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VAT Under The NTA 2025: What Digital Platforms And Fintechs Need To Know

Introduction

Nigeria’s digital economy is booming. With over 100 million internet users and a digital economy contributing over 10% to GDP, the country stands as one of Africa’s largest digital markets. But with this growth comes a new reality: the taxman is paying attention .

The Nigeria Tax Act (NTA) 2025, which took effect on January 1, 2026, represents a comprehensive overhaul of Nigeria’s tax system. About 70 fragmented tax laws have been condensed into four statutes, and the Nigeria Revenue Service (NRS) is already operational. For founders, operators, and investors across e-commerce, fintech, logistics, SaaS, and marketplace ecosystems, the latest reforms reshape compliance obligations in practical ways .

The NTA expands VAT obligations for non-resident suppliers, introduces a broader and more enforceable Significant Economic Presence (SEP) test, and clarifies the taxation of SaaS, cloud services, digital advertising, and other remote services . This article breaks down what the new VAT rules mean for your digital platform or fintech, how to stay compliant, and where the new opportunities lie.

What Counts as a Taxable Supply for Digital Platforms?

VAT only applies when a transaction qualifies as a taxable supply. If a good or service is not exempt or zero-rated, it is subject to VAT at the rate of 7.5% under the NTA 2025 .

A supply is considered taxable when any of the following conditions are met:

Goods are located in Nigeria at the time of supply, or when a Nigerian taxable person holds exercisable rights over those goods in Nigeria.
Services are provided to, consumed by, or otherwise enjoyed by a person in Nigeria, regardless of whether the supplier is based outside the country. This also covers services connected to property located in Nigeria.
Intangible property (such as IP or other intangible rights) is exploited in Nigeria, registered or assigned to a person in Nigeria, or linked to a tangible or immovable asset situated in the country .

Key Point: In practical terms, if goods, services, or intangible rights are used, consumed, exploited, registered, or connected to property in Nigeria, they are VAT-able .

A Practical Example

Consider a Nigerian graphic designer licensing a custom stock image to a local business through a digital marketplace app. In this transaction, the VAT rate of 7.5% would apply to each fee component or category of fees involved:

The platform’s listing/subscription fee/commission paid by the graphic designer (if any)

The licensing fee for the stock picture/video paid by the end user

The payment processing fee charged in the transaction

Who Must Register for VAT?

Non-Resident Digital Service Providers

Any non-resident business that supplies taxable goods or services to customers in Nigeria is required to register for VAT in Nigeria. This obligation applies to all forms of digital or electronically supplied services, including:

Cloud hosting and infrastructure services

Streaming and entertainment platforms

Software as a Service (SaaS)

E-commerce platforms

Digital advertising

Other digital products and services

Such suppliers must charge VAT on their invoices and comply with Nigerian VAT filing and remittance requirements .

Important: Failure by a non-resident company (NRC) to register for a tax identification number may result in a doubled withholding tax rate .

Resident Businesses

All resident businesses that make taxable supplies must register for VAT, charge VAT, file monthly VAT returns, and remit VAT collected. The turnover threshold used for Corporate Income Tax, Capital Gains Tax, and the Development Levy does not apply to VAT. Even small companies must comply with VAT obligations where they make taxable supplies .

Late filing attracts administrative penalties that increase each month until compliance .

Who Pays or Remits VAT?

Non-Resident Suppliers

When a non-resident supplier provides taxable supplies into Nigeria, the default rule is that the Nigerian customer withholds and remits the VAT to the tax authority. However, the tax authority may appoint the non-resident or an intermediary to collect and remit VAT directly. When appointed, a non-resident supplier becomes responsible for charging and remitting VAT to the tax authority .

Digital Platforms and Marketplaces

Digital platforms and marketplaces may be directed to collect VAT on transactions carried out through their systems. This responsibility can extend to the full value of the transaction, not just the platform’s commission, where the platform has been designated as a VAT collection agent .

When the customer is a government ministry, department, agency, or another entity specifically authorised to withhold VAT, that customer must withhold and remit the VAT regardless of whether the supplier or platform is resident or non-resident .

Determining if Nigerian VAT is Due

Any provider or liable intermediary must establish if the place of consumption is Nigeria, and VAT therefore due. They may rely on the following:

Customer billing address

Customer incorporated in Nigeria

Nigerian IP address

Any other similar evidence

The Significant Economic Presence (SEP) Rule

One of the most transformative changes under the NTA 2025 is the expansion of the Significant Economic Presence (SEP) rule. Prior to the 2025 reforms, Nigeria’s approach to taxing digital activities was fragmented and largely inadequate for the digital age, governed primarily by the Companies Income Tax Act (CITA) and Value Added Tax Act (VATA), which dated back to the 1990s and focused on physical presence for tax liability .

