Nigerian VAT rates and VAT compliance
VAT rates in Nigeria
The main VAT rate in Nigeria is 7.5% (raised from 5% on 1st Feburary 2020). Only a limited number of supplies are nil-rated, meaning any VAT suffered may be recredited to the tax payer.
The current rates are:
|Rate||Type||Which goods or services|
|7.5%||Standard||All taxable goods and services|
|0%||Zero||Zero rate applies to goods and services including: non-oil exports; commercial aircraft and spare part imports; certain humanitarian initiatives; machinery and equipment used in the solid minerals sector; exports; agricultural equipment; commercial vehicles; basic foodstuffs; postal; residential rents; medical and pharmaceutical supplies; education and related materials; a limited range of financial services; books and newspapers
Nigerian VAT compliance
VAT invoices must include the following information:
- Name, address and tax identification number of the supplier
- Name, address and tax identification number of the customer
- VAT number of the supplier
- Date of supply
- Unique VAT number
- Description of the goods or services provided
- VAT rate, amount charged and gross amount of the invoice
Credit notes are not provided for under the VAT Act, although they are accepted. They should have a unique invoice number, and clearly refer to the invoice being corrected or reversed.
Electronic invoices are not required by the tax authorities. There are no simplified invoice provisions.
Failing to issue VAT invoices may incur a penalty of 50% of the taxable value of the supply.
Time of supply rules
The Nigerian VAT Act does not clearly define the criteria to identify the point at which VAT is due – known as the time of supply. Typically, it is treated as the earlier of the invoice or payment date. The import VAT time of supply is the time of importation.