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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.

Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers. You can receive our regular global VAT and GST news by signing up today!

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

Services covered include any intangible or services delivered via electronic or digital means or similar networks, whose supply is essentially automated, involves minimal human intervention, and is impossible to ensure in the absence of information technology. This excludes broadcast and telecommunications services.

Services covered shall include but not limited to:

  • Streaming, downloading or access to digital content including movies, music, e-books, magazines, news, applications, games, library services or like services;
  • Online gaming;
  • Online ticketing excluding international air travels and freight charges;
  • Online betting services;
  • Online intermediation platform services, including online marketplaces, payment platforms, ride hailing, travel and accommodation booking, rental services or like services;
  • Online advertising services;
  • Subscription based social media platforms including video conferencing applications, instant messaging, chat, dating, image/video sharing or like services;
  • Standardised online education services such as e-learning, webinars or like services;
  • Cloud computing services including cloud storage services;
  • Auction services;
  • Automated online professional and consultancy services
  • Online stores; and
  • E-library.

Africa & Middle East VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Algeria 9% Jan 2020 Nil
Angola 14% Oct 2019
Bahrain 10% Jan 2019 Nil
Cameroon 19.5% Jan 2020 XAF 50 million
Egypt 14% Sep 2016 EGP 500,000
Ghana 12.5% Apr 2022 GHS 200,000
Israel 17% 2022 Proposal in 2021/22 budget
Ivory Coast 18% 2022 -
Kenya 16% Sep 2013 -
Kuwait 5% Jan 2023? - TBC
Mauritius 15% 2020
Nigeria 7.5% Jan 2020 $25,000
Oman 5% Apr 2021 OMR 35,000
Rwanda 18% TBC
Saudi Arabia 15% Jan 2018 Nil
South Africa 15% Jun 2014 ZAR 1 million
Tanzania 18% Jul 2015 TZS 40 million Only resident
Tunisia 19% Jan 2020 Nil Withholding VAT; 3% Royalty Tax
Uganda 18% Jan 2020 Nil
United Arab Emirates 5% Jan 2018 AED 375,000
Zimbabwe 14.5% Jan 2020 Nil

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