This model failed to capture revenue from digital services, where providers like social media platforms or cloud computing firms earned from Nigerian users without any local footprint. A pivotal shift occurred in 2020 with the introduction of the SEP rule via the Finance Act 2019 and SEP Order, 2020 .

Legal Definition of SEP Under the NTA 2025

Under the Nigeria Tax Act 2025, a non-resident person is deemed to have significant economic presence in Nigeria where the person, directly or through another entity, transmits, emits, or sends signals, sounds, messages, images, or data to Nigeria in respect of any activity, including but not limited to:

Electronic commerce and application stores

High-frequency trading

Electronic data storage and cloud computing

Online advertising and participative network platforms

Online payments and supply of user data

Search engines and digital content services

Online gaming and online teaching services

Profits generated from these activities can be attributed to the Significant Economic Presence and are therefore subject to Nigerian taxation .

Key Changes Under the NTA 2025

Section 17 of the NTA clears the path for a revised SEP Regulation to be issued by the Minister of Finance to capture NRCs which can attribute profit to specific digital activities and services from Nigeria. Notably, while the NTA does not stipulate a threshold, as applicable under the SEP Order 2020, it refocuses SEP primarily on digital services .

What this means for your business:

Payments originating from Nigeria may trigger a withholding tax liability even without a PE or SEP

Once nexus is established, profit attribution shifts to customer and user locations

The tax authority may compare a PE’s profit margin against its global parent

The final tax liability for NRCs is the highest of: actual PE profit; a profit margin aligned with the global parent; 4% of turnover; or withholding tax incurred (5% to 20%), which acts as a final minimum tax

Expanded Input VAT Recovery for Digital Businesses

The NTA 2025 broadens what businesses can claim as input VAT. This is a significant opportunity for digital platforms and fintechs that have substantial operational costs .

What’s New:

Businesses may now claim input VAT on both services and fixed assets, provided these costs relate to making taxable supplies. This represents a major expansion from previous rules .

Practical Examples of Input VAT Recovery:

Cloud tools and infrastructure services
Third-party software and licenses
Consultant and professional service fees
IT equipment and infrastructure
Developer tools and platforms

Zero-Rated Supplies for Digital Exports

At the same time, the list of zero-rated supplies has been expanded to cover exported services and intangible assets (including digital assets). This creates two important outcomes for digital businesses:

VAT is not charged on qualifying foreign-facing supplies
Because these supplies are zero-rated (not exempt), businesses can recover the VAT paid on their costs (e.g., cloud tools, third-party software, consultants, infrastructure), as long as these costs relate to making taxable supplies

Key Point: Zero-rated is better for the business—unlike exempt supplies, zero-rated supplies allow for input VAT recovery.

Taxation of Digital and Virtual Assets

The NTA 2025 explicitly includes profits or gains from transactions in digital and virtual assets as chargeable income. This brings cryptocurrencies and NFTs squarely within Nigeria’s tax net .

Key Provisions

Income Tax:

Section 4 of the NTA explicitly includes profits or gains from transactions in digital and virtual assets, such as cryptocurrencies and NFTs, as chargeable income
Gains are subject to Companies Income Tax (CIT) at 30% for companies and progressive Personal Income Tax (PIT) rates up to 25% for individuals
Where a gain is made from disposal of digital assets, such gains would also be subject to tax at the rate of 30%

Virtual Asset Service Providers (VASPs)

Virtual Asset Service Providers, including crypto exchanges, must:

Register with the Nigeria Revenue Service (NRS)
File periodic returns disclosing relevant transaction and income information relating to Nigerian users or activities
This obligation applies regardless of whether the VASP is resident in Nigeria where it triggers an SEP or Permanent Establishment

VAT on Virtual Asset Transactions

The NRS Information Circular No. 2026/21, issued on 31 July 2026, provides specific guidance:

7.5% VAT applies to intermediary service fees charged by VASPs, not to the transfer of the asset itself. Transferring a virtual asset is expressly not a taxable supply
Transferring a virtual asset is expressly not a taxable supply
VAT is remitted in the currency of the transaction

Stamp Duty and Withholding Tax

1.5% stamp duty applies to every conversion between naira and tokens, in both directions
1% withholding tax applies to gross disposal proceeds for cryptocurrencies, security tokens, and NFTs
Stablecoins are carved out of the withholding tax requirement

Electronic Money Transfer Levy (EMTL)

Digital payment through fintech is also captured through the Electronic Money Transfer Levy (EMTL) and VAT charges on subscription to entertainment channels. The Company Income Tax on fintech firms and VAT on service fees solidify Nigeria’s prospects in fintech .

