Non-resident digital suppliers face uncertainty over Nigeria’s e-invoicing – Report

Non-resident digital service providers operating in Nigeria face uncertainty over compliance with the country’s electronic invoicing regime, despite being required to register for Value Added Tax (VAT), charge customers and remit collections to the Nigeria Revenue Service (NRS), according to a report by PwC.

The report titled, “VAT in Africa: Digital Services 2026”, said although Nigeria’s tax laws and policy framework suggest that Non-Resident Taxable Suppliers (NRTSs) fall within the scope of the e-invoicing regime, the revenue authority had yet to clearly define the operational requirements applicable to such entities.

Daily Trust reports that the non-resident digital suppliers are foreign companies—such as streaming platforms, cloud computing services, app stores, and online advertisers—that sell digital products or services to local consumers without having a physical office or permanent establishment in that country.

These companies are required to register for and collect Value Added Tax (VAT) on cross-border transactions to level the playing field with local businesses.

In the newly released report, PwC noted that the uncertainty persisted as of February 2026, when the NRS restricted mandatory e-invoicing compliance to large taxpayers with annual turnover of N5bn and above.

The report said the NRS had not expressly excluded non-resident suppliers from the category, raising the possibility that multinational digital businesses meeting the turnover threshold could technically be covered by the requirement.

It, however, advised affected companies to prepare for possible implementation while seeking formal clarification from the tax authority.

“In light of this uncertainty, NRTSs should proactively prepare for potential implementation,” PwC said, adding that such preparation would position the companies for compliance if the NRS confirms their inclusion and proceeds with enforcement.

The firm also recommended that non-resident suppliers formally engage the NRS to obtain written confirmation that they were not currently required to comply with the e-invoicing mandate and would not face penalties for non-compliance during the period of uncertainty.

The development comes amid Nigeria’s broader tax reforms, which have strengthened the framework for taxing cross-border digital transactions and imposed direct VAT obligations on foreign suppliers serving Nigerian customers.

Daily Trust reports that under Section 150 of the Nigeria Tax Act (NTA), non-resident taxable suppliers providing taxable goods and services to Nigerian customers, including businesses and individual consumers, are required to comply with applicable VAT rules.

The NTA also empowers the NRS to issue guidelines on the form, timing and procedures for returns and payments by non-resident suppliers appointed by the service.

PwC said the NRS’s Simplified Compliance Regime for VAT, which took effect on January 1, 2022, remained relevant pending the issuance of an updated circular reflecting the provisions of the new tax legislation.

Under the regime, non-resident suppliers providing goods, services, intangible assets and other digital products to Nigerian customers through electronic means must register for VAT, obtain a Tax Identification Number (TIN), charge VAT on their invoices and remit the collections to the NRS.

The standard VAT rate is 7.5 per cent, while suppliers are generally required to register when their annual supplies to Nigerian customers reach or exceed $25,000, or its equivalent in other currencies.

Registered suppliers must collect VAT and remit it to the NRS before the 21st day of the following month. Payments are made in the currency of the transaction.

The obligations cover a wide range of digital services, including streaming and downloadable content, online gaming, betting, advertising, cloud computing, online marketplaces, ride-hailing, travel and accommodation bookings, subscription-based social media, electronic learning and automated professional services.

Online ticketing, electronic libraries and online stores are also among the services identified in the report.

PwC explained that where a foreign supplier fails to charge VAT on a taxable business-to-business transaction, the Nigerian customer is required to self-account for the tax and remit it to the NRS.

However, it noted that collecting VAT on business-to-consumer transactions could be more difficult where the non-resident supplier failed to charge the tax.

The report also highlighted provisions allowing non-resident suppliers to claim input VAT incurred on services and fixed assets used to make taxable supplies in Nigeria.

Under Section 155(4) of the NTA, eligible input VAT can be offset against output VAT collected, with only the net amount remitted to the revenue service.

Where input VAT exceeds output VAT, suppliers may carry forward the excess as a credit or apply for a refund, subject to the applicable statutory conditions and timelines.

PwC said the NRS was required to process valid VAT refund requests within 30 days. Refund claims must be submitted within 12 months of the transaction that gave rise to the excess credit.

Beyond VAT, the report identified additional tax considerations for non-resident suppliers, particularly those operating intermediary platforms.

Such platforms are required to fulfil VAT registration, invoicing and filing obligations for sales completed through them, as though they were the actual suppliers. They must also maintain records of transactions involving Nigerian customers.

Although non-resident suppliers may appoint representatives to handle certain administrative responsibilities in Nigeria, PwC stressed that the appointment does not transfer their ultimate tax liability. The suppliers must still register in their own names and remain responsible for meeting their obligations.

The firm also noted that non-resident suppliers based in countries without applicable tax treaties could be liable to Nigerian company income tax on income sourced from the country.

Such companies are required to file income tax returns within six months of the end of their accounting year, with penalties and interest applicable for defaults.