Tax Havens, Treaty Shopping, and the Integrity of Nigeria’s Double Tax Agreement Network

This doctoral study examines the vulnerability of Nigeria's double tax agreement network to treaty shopping and the integrity implications for the country's international tax architecture. Treaty shopping, whereby third-country investors route transactions through treaty partner jurisdictions to obtain withholding tax reductions intended only for genuine residents, is one of the most prevalent forms of international tax avoidance. Nigeria's expanding DTA network, while designed to facilitate genuine bilateral investment, may inadvertently create conduit planning opportunities that reduce withholding tax revenues on dividends, interest, and royalties paid to non-residents. The study systematically maps Nigeria's DTA network against known treaty shopping conduit jurisdictions identified in the OECD BEPS Action 6 literature, developing an original Nigerian treaty vulnerability index for each active treaty. Using bilateral FDI and payments data from the CBN and NBS matched to treaty provisions, the study employs a gravity model framework to identify anomalous FDI routing patterns inconsistent with genuine economic activity, which serve as a proxy for treaty shopping intensity. The introduction of the Principal Purpose Test under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, to which Nigeria is a signatory, is analysed as a quasi-natural experiment for its effect on anomalous routing. The study expects to find significant treaty shopping through selected Mauritius, Netherlands, and United Arab Emirates conduit routes. Theoretical contributions include the Nigerian treaty vulnerability index methodology. Keywords: tax havens, treaty shopping, double tax agreements, BEPS, Principal Purpose Test.