Compliance Requirements for Digital Businesses

Simplified Compliance Regime Portal

A Simplified Compliance Regime portal is being rolled out to support registration and reporting for non-resident suppliers. Businesses with more than USD 25,000 annual turnover from Nigeria will be required to register, collect, and remit VAT through this system. Payment processors and platforms will also face new obligations, including real-time transaction reporting via API integration with the NRS .

Invoicing Obligations

Nigeria expects VAT registered businesses to issue compliant electronic invoices, which should include the following:

Name and TIN of the supplier
Description of the goods or digital services
Date
Value
VAT liability

Penalties for Non-Compliance

Failure to register for a Tax Identification Number: May result in a doubled withholding tax rate
Failure to comply by VASPs: ₦10,000,000 (first month), ₦1,000,000 (each subsequent month), with possible license suspension or revocation
Nigerian companies that award contracts to unregistered foreign service providers: Penalties of up to N5 million

How Qeeva Advisory Helps Digital Platforms and Fintechs Navigate VAT

At Qeeva Advisory, we understand that navigating VAT compliance under the NTA 2025 can be complex—especially for digital platforms and fintechs operating in a rapidly evolving regulatory landscape. Our team of experienced professionals specializes in helping Nigerian and non-resident digital businesses understand their VAT obligations, classify their supplies correctly, and develop strategies to maximize input VAT recovery while ensuring full compliance.

Our Core Services for Digital Businesses

Advisory Services Nigeria – Our advisory professionals help you understand your VAT obligations under the NTA 2025, classify your supplies correctly, and develop strategies to maximize your input VAT recovery while ensuring full compliance. We offer tax advisory services in Value Added Tax (VAT), Personal Income Tax (PIT), Withholding Tax (WHT), transfer pricing, and other relevant taxes specific to your client demands.

Tax Strategies and Planning – We help you structure your digital business to optimize your VAT position, identify zero-rated supplies that qualify for input VAT recovery, and ensure you do not lose money on exempt supplies. Our tax planning expertise helps businesses enjoy minimization of tax liability, reduction of tax litigation and penalties, and productive investment from saved payments in taxes to grow and expand business.

Regulatory Compliance – We ensure your business meets all filing requirements, including timely VAT remittance, and stays in good standing with the Nigeria Revenue Service. We help you navigate the complex web of VAT regulations and avoid costly penalties. Our team ensures compliance with all taxes a business is exposed to, including the Value Added Tax Act, Withholding Tax Act, Company Income Tax Act, and Education Tax Act.

Bookkeeping Services – Accurate records are essential for VAT compliance and input VAT recovery. Our bookkeeping services ensure your financial records are accurate and complete, properly separating VAT collections from revenue, and accurately tracking input VAT for claims. Services include day-to-day bookkeeping, bank reconciliation, financial statements preparation, and VAT returns filing.

Risk Management – We help you identify and manage risks associated with VAT compliance, audits, investigations, and disputes. We specialise in claims management and advocacy, loss modeling and risk profiling, and risk tolerance analysis.

Our Service Methodology for Digital Platforms

Step 1: VAT Classification Review – We review your products, services, and supplies to determine whether they are standard-rated, zero-rated, or exempt. We identify misclassifications that could be costing you money, including assessing whether you need to register as a non-resident digital service provider.

Step 2: Input VAT Recovery Assessment – We assess your input VAT recovery position and identify opportunities to claim VAT on zero-rated supplies, including cloud tools, software, and professional services.

Step 3: Documentation and Filing Support – We help you prepare and file VAT returns accurately and on time, ensuring you have the documentation needed to support zero-rating claims.

Step 4: Compliance Monitoring – We help you monitor changes in the law, including new classifications, e-invoicing requirements, and filing deadlines.

Step 5: Dispute Resolution – If you face disputes with tax authorities over VAT classification or remittance issues, we provide expert representation.

Frequently Asked Questions

Q: Who must register for VAT under the NTA 2025?
A: All resident businesses making taxable supplies must register for VAT. Additionally, any non-resident business supplying taxable goods or services to customers in Nigeria—including cloud hosting, streaming, software, e-commerce platforms, and other digital products—is required to register for VAT in Nigeria .

