Value Added Tax(VAT )Registration

Introduction

It is a civic obligation to pay taxes. If you provide non-exempt products and services in Nigeria, you must register for VAT. Requests must be sent to the Federal Internal Revenue Service (FIRS) or the State Internal Revenue Service, whichever is nearest to the officially registered business address.

Meaning of VAT

Value Added Tax (VAT) can be described as an indirect consumption tax imposed on goods and services, this will be done at each stages of production and at the final sale. The tax is 7.5 percent of the value of the taxable products and services under Nigerian legislation.

Who need to apply for VAT?

According to Section 8 of the Value Added Tax Act amended by the Finance Act 2020, every business must register for VAT with the FIRS within six months of starting operations and failure to do so will attract a penalty of N50,000 for the first month and N25,000 in each subsequent month.

How to apply for VAT in Nigeria?

For a new company, you have to go to the nearest Federal Inland Revenue Service (FIRS). The documents that will be required are as follows;

• Articles and memorandum of Association.
• Certificate of Incorporation.
• Completely filed and officially stamped VAT form 001
• Utility bill
• Application letter with the company letterhead paper.
• Taxpayer Update Form

For an already register business that is not a Limited Liability Company, the only documents needed are:

• Certificate of Incorporation
• Completely filed and officially stamped VAT form 001
• Application letter with the company letterhead paper.
• Utility bill
• Taxpayer Update Form
• Status Report

Registration duration

VAT registration can be done almost immediately or the next day at most. Sometimes, FIRS offices struggles with backlogs so it is possible that the process will be stretched for a week or two

Cost of registration

Registration of VAT in Nigeria is free, but it will be advisable to employ assistant of a professional like Matog in order to avoid mistake while filing or filing wrong documents.

Tax Identification Number (TIN)

The Taxpayer Identification Number (TIN) is a one-of-a-kind number assigned and issued by the Federal Inland Revenue Service to identify a person (individual or company) as a properly registered taxpayer. It is only to be used by that particular taxpayer. Every person who is obligated to remit tax in Nigeria is liable to register for tax purposes. This unique tax number will be used to pay all sorts of taxes in Nigeria.

How to obtain a Tax Identification Number (TIN)

As a business owner in Nigeria, The first step is to apply for a Tax Identification Number (TIN) and VAT registration at your local tax office.

The VAT Registration Form (001) and the Taxpayer Registration Input Form can be obtained from the Tax Office.

Using your company’s letterhead paper, you must also apply for Income Tax Registration and another for VAT Registration. Answers to the following questions will be provided in the Income Tax Registration application:

• Company name
• Registered Office
• Business Location
• Nature of the Company
• Incorporation Date
• Date of business commencement
• Accounting date
• Details of Banker(s)
• Particulars of Shareholders
• Particulars of Directors
• Details of Auditors
• Personal details of Tax representative

The information you give will be used by the tax authority to describe your firm for tax registration purposes. The later application that will be printed on your company’s letterhead paper, is for VAT Registration, as previously mentioned which will be duly signed by any authorized company’s registration.

WANT TO KNOW MORE?

If you are interested in Complying in the Value Added Tax Act as amended by the Finance Act 2019 and Finance Act 2020 , you can reach us today to help.

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