The 2012 worldwide VAT, GST and sales tax guide

N IGERIA 481
Group registration. The Nigerian law does not provide for group
registration.
Nonestablished businesses. A nonestablished business carrying
on business in Nigeria is required to register for VAT using the
address of the Nigerian customer with which it has a contract.
Late-registration penalties. The VAT Act provides for a late-registration
penalty of NGN 10,000 for the first month and NGN
5,000 for every subsequent month in which the default continues.
D. VAT rates
The standard rate of VAT is 5% of the invoiced amounts for taxable
goods and services including imported goods. Certain goods
and services are zero-rated or exempt from tax.
The following tables list examples of goods and services that are
exempt and goods and services that are zero-rated (these lists are
not exhaustive).
Examples of exempt supplies of goods and services
All exported goods and services
Medical goods and services and pharmaceutical products
Basic food items
Books and educational materials
Plant, machinery and goods imported for use in free-trade zones
Plant, machinery and equipment purchased for the utilization of
gas in downstream petroleum operations
Tractors, plows and agricultural implements purchased for agricultural
purposes
Services rendered by community banks and mortgage institutions
Plays and performances by educational institutions as part of
learning
Examples of goods and services taxable at 0%
Non-oil exports
Goods and services purchased by diplomats
Goods purchased for humanitarian donor-funded projects
E. Time of supply
The time when VAT becomes due is called the “time of supply.”
The VAT Act does not define “time of supply.” In practice, the
“time of supply” is the date on which the related invoice is issued
or payment is made, whichever is earlier.
F. Recovery of VAT
A taxable person may recover input tax that is charged on business
purchases by offsetting it against output VAT which is
charged on taxable supplies. If the input VAT exceeds the output
VAT, the taxable person is allowed to claim a refund of the excess
input VAT. An input VAT refund may be claimed in any of the
following manners:
• Credit method
• Direct cash refund
• By both credit method and direct cash refund