The time of supply for VAT in Nigeria is the earliest of four events: the invoice or receipt is issued, the goods are delivered or made available, the payment falls due, or the payment is received. That date decides which VAT period the sale belongs to. Get it wrong and you report output VAT in the wrong month.
The rule comes from Information Circular No. 2026/05, which the Nigeria Revenue Service (NRS) issued on 29 June 2026 and KPMG Nigeria analysed in October 2026 in its note "Nigeria's VAT Reset". It replaces FIRS Information Circular 2022/14 of 4 April 2022. This guide turns the rule into a routine your finance team can run each month.
What is the time of supply for VAT in Nigeria?
Time of supply is the moment VAT becomes chargeable on a sale. KPMG's summary of the circular makes one point clear: it fixes when VAT is chargeable, not when you must pay it over. The two dates are separate, and many finance teams treat them as one.
The four trigger events are:
Invoice or receipt issued. The day you raise the document.
Delivery. The day goods are delivered or made available to the customer.
Payment due. The day the contract says the customer must pay.
Payment received. The day cash lands in your account.
Whichever of these happens first is your time of supply. A supplier who delivers in October, invoices in November and is paid in December has an October time of supply.
How do you work out the time of supply, step by step?
Step 1: List the trigger dates for each sale. Add four columns to your sales schedule, one per event. A sale with an empty column has not yet reached that trigger, which is useful to know.
Step 2: Pick the earliest date. Use a simple minimum formula in your spreadsheet or ERP. Do not default to the invoice date. In construction and shipping, delivery or a contractual due date often comes first.
Step 3: Assign the sale to that VAT period. Output VAT goes into the return for the month of the earliest date. Our guide on filing VAT returns on Rev360 covers the filing itself.
Step 4: Value the supply correctly. For cash sales, VAT applies to the price before VAT. For non-cash consideration, KPMG reports that the market value applies. For a mix, split the consideration between the taxable part and the rest. Sales to connected persons are valued at the arm's-length amount, and KPMG warns that undervaluing them invites extra VAT, interest and penalties.
Step 5: Confirm the place of supply. KPMG's summary treats goods as supplied in Nigeria if they are in, imported into, or installed in Nigeria at the time of supply. Services are supplied in Nigeria if they are rendered to, or consumed by, a person in Nigeria, wherever the work is done. Services tied to immovable property in Nigeria also qualify.
Step 6: Check for a withholding agent. If the NRS has appointed your customer as a VAT withholding agent, the customer withholds and remits the VAT on your supply, and you are relieved of collecting it. Where both parties are agents, the purchaser accounts for the VAT. The circular points to separate Guidelines on the Withholding of VAT for the procedure, so read those before you change your invoicing.
Step 7: Record input VAT within the time limit. KPMG lists five conditions for deducting input VAT. The input must relate to taxable supplies, only the part relating to taxable supplies can be claimed where you also make non-taxable supplies, and the claim must be made within five years of the period in which it was incurred. Our note on claiming input VAT on services shows where businesses lose credits.
What does the 2026/05 circular say about the Electronic Fiscal System?
KPMG reports that failing to process a taxable supply through the Electronic Fiscal System (EFS) carries an administrative penalty of ₦200,000, an additional penalty of 100% of the tax due, and interest at the CBN Monetary Policy Rate on an annual basis. KPMG also notes that because the EFS rolls out in phases, penalties should apply only to taxpayers who were in a phase and did not comply, and it suggests the NRS clarify this. Our earlier piece on the NRS e-invoicing penalty explains the enforcement background.
What this means for your business
Take a contractor that completes a site delivery on 28 October 2026, issues the invoice on 4 November and expects payment on 30 November. The earliest event is delivery, so the output VAT belongs in October. If the team waits for the invoice date, the October return is understated and the error shows up in a later NRS review.
Cash-flow pressure is the real cost. Because VAT can fall due before the customer pays, you may have to fund the VAT from your own cash for weeks. Oil and gas service firms, builders and shippers with long payment terms feel this most. Build the VAT timing into your 13-week cash forecast, and price long credit terms with the VAT carrying cost in mind.
One caution on sources. We have worked from KPMG's published summary of the circular, which does not set out special timing rules for advance payments, progress billing or continuous services. If your contracts have those features, check the circular text itself, or ask us, before you rely on the general rule.
FAQ
Is time of supply the same as the VAT filing date? No. Time of supply decides which VAT period a sale falls into. Filing and remittance deadlines are separate, so track both in your compliance calendar.
If I invoice in November but deliver in October, which month do I report? October, because delivery came first. The rule takes the earliest of the invoice, delivery, due date and payment events.
How long do I have to claim input VAT? KPMG's summary of the circular says the input tax must be claimed within five years from the tax period in which it was incurred. Claim it in the right period where you can, and keep the supplier invoice.
Unsure when VAT falls due on your contracts, or want your VAT timing reviewed before the year-end close? Contact VOG Global at vog.global. Our team in Area 10, Garki, Abuja works with finance teams across oil and gas, construction, banking, agriculture, NGOs and shipping.