The Smartest Way to Invoice Nigerian Clients

The rates that apply to you in 2026

The Nigeria Tax Act 2025 commenced on 1 January 2026 and rewrote both the company and the personal regimes. For most small businesses the headline is that Companies Income Tax went to zero.

Both small-company tests must be satisfied at once and there is no taper: a company at ₦99m turnover pays nothing, the same company at ₦101m pays 30% plus the 4% levy on all of its profit. The asset test catches asset-heavy businesses whose revenue is nowhere near the limit.

Exemption removes the liability, not the obligation. A small company still files a Companies Income Tax return within six months of its year end, demonstrating that it qualifies.

Choosing a payment rail

Three processors cover Nigeria between them, and they are not interchangeable — the right one depends on who is paying you and how.

Processing fees run around 1.5% and are charged on the gross — including any VAT you collected. That is a cost most businesses never total, and across a year it is usually a four- or five-figure line.

Whatever the rail, put the link in a WhatsApp message. The follow-up conversation is going to happen there regardless, and a link removes the step where the payer transcribes account details out of a PDF.

What a Nigerian invoice must carry

• Your registered business name and address exactly as on your CAC registration.
• Your TIN, and the client's TIN where they are a registered business.
• A sequential invoice number with no gaps and no restarts — gaps are the first thing an auditor asks about.
• Issue date and a due date stated as an actual date, not "net 30".
• Line items with quantity, unit price and the VAT treatment for that line.
• VAT at 7.5% shown as its own line rather than folded into the price.
• Bank name, account number and account name, because transfer remains the default.
• A payment reference the client will actually quote, so the credit can be matched.

The VAT line and the reference are the two most often skipped and the two that cost the most. A client who cannot see the tax cannot reclaim it; a payment with no reference sits unmatched while you chase an invoice that has already been paid.

VAT: what to charge and when to register

Registration becomes mandatory once taxable supplies reach ₦25,000,000 over a twelve-month period. Below that it is a commercial decision rather than a legal one, and for a business selling to consumers or to unregistered small businesses, staying out until you must is usually the better position — registering makes your prices 7.5% higher to anyone who cannot reclaim.

If most of your revenue is business-to-business and your own costs carry meaningful VAT, registering early usually wins, because input VAT recovery was broadened under the reform to include services and fixed assets rather than goods alone.

• Standard rated at 7.5%: nearly all professional services, software, consulting, general goods.
• Zero-rated: basic food, medical and pharmaceutical products, educational materials, and exports — you charge 0% but can still reclaim input VAT.
• Exempt: most medical services, tuition from registered institutions, some financial services — you charge nothing and cannot reclaim.

Returns are due by the 21st of the month following the month of supply. It is monthly, and penalties accrue per month of delay.

The 2026 filing calendar

The 10th and the 21st are the two dates worth putting on a wall. If you are both an employer and VAT-registered, something is due in the first three weeks of every month.

Getting ready for NRS e-invoicing

The Nigeria Revenue Service — the reconstituted FIRS — is rolling out mandatory electronic invoicing in phases by turnover, using structured, machine-readable invoice data in UBL format. A PDF typed in Word does not satisfy that, however neat it looks.

The preparation is unglamorous and worth doing before you are required to:

1. Raise invoices from a system that numbers them sequentially and cannot lose one.
2. Record both parties properly — names, addresses and TINs, not just a client nickname.
3. Itemise lines rather than billing a lump sum described as "services rendered".
4. State the VAT treatment per line, because an invoice can legitimately carry more than one.
5. Keep the history retrievable, so a question in June about March takes minutes rather than a day.

Businesses already doing those five things will have very little to change. Businesses invoicing from Word templates will have to change everything, and would rather do it now than under a deadline.

Billing foreign clients from a Nigerian base

Invoicing in dollars, pounds or euros while your costs are in naira is normal, and it introduces an exposure that naira-only billing does not: the rate on the invoice date and the rate on the settlement date will differ, and that difference is a real gain or loss belonging in your records rather than quietly absorbed into revenue.

Exports of services are zero-rated, so foreign work is charged at 0% VAT while input VAT on your own costs stays reclaimable if you are registered. The per-market detail — what your client's own tax authority expects to see on the document — is covered on the Ghana, Kenya, South Africa and United Kingdom pages.