Table of Contents

REGISTRATION AND DEREGISTRATION OF RESIDENT AND NON-RESIDENT PERSONS FOR VALUE ADDED TAX (VAT) IN NIGERIA UNDER THE 2025 TAX REFORMS

Nigeria’s Value Added Tax (VAT) framework has undergone a complete transformation. The Nigeria Tax Act (NTA) 2025 and the Nigeria Tax Administration Act (NTAA) 2025, which took effect on 1 January 2026, have repealed the old Value Added Tax Act and introduced a modernised VAT administration framework. The standard VAT rate remains at 7.5%, but almost everything else has shifted.

For businesses operating in Nigeria—whether resident or non-resident—understanding the registration and deregistration requirements is essential for compliance. Failure to register, charge, and remit VAT correctly can result in significant penalties, interest charges, and potential legal consequences. This guide breaks down everything: who must register for VAT, the registration process, special rules for non-resident persons, the new thresholds, and the requirements for deregistration. Let us get into it.

The Pain Points: Why Businesses Struggle with VAT Registration and Deregistration

The Confusion Over the New VAT Threshold

One of the most significant changes under the NTA 2025 is the increase in the small business VAT threshold. Under the old regime, businesses with an annual turnover exceeding N25 million were required to register for VAT. The new law has increased this threshold to N100 million. However, this does not apply to professional service providers—law firms, accounting firms, consulting firms, and management advisory services are not classified as small businesses regardless of their turnover.

This distinction has created confusion. Many small business owners assume they are exempt from VAT registration simply because they fall below the N100 million threshold. But if they provide professional services, they are still required to register. The consequence? Penalties for non-compliance that can be crippling.

The Non-Resident Registration Requirement

For the first time, non-resident persons supplying taxable goods and services to Nigerian consumers are required to register for VAT, charge it on their invoices, and remit it to the Nigeria Revenue Service (NRS). This includes digital service providers offering streaming platforms, cloud computing, online advertising, software subscriptions, and even crypto exchanges.

Many non-resident businesses are unaware of this requirement. They assume that because they have no physical presence in Nigeria, they have no VAT obligations. This is incorrect. The NTA 2025 explicitly brings non-resident digital and technical service providers into the Nigerian VAT net. The Simplified Compliance Regime portal is being rolled out to support registration and reporting for non-resident suppliers.

The Deregistration Confusion

When a business permanently ceases operations in Nigeria, it is required to deregister for VAT within 90 days of cessation. However, many businesses are unaware of this obligation or fail to act promptly. Failure to notify the tax authority of permanent cessation of business attracts a penalty of N50,000 in the first month and N25,000 in subsequent months.

The Cost of Getting It Wrong

A manufacturing company in Lagos failed to register for VAT upon commencement of business. It operated for 18 months without charging VAT. When the NRS discovered the non-compliance, the company faced a penalty of N50,000 for the first month and N25,000 for each subsequent month. The total penalty exceeded N400,000—money that could have been avoided with proper registration.

Another business in Abuja continued to issue invoices with VAT after its turnover dropped below the threshold. The business had to account for VAT it had charged but could not recover. The lesson is clear: understanding when to register, charge VAT, and deregister is essential for compliance.

Who Must Register for VAT?

Resident Persons

Under the NTA 2025, every person engaged in economic activity in Nigeria is required to register for VAT upon commencement of business. This covers incorporated companies, individuals providing supplies on a habitual basis, and persons exploiting tangible or intangible property for the purpose of obtaining income.

The registration threshold has been significantly increased to N100 million annual gross turnover for small businesses. However, this exemption does not apply to professional service providers, who are required to register and charge VAT regardless of their turnover.

Key Points:

Mandatory registration upon commencement of business, unless the business qualifies as a small business

Small businesses (turnover N100 million or less) are exempt from mandatory registration

Professional service providers are NOT eligible for the small business exemption

Voluntary registration is available for businesses below the threshold

Non-Resident Persons

For the first time, the NTA 2025 requires non-resident persons supplying taxable goods and services to Nigerian consumers to register for VAT. This includes:

Digital service providers (streaming, cloud computing, online advertising)

Software subscriptions and digital content providers

Crypto exchanges and online payment platforms

Online intermediation platforms (marketplaces, ride-hailing, booking services)

Any non-resident person exploiting incorporeal property rights (intellectual property) in Nigeria

Non-residents are not required to appoint a fiscal representative, but must provide a contact address in Nigeria for correspondence. The NRS may also appoint non-resident suppliers or digital platforms as VAT collection agents.

The VAT Registration Process

Step 1: Obtain a Tax Identification Number (TIN)

Before registering for VAT, businesses must have a valid Tax Identification Number (TIN). The VAT number is the same as the FIRS TIN. Under the new unified system, an individual’s NIN serves as their Tax ID, while businesses use their CAC registration number.

