Nigeria’s efforts to tax cross-border digital transactions face regulatory uncertainties, with foreign service providers still lacking clear guidance on electronic invoicing requirements and specific value-added tax (VAT) rules for cryptocurrency-related activities and digital assets, according to a report by PricewaterhouseCoopers (PwC).
In its VAT in Africa: Digital Services 2026 report, which examines the tax frameworks governing electronically supplied services in 28 African countries, PwC identified outstanding questions about the implementation of Nigeria’s digital tax requirements, despite legislative changes that place direct VAT obligations on qualifying foreign suppliers.
The report said the country’s electronic invoicing framework could apply to non-resident taxable suppliers (NRTSs), but the Nigeria Revenue Service (NRS) had yet to clearly define the operational requirements for such businesses.
As of February 2026, mandatory electronic invoicing applied to large taxpayers with annual turnover of at least N5 billion, equivalent to approximately $3.6 million, according to the report.
However, the NRS had not expressly excluded non-resident suppliers from the category, leaving uncertainty over whether foreign digital service providers meeting the relevant criteria would be required to comply.
PwC advised affected businesses to prepare for possible implementation and seek written clarification from the NRS on their obligations, including whether penalties could arise from non-compliance during the period of uncertainty.
The report also stated that Nigeria currently had no specific VAT rules or regulations relating to cryptocurrency-related activities and digital assets, highlighting another area of the digital economy where the tax treatment remains undefined under dedicated VAT provisions.
Foreign digital firms face 7.5% VAT obligation
Under Nigeria’s existing framework, qualifying foreign businesses supplying taxable digital services to Nigerian customers must register for VAT once their annual supplies reach or are expected to reach $25,000, or its equivalent in other currencies, within a 12-month period.
The standard VAT rate is 7.5 per cent, and registered suppliers are required to obtain a tax identification number, issue tax invoices, maintain transaction records and file monthly VAT returns.
According to PwC, the requirements cover both business-to-consumer and business-to-business transactions involving electronically supplied services.
Affected businesses must collect VAT from Nigerian customers and remit the proceeds to the NRS before the 21st day of the following month. Payments are made in the currency of the transaction.
The covered services include streaming platforms, online advertising, cloud computing, digital marketplaces, online gaming, subscription-based social media, e-learning, ride-hailing and online booking services.
Other categories include digital content downloads, video conferencing, instant messaging, online betting, e-libraries, automated consultancy and online professional services.
Where a foreign supplier fails to charge VAT on a taxable business-to-business transaction, the Nigerian customer is required to account for the tax through a self-charging arrangement. However, PwC noted that accounting for VAT could be more difficult in business-to-consumer transactions where the supplier has not charged the tax.
The report identified Section 150 of the Nigeria Tax Act as the legal basis for VAT compliance by non-resident taxable suppliers.
It also referred to the simplified compliance regime introduced in 2022, which requires foreign suppliers providing taxable goods, services, intangible assets and digital products to Nigerian customers electronically to register for VAT, charge the tax and remit collections to the tax authority.
PwC said the 2022 circular remained relevant pending updated guidance reflecting the provisions of the newer legislation.
Digital asset VAT rules remain unspecified
On cryptocurrency-related activities and digital assets, PwC said Nigeria had yet to introduce specific VAT rules or regulations addressing the transactions.
The report did not establish that digital asset transactions were exempt from all forms of taxation. Rather, it identified the absence of dedicated VAT provisions for the activities.
This contrasts with the framework for electronically supplied services, for which Nigeria has established registration thresholds, tax collection obligations and remittance deadlines for qualifying foreign suppliers.
Foreign suppliers can deduct eligible input VAT
The report also highlighted provisions allowing non-resident taxable suppliers to deduct eligible input VAT incurred on services and fixed assets used to make taxable supplies in Nigeria.
Under Section 155(4) of the Nigeria Tax Act, qualifying input VAT can be offset against output VAT collected during the same month, with the net amount remitted to the NRS.
Where input VAT exceeds output VAT, suppliers may carry the excess forward to offset future tax liabilities or apply for a refund.
PwC said the NRS was required to process a valid refund request within 30 days of receiving it. Refund applications must be submitted within 12 months of the transaction that generated the excess input VAT.
The report further stated that foreign suppliers operating intermediary platforms must fulfil applicable VAT registration, invoicing and filing requirements for sales completed through their platforms, as if they were the actual suppliers. They are also required to maintain records of transactions involving Nigerian customers.