Q: What is the Significant Economic Presence (SEP) rule?
A: SEP is a rule that triggers a taxable presence for non-resident companies providing digital services when they derive value from Nigerian users. The NTA 2025 refocuses SEP primarily on digital services and clears the path for a revised SEP Regulation .

Q: Do digital assets and crypto transactions attract VAT?
A: Under the NTA 2025, profits or gains from transactions in digital and virtual assets, such as cryptocurrencies and NFTs, are chargeable income. Virtual Asset Service Providers (VASPs), including crypto exchanges, must register with the Nigeria Revenue Service and file periodic returns .

Q: What is the difference between exempt and zero-rated supplies for digital businesses?
A: Exempt supplies have no VAT charged, and input VAT is NOT recoverable. Zero-rated supplies are charged at 0% VAT, and input VAT IS recoverable. The NTA 2025 has expanded zero-rated supplies to cover exported services and intangible assets, including digital assets .

Q: How can digital platforms claim input VAT recovery?
A: The NTA 2025 broadens input VAT recovery. Businesses may now claim input VAT on both services and fixed assets, provided these costs relate to making taxable supplies. This includes cloud tools, third-party software, consultants, and infrastructure .

Q: What happens if I don’t register for VAT as a non-resident digital service provider?
A: Failure by a non-resident company to register for a tax identification number may result in a doubled withholding tax rate . Additionally, the tax authority may appoint an agent to collect VAT on your behalf, and penalties for non-compliance can be significant .

The Bottom Line

The NTA 2025 represents a significant shift in how digital platforms and fintechs are taxed in Nigeria. For the first time, there is a clear, enforceable framework for taxing the digital economy. The reforms bring several key changes:

Expanded VAT obligations for non-resident digital service providers
Broader and more enforceable SEP rules for digital services
Clarified taxation of SaaS, cloud services, digital advertising, and other remote services
Taxable gains from digital and virtual assets, including cryptocurrencies and NFTs
Expanded input VAT recovery on services and fixed assets
E-invoicing requirements for improved transaction reporting

The fintechs that treat compliance as architecture—built in from the foundation, not bolted on later—will be stronger, more fundable, and harder to disrupt. The regime is more demanding than before, but also more predictable. That predictability is an asset. Use it.

Your job is to be prepared. Register for VAT if required. Understand the SEP rules. Claim your input VAT recovery. Maintain proper documentation. Seek professional guidance.

With the right approach and the right partner, you can turn VAT classification from a compliance headache into a cash-flow advantage.

Reference Links / Sources

Mondaq – VAT Under The NTA 2025: What Digital Platforms And Fintechs Need To Know – Detailed breakdown of VAT rules for digital platforms and fintechs, including taxable supply definitions, registration requirements, and input VAT recovery

VATCalc – Nigeria VAT non-resident digital services 2026 – Overview of VAT obligations for non-resident digital service providers, including registration thresholds and invoicing requirements

Mondaq – Significant Economic Presence In Nigeria – Legal definition of SEP under the NTA 2025 and activities that trigger taxable presence

Regfollower – NRS issues virtual asset tax framework – Comprehensive framework for taxation of cryptocurrencies, stablecoins, and NFTs

ZAWYA – Nigeria’s tax reform and the road to sustainable growth – Overview of digital economy taxation including fintech, content creators, and e-commerce platforms

Jackson, Etti & Edu – Digital Taxation: Risks and Opportunities – Insights on SEP tests, SaaS taxation, and digital asset rules for portfolio tech companies

BusinessDay – Foreign firms reassess Nigerian tax exposure after SEP changes – Analysis of SEP changes and impact on non-resident companies

The Paypers – Nigeria’s new virtual assets tax rules – Detailed breakdown of VAT, stamp duty, and withholding tax on virtual asset transactions

BusinessDay – Taxation of digital activities under the Tax Reform Acts 2025 – Comprehensive analysis of SEP rules, digital asset taxation, and cross-border transaction implications

KPMG – Significant direct and indirect tax reforms in Nigeria Tax Act (NTA) 2025 – Summary of key reforms including SEP rules, profit attribution, and non-resident registration requirements

Let’s Talk About Your VAT Compliance Needs

Navigating VAT compliance under the NTA 2025 can feel complex—especially for digital platforms and fintechs operating in Nigeria’s rapidly evolving digital economy. At Qeeva Advisory, we understand the challenges businesses face in understanding VAT obligations, claiming input VAT recovery, and complying with the new rules.

Whether you need help with VAT classification, input VAT recovery, SEP compliance, or filing support, 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 VAT compliance with confidence. Our processes are trustworthy with total transparency in our workflow, and we care to meet your diverse needs with tailored solutions.

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