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collected plus 5% interest above Central Bank of Nigeria Monetary Policy Rate.

Time limit for claiming input VAT

In general there appears to be no time limit as to when input VAT can be claimed, as long as such claim is supported by a tax invoice. However, in line with the statute of limitation, which is six years, it is unlikely that any claim in excess of this will be entertained.


Where the allowable input VAT exceeds the output VAT, the registered person is entitled to claim the excess VAT. However, the registered person must set off the excess against the next month’s output tax as there are no cash refunds in practice.

Objections and appeals

Any registered person who disputes an assessment or demand notice issued to him, may appeal to the Tax Tribunal in the prescribed format.

An award or judgment by the Tax Tribunal shall be enforced as if it were a judgment of the Federal High Court on registration of a copy of the award or judgment in the registry of the Federal High Court by the party seeking to enforce the judgment.

Following the decision of the Tax Tribunal, notice of the amount of tax chargeable under the assessment as determined by the Tribunal shall be served by the FIRS on the company or person liable for the tax. Notwithstanding a pending appeal, tax shall be paid in accordance with the decision of the Tribunal within one month of notification of the amount of tax payable.

Any party aggrieved by the Tribunal’s decision may appeal against it on a point of law to the Court of Appeal within 30 days after the date on which



the decision was given, setting out the grounds on which the decision is being challenged.

VAT compliance

Tax invoices

A tax invoice is issued on the supply of taxable goods or services in support of the transaction. The VAT invoice serves as a form of certification that VAT has been levied on a transaction, and as documentary proof supporting claims for input tax by a registered person.

A tax invoice must contain the following particulars:

  • the taxpayer’s identification number;

  • name, address and VAT registration number of the supplier;

  • customer’s name and address;

  • type of supply;

  • description of the goods and services supplied;

  • quantity of goods or extent of services;

  • the rate of VAT;

  • the rate of cash discount offered; and

  • the total VAT payable.

The penalty for failure to issue a tax invoice for taxable goods or services is 50% of the cost of the goods or services for which the tax invoice was not issued.

Credit notes and debit notes

A credit note or debit note is usually issued to take account of a change in the consideration for a taxable supply due to the following circumstances:

  • the cancellation of a supply of goods and services;

  • an alteration or variation in the nature of a supply;

  • a change in the previously accepted consideration for the supply e.g. due to a discount;

  • a short supply of goods;

  • an irrecoverable bad debt arising from a taxable supply that has been written off; or

  • a return of goods to the supplier.

The issue of a credit note or a debit note will form the basis for the requisite adjustment to the relevant VAT return.

The VAT legislation is not specific on what information is to be reflected on the debit and credit notes but such documents should contain sufficient information to identify the original transaction and the VAT invoice to which it relates.

Record keeping

A registered person must keep records and books of all transactions, operations, imports and other activities relating to taxable goods and services sufficient to determine the correct amount of VAT due. Copies of a supplier’s VAT invoices should be kept for a period of at least six years after the completion of the transaction to which they relate.

A general statutory limitation of six years immediately following the last day of the taxable period in which the transaction took place applies to the carrying out of a tax audit to produce records. This time limit can be extended when fraud is suspected to have occurred.

Records may not be kept outside the country. Records should be kept in the form of paper copies as well as in electronic form, where possible. For the purpose of ascertaining the tax liability, FIRS may require the registered person to produce records and copies of VAT invoices for retention, as it may consider necessary.

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