Nigeria’s tax rules for cross-border digital services are creating uncertainty for foreign companies, according to a new report by PricewaterhouseCoopers (PwC). The report highlights gaps in guidance on electronic invoicing and specific value-added tax (VAT) rules for digital assets and cryptocurrency-related activities.
Unclear E-Invoicing Rules for Foreign Suppliers
PwC’s VAT in Africa: Digital Services 2026 report examines digital tax frameworks in 28 African countries. It points to unresolved questions about Nigeria’s digital tax implementation. The country’s electronic invoicing framework could apply to non-resident taxable suppliers (NRTSs), but the Nigeria Revenue Service (NRS) has not defined the operational requirements for these 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. The NRS has not explicitly excluded non-resident suppliers from this category. This leaves 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.
7.5% VAT Obligation for Foreign Digital Firms
Under Nigeria’s existing rules, qualifying foreign businesses supplying taxable digital services to Nigerian customers must register for VAT once their annual supplies reach $25,000 within 12 months. The standard VAT rate is 7.5 per cent. Registered suppliers must obtain a tax identification number, issue tax invoices, maintain records, and file monthly returns.
According to PwC, the requirements cover both business-to-consumer and business-to-business transactions involving electronically supplied services. Businesses must collect VAT from Nigerian customers and remit it to the NRS by the 21st day of the following month in the transaction currency. 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. If a foreign supplier fails to charge VAT on a business-to-business transaction, the Nigerian customer must account for the tax through self-charging. This is harder for business-to-consumer transactions where the supplier has not charged VAT.
Missing Rules for Digital Assets
The absence of dedicated VAT provisions for these activities stands in contrast to the established framework for electronically supplied services.
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. The legal basis for VAT compliance by non-resident taxable suppliers is Section 150 of the Nigeria Tax Act. A simplified compliance regime introduced in 2022 remains relevant while the NRS develops updated guidance.
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), this input VAT can be offset against output VAT collected in the same month, with the net amount remitted to the NRS. If input VAT exceeds output VAT, suppliers can carry the excess forward or apply for a refund. The NRS must process a valid refund request within 30 days, and applications must be submitted within 12 months of the transaction.
Foreign suppliers operating intermediary platforms must also meet VAT registration, invoicing, and filing requirements as if they were the actual suppliers. They must maintain records of transactions involving Nigerian customers.
