D. Loan guarantees
Answer: B
AI Explanation
Pioneer Status (Industrial Development Income Tax Relief Act) grants tax holiday — initially 3 years, extendable to 5.
15. 'Assessable profit' differs from 'Accounting profit' because of:
- A. Different fiscal years
- B. Tax adjustments — disallowing certain expenses, adding back depreciation, etc.
- C. Currency differences
- D. Audit fees
Answer: B
AI Explanation
Assessable profit = accounting profit ± tax adjustments (add back disallowed expenses & depreciation; deduct non-taxable income).
16. Loss relief for CIT can generally be carried forward:
- A. 2 years
- B. 4 years
- C. Indefinitely (subject to conditions)
- D. Not at all
Answer: C
AI Explanation
Under CITA (as amended), losses can generally be carried forward indefinitely against future profits of the same trade.
17. Group taxation in Nigeria currently:
- A. Is fully allowed
- B. Is generally not allowed; each company taxed separately
- C. Applies only to banks
- D. Only to oil & gas
Answer: B
AI Explanation
Each company in a group files its own returns; full group taxation regime has not been adopted.
18. Withholding tax (WHT) on dividends paid by a Nigerian company is:
- A. 5%
- B. 7.5%
- C. 10%
- D. 15%
Answer: C
AI Explanation
WHT on dividends is 10% (5% in some treaty cases). It is a final tax in the recipient's hands.
19. WHT on consultancy fees paid to a corporate provider is:
- A. 5%
- B. 10%
- C. 15%
- D. 20%
Answer: B
AI Explanation
WHT on professional/consultancy/management fees paid to companies is 10%.
20. Nigeria's transfer-pricing regulations require related-party transactions to be:
- A. Free
- B. At arm's length
- C. At cost-plus 50%
- D. At market premium
Answer: B
AI Explanation
TP Regulations (2018, as amended) require related-party transactions to be priced as between independent parties.
21. Excess Dividend Tax (s.19 CITA) applies when:
- A. Dividends exceed turnover
- B. Dividends are paid out of an amount higher than the taxable profit (subject to exemptions)
- C. Dividends are foreign
- D. Dividends are under ₦1m
Answer: B
AI Explanation
S.19 imposes tax (30%) where dividends are paid out of amounts higher than taxable profit, with exemptions for already-taxed retained earnings.
22. Foreign Tax Credit (FTC) relief is available to a Nigerian company that:
- A. Has paid foreign tax on foreign-source income
- B. Is loss-making
- C. Is unregistered for VAT
- D. Is exempt
Answer: A
AI Explanation
Where foreign-source income has been taxed abroad and is also taxed in Nigeria, FTC (treaty or unilateral) avoids double taxation.
23. Self-assessment under CITA means:
- A. FIRS computes for the company
- B. Company computes its own tax and files accordingly
- C. Tax is fixed by law
- D. Auditor computes the tax
Answer: B
AI Explanation
Self-assessment shifts computation to the taxpayer, subject to FIRS audit and possible additional assessment.
24. Nigeria's CIT is governed primarily by:
- A. PITA
- B. CITA
- C. CGTA
- D. VAT Act
Answer: B
AI Explanation
Companies Income Tax Act (CITA) is the principal statute governing companies' income tax in Nigeria.
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