Step 2: Prepare Required Documents

The documents required for VAT registration include:

Certificate of Incorporation or Business Registration

Proof of business address (e.g., utility bill, tenancy agreement)

Application letter for VAT registration

Identification documents for directors/owners

Memorandum and Articles of Association (for limited companies)

Bank account details

Step 3: Complete the VAT Registration Form (Form 001)

The application is made using VAT Form 001, which requires details of the business including business name, operations, and expected turnover. The form can be obtained from any NRS office or through the NRS e-services portal.

Step 4: Submit and Await Processing

Once submitted, the NRS reviews the application and documents. If all requirements are met, the NRS issues a VAT registration letter confirming successful registration. The process can be completed within two weeks with professional assistance.

Special Rules for Non-Resident Persons

Simplified Compliance Regime

The NRS has introduced a Simplified Compliance Regime (SCR) portal to support registration and reporting for non-resident suppliers. Businesses with more than USD 25,000 annual turnover from Nigeria are required to register, collect, and remit VAT through this system.

Withholding and Collection Mechanisms

In many cases, Nigerian customers will be obliged to withhold VAT on payments to foreign suppliers and remit it directly to the NRS. However, the NRS may also appoint non-resident suppliers or digital platforms as collection agents.

The NTA 2025 provides that where a non-resident supplier provides taxable supplies to a person in Nigeria, the VAT is withheld and remitted by the Nigerian customer. The NRS is also empowered to appoint any person, including non-resident suppliers, as VAT collectors.

Marketplace Liabilities

In addition to underlying suppliers, marketplaces and similar intermediaries may be held responsible for VAT liabilities. This would require them to VAT register, collect, and remit taxes from Nigerian customers.

VAT Exemptions and Zero-Rated Supplies

Zero-Rated Supplies

Under the NTA 2025, certain goods and services attract VAT at zero percent (0%), meaning no VAT is charged, but input VAT can still be claimed. Zero-rated supplies include:

Basic food items

Medical and pharmaceutical products

Educational books and materials

Fertilizers and agricultural inputs

Electricity generated by GENCOs

Medical services

Exported goods and services

Electric vehicles and parts

VAT-Exempt Supplies

Exempt supplies are not subject to VAT, and input VAT on purchases related to exempt supplies is NOT claimable. Examples include:

Oil and gas exports

Baby products

Military hardware and uniforms

Shared passenger road-transport service

Agricultural equipment

Financial services

Petroleum products

Renewable energy equipment

Deregistration Requirements

When Is Deregistration Required?

A taxable person who permanently ceases operations in Nigeria shall deregister with the NRS within 90 days of cessation. Failure to notify the Service of permanent cessation of business attracts a penalty of N50,000 in the first month and N25,000 in subsequent months.

What Happens When You Deregister?

Upon deregistration, the business must file a final VAT return and pay any outstanding VAT liabilities. Any input VAT credits that have not been claimed may be lost unless a refund is requested within the prescribed timeframe.

Temporary Cessation vs. Permanent Cessation

It is important to distinguish between temporary and permanent cessation. Temporary cessation (e.g., seasonal business) does not require deregistration. Permanent cessation (e.g., liquidation, closure, sale of business) triggers the deregistration obligation.

Penalties for Non-Compliance

Failure to Register for VAT

Failure to register for VAT attracts a fine of:

N50,000 for the first month of default

N25,000 for each subsequent month

Failure to File VAT Returns

Failure to submit VAT returns attracts a penalty of:

N50,000 for the first month

N25,000 for each subsequent month

Under the NTAA 2025, failure to file returns attracts a penalty of N100,000 for the first month and N50,000 for each additional month.

Failure to Remit VAT

Failure to remit VAT attracts:

10% per annum of the amount not remitted

Interest at the Central Bank of Nigeria Monetary Policy Rate

E-Invoicing Penalties

Under the NTAA 2025, non-compliance with e-invoicing requirements attracts significant administrative penalties:

N1,000,000 for the first day that access to deploy technology is denied

N10,000 for each subsequent day

N200,000 for failure to process taxable supplies through the system, plus 100% of the tax due and interest at the CBN Monetary Policy Rate

How Qeeva Advisory Helps You Navigate VAT Registration and Deregistration

We understand that VAT registration and deregistration can be complex. Many businesses struggle with the new thresholds, non-resident requirements, and compliance obligations. Our professionals specialise in tax advisory, regulatory compliance, and VAT administration.

Our Advisory Services Nigeria help you understand your VAT registration obligations, determine your classification, and navigate the registration process. We help you comply with the NTA 2025 with confidence. Our professionals have a high degree of practical, technical and business expertise from diverse disciplines, with skills in the areas of investments, financials, taxation, business investigations, finance, accountancy, corporate advice, acquisitions and valuations.

Our Tax Strategies and Planning services help you structure your business to optimize your VAT position while ensuring full compliance with the new tax laws.

Our Regulatory Compliance services ensure your business meets all filing requirements and stays in good standing with the Nigeria Revenue Service. We help you navigate the complex web of regulations and avoid costly penalties.

