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Imported services

The VAT Act defines imported services to mean services rendered by a nonresident person to a person inside Nigeria.



All exports of non-oil goods are zero- rated.


Exported services are exempt from VAT. The VAT Act defines exported services to mean services rendered by a Nigerian resident or a Nigerian company to a person outside Nigeria.

Refunds to foreigners

There is no VAT refund to tourists on purchases made in Nigeria.

Place, time and value of supplies

Place of supply

There are no specific place of supply rules. Supplies of goods and services in Nigeria are liable for VAT in Nigeria. Supplies made outside Nigeria are outside the scope of Nigerian VAT.

Time of supply

A supply of goods and services shall for the purposes of VAT be deemed to take place at the earlier of the time a tax invoice is issued by the supplier or payment is received by the supplier.

Value of supply

If a supply is for monetary consideration, the amount of the supply with addition of the VAT

chargeable will be equal to the consideration. The prices of goods and services may be stated:

  • exclusive of VAT, in which case output VAT will be calculated at 5% of the VAT-exclusive price;

  • inclusive of VAT, in which case, the tax fraction of 5/105 will be applied to the VAT-inclusive price.

If the supply is for a consideration not wholly consisting of money, the value of the supply is its open market value.

Where a taxable supply is not the only matter to which the consideration in money relates, the supply is deemed to be for such part of the consideration as is properly attributed to the taxable supply.

VAT compliance

Accounting basis and tax periods

VAT is accounted for on an accrual and not a cash basis. A supplier’s liability to account for output tax arises in the taxable period in which the time of supply takes place, irrespective of whether or not the supplier has received payment during that tax period.

A registered person may thus make a claim for an input tax credit in the taxable period during which the taxable supply is made to him, provided he is in possession of a valid VAT invoice from his supplier, irrespective of whether or not he has paid his supplier.

The taxable period will generally commence on the first day of a calendar month and end on the last day of that month.

Returns and payment of VAT

Where a registered person’s output tax exceeds the input tax, the difference

must be paid to the Tax Authorities at the time the return is submitted. Where the input tax exceeds the output tax, such VAT is carried forward as a future credit, as cash refunds are not given in practice.

Where a registered person does not make any supply of goods and services and does not receive any goods or services within a particular taxable period, he must submit a nil return in respect of that tax period.

The due dates for payment of VAT are as follows:

  • taxable supplies – on the submission of the return by the 21st day of the month following the end of a taxable period;

  • importation of goods – on entry for home consumption, when customs duty or excise duty is payable; and

  • notice of assessment – within 30 days of the date of the notice.

Interest and penalties

Interest and/or penalties are charged as follows for the failure to:

  • register for VAT – penalty of N10,000 for the first month of failure and N5,000 for each subsequent month in which the failure continues;

  • file monthly returns – penalty of N5,000 for every month in which the failure continues;

  • remit VAT payable to the FIRS – penalty of 5% and interest charged at the prevailing commercial lending rate (currently about 21% p.a.);

  • issue a tax invoice for taxable goods or services – penalty of 50% of the cost of the goods or services for which the tax invoice was not issued; or

  • collect VAT (by a registered person)

    • penalty of 150% of the VAT not

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