This article is for general information only. It is not legal or tax advice. For your situation, consult a qualified tax professional or FIRS.

Understanding the difference between input and output VAT is essential for managing your tax obligations effectively. Let's break down these concepts.

Output VAT is the VAT you charge on sales to your customers. When you sell goods or services, you add 7.5% VAT to the price and collect it from the buyer.

Input VAT is the VAT you pay on purchases from your suppliers. This includes VAT on raw materials, equipment, services, and other business expenses.

The VAT you remit to NRS is the difference between output VAT collected and input VAT paid. If you collected ₦100,000 in output VAT and paid ₦40,000 in input VAT, you remit ₦60,000.

To maximize VAT credits, keep proper VAT invoices for all purchases. TaxTask automatically tracks both input and output VAT, calculating your net liability in real-time.

VAT Input vs Output: What Every Business Owner Should Know