Nigeria VAT non-resident digital services Jan 2022; Jan 2024 for goods

Simplified VAT compliance for foreign e-services and goods sellers & marketplaces

Nigeria has secured the obligation for non-resident providers of goods or digital / electronic services to consumers to register and charge VAT. The follows the example of around seventy countries to implement collections role for VAT and GST on foreign providers or marketplaces for sales to in-country consumers. It is introducing simplified compliance procedures for non-resident providers of digital services from 1 January 2022. These will also be available for foreign sellers or marketplaces for goods from 1 January 2024.

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Nigeria had already introduced VAT on B2C sales in February 2020. But this has now been extended: sales to Nigerian consumers must include local VAT, requiring a VAT registration with the Federal Inland Revenue Service (FIRS); B2B sales will require the Nigerian customer to withhold the VAT and pay directly to FIRS. Therefore if the provider is only making B2B sales, then it will not have to VAT register.

What digital services and physical goods liable to Nigerian VAT?

The Federal Inland Revenue Service makes the following definitions:

• supplies, through digital means, of goods, services, intangibles and other digital products by persons not physically present, located or represented in Nigeria
• It covers both B2B and B2C

Marketplace liabilities

In addition to the underlying suppliers, marketplaces and similar intermediaries may be held responsible for the VAT liabilities. This would require them to VAT register, collect and remit the taxes from Nigerian customers.

Invoicing obligations

Nigeria expects VAT registered business to issue compliant electronic invoices – note an application may be made for delaying this obligation – which should include the following:

• Name and TIN of the supplier
• Description of the goods or digital services
• Date
• Value
• VAT liability

VAT registration threshold

There is a $25,000 VAT registration threshold after which a foreign providers must register immediately in the case of B2C sales. There is no simplified VAT registration process or reduced VAT return set until 2022. They may apply for a Tax Identification Number (TIN) from FIRS. They may choose to appoint a local VAT agent if they wish to assist with reporting and compliance.

Once registered, returns are expected to be filed on a monthly basis. They are due, along with VAT payment, by the 21st of the month following.

VAT Calc’s VAT Filer can accurately populate Nigerian or other country VAT return with verified data from our VAT Calculator or VAT Auditor services

Determining if Nigerian VAT is due

Any provider or liable intermediary must establish if the place of consumption is Nigeria, and VAT therefore due. They may reply on the following:

• Customer billing address
• Customer incorporated in Nigeria
• Nigerian IP address
• Any other similar evidence

Digital services subject to Nigerian VAT