Google has informed its Nigerian users that the company would charge 7.5% VAT on all taxable goods and services, effective from April 1st, 2022.
This was disclosed by Google via email sent to its Nigerian users, and seen by Nairametrics.
Google also stated that the amount of VAT charged on purchases will appear as a separate line in the user’s account.
What Google is saying about VAT
The mail party reads, “Due to new legislation in Nigeria, starting April 1, 2022, Google will be required to charge 7.5% VAT on all taxable goods and services. No action is required on your side with regard to your Google business account.”
Google showed some notable changes to the business account that would affect purchases and invoices.
“The amount of VAT charged on your purchases will appear as a separate line in your account. Your invoice or statement will show the amount of VAT charge,” it said.
What you should know
Value Added Tax is a levy charged on each stage of production of goods and services to the end-user, usually the final consumer.
Nigerians had commenced the payment of 7.5% Value Added Tax on Facebook and Instagram adverts since January 1st, 2022. The social media platform had announced that as a result of the regulation of the Nigerian government, all advertisements on the platform whether for personal or business purposes will be subjected to a 7.5% Value Added Tax.
Other countries that imposed VAT on online business
In the United Kingdom, the law states that “If you are a business making supplies of digital services to UK consumers, those supplies are liable to UK VAT. If you make supplies of digital services to consumers outside the UK these are not liable to UK VAT.”
Indonesia has a similar law with a ten percent VAT rate for online businesses. The Indonesian provision states that no matter where you are based, you must pay ten percent VAT if you have customers in Indonesia. Websites, internet service providers, online adverts, and affiliate marketing are all on the list.
In Egypt, online advertisements are subject to a 14% VAT, which applies to enterprises with annual sales of more than EGP 500,000.