The 2012 worldwide VAT, GST and sales tax guide

482 N IGERIA
The most common practice is the credit method under which the
taxable person may offset the excess input VAT against the output
VAT in the subsequent month.
Input VAT is recoverable if it relates to goods purchased or
imported directly for resale and goods which form the stock-intrade
used for the direct production of any new product on which
the output tax is charged. Refund is also available for input VAT
paid on zero-rated goods and services.
Nondeductible input tax. A taxable person cannot reclaim VAT
paid on goods and services used for nonbusiness purposes. In
addition, input VAT incurred on the purchase of fixed assets and
expenses such as general administration and overhead costs,
cannot be recovered from output VAT. Recovery of input VAT is
not allowed with respect to the supply of services and exempt
supplies.
VAT on capital expenditure must be capitalized together with the
cost of the assets, while VAT on general administration, overhead,
and services must be expensed in a company’s profit-and-loss
account.
Refunds. The FIRS Establishment Act provides for a cash refund
within 90 days, subject to appropriate audit by the FIRS.
G. Invoicing
A taxable person that makes a taxable supply is required to furnish
the purchaser with a tax invoice for that supply, which contains
the following:
• Taxpayer’s identification number
• Name and address
• VAT registration number
• Date of supply
• Name of purchaser or client
• Gross amount of transactions
• Tax charged and the rate applied
• Type of supply
• Quantity of goods and services supplied
• The rate of any cash discount offered
A tax invoice must be issued at the time of supply, regardless of
whether payment is made at the time of supply.
VAT is payable in the currency of the transaction.
H. VAT returns and payments
VAT returns. VAT returns must be submitted monthly on VAT
Form 002. A taxable person is required to submit a VAT return on
or before the 21st day of the month following the month in which
supplies are made. A taxable person must pay the tax due by the
due date when filing the VAT returns. Payment must be made via
a bank certified check or draft through designated banks to the
local tax office which issues a receipt after confirmation of such
payment.
The VAT return must be accompanied by a schedule containing
details of the supplies made and received within the tax period.