Our Bookkeeping Services ensure your records are accurate and complete, supporting your VAT filings and compliance obligations. Our professional bookkeeping services cover the entire scope of bookkeeping, from day-to-day data entry to annual accounts preparation.

Our Risk Management services help you identify and manage risks associated with VAT compliance, including audits, investigations, and disputes.

Our Service Methodology

We do not do generic. We do thorough, transparent, and actionable.

Step 1: VAT Registration Assessment
We assess your business activities, turnover, and classification to determine whether VAT registration is mandatory or voluntary. We identify your obligations under the NTA 2025. This step draws on our Advisory Services Nigeria expertise.

Step 2: Registration Support
We help you prepare and submit the required documentation for VAT registration, including Form 001 and supporting documents. We ensure your application is accurate and complete. Our Regulatory Compliance team ensures your registration meets all regulatory requirements.

Step 3: Non-Resident VAT Advisory
We help non-resident businesses understand their VAT registration obligations, navigate the Simplified Compliance Regime, and comply with Nigerian VAT requirements. Our Tax Strategies and Planning team ensures your compliance strategy is robust.

Step 4: Deregistration Support
We help you navigate the deregistration process when you permanently cease operations in Nigeria. We ensure you file a final return and avoid penalties. Our Risk Management team helps you manage risks associated with deregistration.

Step 5: Ongoing Monitoring and Support
VAT compliance is not a one-time exercise. We help you monitor changes in the law, update your registration status, and stay current with regulatory developments. We provide ongoing support through our Advisory Services Nigeria , Regulatory Compliance , and Bookkeeping Services .

Frequently Asked Questions

Q: Who must register for VAT in Nigeria?
A: Every person engaged in economic activity in Nigeria is required to register for VAT upon commencement of business, unless the business qualifies as a small business with annual turnover of N100 million or less. Professional service providers are not exempt regardless of turnover.

Q: What is the VAT registration threshold under the NTA 2025?
A: The small business VAT threshold has been increased from N25 million to N100 million under the NTA 2025.

Q: Do non-resident businesses need to register for VAT in Nigeria?
A: Yes. Non-resident persons supplying taxable goods and services to Nigerian consumers are required to register for VAT. This includes digital service providers and online platforms.

Q: What is the penalty for failing to register for VAT?
A: Failure to register for VAT attracts a fine of N50,000 for the first month and N25,000 for each subsequent month of default.

Q: When must a business deregister for VAT?
A: A taxable person who permanently ceases operations in Nigeria shall deregister within 90 days of cessation.

Q: What is the Simplified Compliance Regime?
A: The Simplified Compliance Regime is a portal introduced by the NRS to support registration and reporting for non-resident suppliers, with businesses exceeding USD 25,000 annual turnover required to register and remit VAT.

Q: How can Qeeva Advisory help with VAT registration?
A: We provide VAT registration assessment, registration support, non-resident VAT advisory, deregistration support, and ongoing monitoring to help businesses navigate VAT compliance.

The Bottom Line

Nigeria’s VAT registration and deregistration framework has been fundamentally transformed by the NTA 2025 and NTAA 2025. The small business threshold has been increased to N100 million, non-resident persons are now required to register, and the deregistration timeline has been clarified. The penalties for non-compliance are significant.

Understanding your registration obligations is essential for avoiding penalties and maintaining good standing with the Nigeria Revenue Service. Whether you are a resident business, a professional service provider, or a non-resident supplier, you need to understand the rules and comply.

Your job is to be prepared. Understand your registration obligations. Register on time. Charge VAT correctly. Deregister when required. Seek professional guidance.

With the right approach and the right partner, you can turn VAT compliance from a burden into a manageable part of your business operations.

The choice is yours.

Related Services

Our Advisory Services Nigeria are staffed by professionals specialising in tax advisory, regulatory compliance, and VAT administration.

Our Tax Strategies and Planning services help you structure your business to optimize your VAT position.

Our Regulatory Compliance services ensure your business meets all filing requirements and stays in good standing.

Our Bookkeeping Services ensure your records are accurate and complete, supporting your VAT filings.

Our Risk Management services help you identify and manage risks associated with VAT compliance.

Let’s Talk About Your VAT Registration Needs

Navigating VAT registration and deregistration can feel complex. At Qeeva Advisory, we understand the challenges businesses face in understanding their obligations, registering on time, and complying with the new rules.

Whether you need help with registration, deregistration, or ongoing compliance, we are here to support you.

📞 Call us: (+234) 802 320 0801, (+234) 807 576 5799
📧 Email: info@qeeva.com
📍 Visit us: 5, Ishola Bello Close, Off Iyalla Street, Alausa, Ikeja, Lagos, Nigeria

Contact us today to schedule a consultation. Let us help you navigate Nigeria’s new VAT registration regime with confidence.

Your journey to VAT compliance starts with a conversation. Let’s talk.