Nigeria: Rental income from real properties not subject to VAT (Tax Appeal Tribunal decision)
A transaction must qualify as either a supply of goods or services to be subject to VAT.
A transaction must qualify as either a supply of goods or services to be subject to VAT.
The Tax Appeal Tribunal Lagos Zone held that rental income derived from real properties are not subject to value added tax (VAT).
The case is: NGX Real Estate Limited v. Federal Inland Revenue Service
The tribunal agreed with the taxpayer’s arguments that a transaction must qualify as either a supply of goods or services to be subject to VAT. Because taxable goods include tangible products movable at the point of supply and intangible products, assets, property transferable from one person to another, but excludes money, securities, and “interests in land,” the rental income from the taxpayer’s land and buildings did not constitute a taxable supply of goods. In addition, a lease delivering possessory rights to a tenant could not be regarded as a taxable supply of services.
Read an October 2023 report [PDF 1.1 MB] prepared by the KPMG member firm in Nigeria
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