A business that makes a taxable supply in Nigeria must register for VAT. The exception is a small business under a specific turnover test, and even that business can register voluntarily.
The general rule
Any business selling goods or services subject to VAT is expected to register, get a Tax ID, and start charging 7.5% on what it sells. Every taxable person must register and get a Tax ID, and VAT registration sits inside that same duty.
This applies whether you run a limited company or a registered business name. The law looks at what you sell, not your legal structure.
The small-business exemption
A business counts as small if its turnover sits at ₦100 million or less a year. Exempt from VAT registration, from charging VAT and from filing VAT returns for a business that meets this test.
That is a real exemption from registering in the first place, not just from filing once registered. Our piece on the exemption threshold covers the fixed-assets side of the test too.
Who must register regardless of size
A business providing professional services cannot be treated as small under this test, whatever its turnover. Once your turnover moves above the threshold, the exemption stops applying and registration becomes compulsory.
Registering anyway, on purpose
A small business can still choose to register. Opting in takes by written notice to the NRS, addressed to the tax authority, after which the business charges VAT and files returns like anyone else.
Some small businesses do this deliberately, so they can recover input VAT on their own costs. Once a business opts in, the exemption no longer applies to it.
What happens once you are registered
From that point, the 21st day of the following month becomes your filing deadline every month, including a nil return in a quiet month. Our step-by-step guide to registering covers what to do next, and the documents you will need are worth gathering before you start.
Registration also means keeping proper invoices and records from day one, not from whenever an audit turns up. Our guide to VAT invoices and records sets out what to keep and for how long.
A quick way to check where you stand
Add up your turnover for the last twelve months. If it sits above ₦100 million, registration is compulsory, not optional.
If it sits below that figure, check one more thing: whether your business provides professional services. That carve-out removes the exemption regardless of turnover.
Doing this check every quarter, rather than once a year, catches the month you cross the line closer to when it actually happens.
For the filing side once you are registered, our VAT monthly return guide walks through the whole process, or browse more NRS and Rev360 articles.