VAT Calculation in Nigeria
Última actualización hace 56 días
Calculate VAT on an amount
Do you want to calculate VAT quickly and easily?
We have created a VAT calculator on our website that you can use very easily. You can add VAT to the amount or remove VAT from the amount.
How to calculate VAT? To do so, you have to calculate it using the corresponding formula.
First, you have to divide that 7.5%, which is the VAT percentage, by 100%. After doing the math, this totals a result of 0.075. For clarity:
VAT% = 7.5% / 100% = 0.075
Next, you have to multiply the selling price, known as the taxable base, with the VAT percentage. For example: ₦40,500.00 (which is the taxable amount) times 0.075 (the result of the above formula). This equals ₦3,037.50 (VAT amount). The formula looks like this:
VAT amount = taxable base * VAT (7.5%)
₦40,500.00 * 0.075 = ₦3,037.50
This is the total price with VAT: ₦40,500.00 + ₦3,037.50 = ₦43,537.50
How is the total calculated without separating VAT?
How to add VAT to a price? There is a simple, effective, and quick way that will help you to calculate the total amount or cost of VAT. This is another formula that is quite well known. It consists of adding a one to the result of the percentage of the tax that we detailed previously. That is to say: 1 + 0.075 = 1.075 .
This must be multiplied with the taxable base or sales price, following the example would be ₦40,500.00. After performing the mathematical operation, you will see that this will result in a cost with VAT already included (total amount). Which means ₦43,537.50, the formula looks like this:
VAT total amount = ₦40,500.00 * 1.075 = ₦43,537.50
Calculate the price excluding VAT. How to remove VAT from the total amount?
How to remove VAT? You must divide the total amount to be charged to the final consumer with the VAT percentage. If the total amount is ₦40,500.00 and the tax commission is 7.5%, this formula will give you this:
Taxable income = Total amount / VAT (7.5%)
₦40,500.00 / 1.075 = ₦37,674.42
How to calculate the taxable income with VAT only?
Calculate the taxable base: In the opposite case, that is to say, if you only have the total cost of the tax, you must perform another formula to know the taxable base. It simply consists of dividing the amount of the tax by 0.075, which is the corresponding percentage to charge.
In other words, if the VAT amount is ₦2,825.58 -as applied- you have to divide it by 0.075. You can see it better in this next formula:
Taxable income = VAT amount / VAT (7.5%)
₦2,825.58 / 0.075 = ₦37,674.42
This means that the cost of sale excluding VAT is ₦37,674.42.