Ng Vat Return

Nigeria VAT Return -- Self-Employed Skill v2.0

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Section 1 -- Quick Reference

Rate Table

Key Thresholds

Conservative Defaults

Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

Minimum viable: Bank statement for the month in CSV, PDF, or pasted text, plus confirmation of VAT registration status and TIN.

Recommended: Sales invoices, purchase invoices with VAT shown, prior period returns.

Ideal: Complete invoice register, TIN certificate, WHT-VAT documentation (for government supplies).

Refusal Catalogue

R-NG-1 -- Below threshold. "Businesses with annual turnover of NGN 25,000,000 or less are exempt from VAT registration and filing. Stop."

R-NG-2 -- International VAT recovery. "Cross-border VAT recovery and transfer pricing implications are outside this skill scope. Escalate."

R-NG-3 -- Corporate tax. "Companies Income Tax (CIT) is a separate obligation outside this skill scope."

Section 3 -- Transaction Pattern Library

3.1 Income Patterns (Credits)

3.2 Expense Patterns (Debits)

3.3 Exempt Supply Indicators

Section 4 -- Worked Examples

Example 1 -- Standard Monthly Return

Input: Taxable supplies NGN 5,000,000. Input VAT from purchases NGN 150,000.

Reasoning: Output VAT: 5,000,000 x 7.5% = NGN 375,000. Input VAT: NGN 150,000 (with valid VAT invoices). VAT payable: 375,000 - 150,000 = NGN 225,000.

Classification: VAT payable NGN 225,000.

Example 2 -- Exporter in Refund Position

Input: Zero-rated exports NGN 10,000,000. Input VAT NGN 300,000.

Reasoning: Output VAT: NGN 0 (zero-rated). Input VAT: NGN 300,000. Excess input: carry forward or claim refund from FIRS.

Classification: Refund/carry forward NGN 300,000.

Example 3 -- Mixed Supplies (Taxable and Exempt)

Input: Taxable supplies NGN 3,000,000, exempt supplies NGN 2,000,000. Total input VAT NGN 200,000 (none directly attributable).

Reasoning: Taxable ratio: 3,000,000 / 5,000,000 = 60%. Claimable input: 200,000 x 60% = NGN 120,000. Output VAT: 3,000,000 x 7.5% = NGN 225,000. VAT payable: 225,000 - 120,000 = NGN 105,000.

Classification: VAT payable NGN 105,000. Flag for reviewer on apportionment.

Example 4 -- Nil Return

Input: No supplies or purchases in the month.

Reasoning: Nil return must still be filed by the 21st. VAT payable = NGN 0.

Classification: File nil return.

Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 VAT Return Computation

5.2 VAT Invoice Requirements (VATA s 10)

Must show: supplier name, TIN, description of goods/services, quantity, price exclusive of VAT, VAT amount, total, date, sequential number. Retention: 5 years minimum.

5.3 Filing and Payment

5.4 Non-Resident Digital Services (VATA s 10A)

Non-resident suppliers of digital services to Nigerian consumers must register and charge VAT. If they do not, the Nigerian recipient may self-account.

5.5 Penalties (VATA s 16-18)

Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Mixed Taxable and Exempt Supplies

When a business makes both taxable and exempt supplies, input VAT must be apportioned. Directly attributable input follows its supply; residual input is apportioned by revenue ratio. Flag for reviewer.

6.2 Non-Resident Services

If a non-resident does not charge VAT, the Nigerian recipient may need to self-account. Flag for reviewer when client purchases services from non-residents.

6.3 Foreign Currency Invoicing

VAT must be computed in NGN. Use CBN exchange rate on the date of supply. Flag for reviewer on exchange rate source and date.

6.4 WHT-VAT on Government Contracts

Government entities may withhold VAT at source. Verify withholding documentation.

Section 7 -- Working Paper Template

NIGERIA VAT WORKING PAPER
Taxpayer: _______________  TIN: ___________
Period: ___________  Month: ___________

A. OUTPUT (SALES)
  A1. Standard-rated supplies (excl. VAT)        ___________
  A2. Output VAT (A1 x 7.5%)                    ___________
  A3. Zero-rated supplies                        ___________
  A4. Exempt supplies                            ___________
  A5. Total supplies                             ___________

B. INPUT (PURCHASES)
  B1. Input VAT on taxable purchases             ___________
  B2. Less: input on exempt supplies             ___________
  B3. Net allowable input VAT                    ___________

C. NET VAT
  C1. VAT payable (A2 - B3)                     ___________
  C2. Or excess credit                           ___________

REVIEWER FLAGS:
  [ ] VAT registration confirmed?
  [ ] All input claims supported by valid VAT invoices?
  [ ] Mixed supply apportionment applied?
  [ ] Nil return filed if no activity?
  [ ] WHT-VAT from government contracts accounted for?

Section 8 -- Bank Statement Reading Guide

Nigerian Bank Statement Formats

Key Nigerian Banking Narrations

Section 9 -- Onboarding Fallback

If the client provides a bank statement but cannot answer onboarding questions immediately:

1. Classify all NIP/NIBSS credits from non-personal sources as potential taxable supplies
2. Apply 7.5% output VAT to all unclassified business income
3. Only claim input VAT where description clearly indicates business purchase
4. Flag all government payments for WHT-VAT review
5. Generate working paper with PENDING flags

Present these questions:

ONBOARDING QUESTIONS -- NIGERIA VAT
1. Are you registered for VAT with FIRS? What is your TIN?
2. What is your annual turnover (above or below NGN 25 million)?
3. What types of goods or services do you sell?
4. Do you make any exempt supplies (basic food, medical, education)?
5. Do you sell to government entities?
6. Do you import goods or services?
7. Do you have valid VAT invoices for all purchase claims?
8. Any excess credit carried forward from prior period?

Section 10 -- Reference Material

Key Legislation

Known Gaps / Out of Scope

• International VAT recovery
• Transfer pricing implications
• Companies Income Tax (CIT)
• Withholding tax on contracts (separate from VAT)

Changelog

Self-Check

• Registration and TIN confirmed?
• Turnover above NGN 25M threshold?
• All input claims supported by valid VAT invoices?
• Exempt supplies identified and excluded from output VAT?
• Nil return filed if no activity?
• Filing by 21st of following month?

PROHIBITIONS

• NEVER charge VAT on exempt supplies (basic food, medical, education, residential rent)
• NEVER claim input VAT without a valid VAT invoice
• NEVER require VAT registration for businesses below NGN 25,000,000 annual turnover
• NEVER apply a VAT rate other than 7.5% (the pre-2020 rate of 5% is no longer applicable)
• NEVER miss the 21st monthly filing deadline -- nil returns are still required
• NEVER claim input VAT on purchases used for exempt supplies
• NEVER ignore self-accounting obligations on imported services from non-residents
• NEVER present calculations as definitive -- always label as estimated and direct client to ICAN/ANAN member

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a chartered accountant (FCA/ACA) or accredited tax practitioner in Nigeria) before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

Source: OpenAccountants — open tax Guides for AI, reviewed by named CPAs/CAs/EAs. Quality: source-cited draft. For always-current figures and named-accountant backing, connect the OpenAccountants MCP server (openaccountants-mcp).