Net your output VAT against recoverable input VAT.
Net VAT payable
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Total input VAT
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Credit carried forward
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Claim window
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What input VAT recovery actually means
VAT is meant to fall on the final consumer, not on the business that handles it along the way. The mechanism that makes that work is input VAT recovery. When you sell, you collect VAT from your customers, called output VAT. When you buy supplies, you pay VAT to your own suppliers, called input VAT. You hand the tax authority only the difference. This calculator does that netting for you and tells you whether you owe VAT this period or carry a credit forward.
The headline shift this tool reflects is broader recovery. Under the rules as modelled here, drawn from section 155(4) of the Nigeria Tax Act 2025, input VAT is recoverable not only on goods bought for resale but also on services and on fixed assets such as plant, equipment and qualifying property. That is a real change from the older, narrower position many Nigerian businesses grew up with, where input VAT on overheads and capital items often stuck. Because this is part of the 2025 reform now phasing in, confirm the exact scope and any conditions with the Federal Inland Revenue Service before you file, since guidance is still settling.
From three input buckets to one net figure
The arithmetic is deliberately simple. The tool adds your input VAT across the three buckets, goods, services and fixed assets, into a single recoverable total. It then subtracts that total from your output VAT. If output is the larger number, the remainder is your net VAT payable. If your input VAT is larger, payable is zero and the surplus becomes a credit you carry into the next return. Both figures are floored at zero, so you never see a negative payable.
A trading month, netted out
Suppose in a month you collected NGN 750,000 of output VAT and paid input VAT of NGN 300,000 on goods, NGN 150,000 on services, and NGN 100,000 on a new fixed asset. The calculator stacks the inputs and offsets them in one move.
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So of the NGN 750,000 you collected, NGN 550,000 simply passes back out as recovered input tax and you remit NGN 200,000. The chart shows that split: the big bar is your output VAT, and the shaded slice is the part neutralised by recovery.
The five-year claim window and a costly slip
Recovery is not open-ended. The tool shows a claim window of five years, the period within which input VAT must be claimed as modelled here. If you forget to claim a chunk of input tax in the period you incurred it, you generally have time to pick it up later, but do not let invoices age past that window or the recovery is simply gone. Keep tax invoices that clearly show the VAT charged, because a claim with no proper invoice behind it is the single most common reason an input VAT recovery is disallowed on review.
Who is this for? Any VAT-registered Nigerian business filing periodic returns, from a trading company to a service firm finally able to recover VAT on its software, professional fees and equipment. If your turnover sits below the small-business threshold the new regime sets, you may not be obliged to charge or recover VAT at all, so check your registration status first.
What happens to a VAT credit I carry forward?
A credit means your recoverable input VAT exceeded your output VAT for the period, so nothing is payable and the surplus rolls into your next return to offset future output VAT. It does not vanish at period end. In practice persistent credits, common for exporters and capital-heavy businesses, can build up, and you should ask the Federal Inland Revenue Service about the current refund procedure rather than letting a large credit sit indefinitely.
Can I recover input VAT on exempt sales?
Generally no. Input VAT is recoverable to the extent it relates to taxable supplies. If you make a mix of taxable and exempt supplies, the input VAT on costs tied to the exempt side is usually not recoverable, and shared costs may need apportioning. This calculator assumes the input VAT you enter is recoverable, so exclude anything attributable to exempt activity and confirm the apportionment rules with the FIRS.