Input VAT
Input VAT is the VAT a business pays on its own purchases of goods and services. Registered businesses offset input VAT against the output VAT they collect from customers, and remit only the difference to FIRS.
Worked example
In one month you collect ₦75,000 of output VAT on sales, and pay ₦20,000 of input VAT on business purchases. You remit ₦55,000 to FIRS, not the full ₦75,000.
What you need to claim it
A valid VAT invoice from your supplier showing their VAT registration number and the VAT charged separately. No invoice, no claim, which is why keeping supplier invoices matters as much as issuing your own.
If you are not VAT registered
You cannot reclaim input VAT. The VAT you pay on purchases is simply part of your cost, and you do not charge VAT on your sales either.
More Nigerian tax terms
- Company Income Tax (CIT)
- Consolidated Relief Allowance (CRA)
- Development Levy
- Direct assessment
- FIRS (Federal Inland Revenue Service)
- Minimum wage tax exemption
- Output VAT
- PAYE (Pay-As-You-Earn)
- Personal Income Tax (PIT)
- Rent relief
- Tax Clearance Certificate (TCC)
- Tax Identification Number (TIN)
- Value Added Tax (VAT)
- Withholding Tax (WHT)
Tax that works itself out
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