he Federal Inland Revenue Service (FIRS) recently published Guidelines for the Refund of Value Added Tax (VAT) paid by Diplomats, Missions and International Organisations (Qualified Persons) on Goods and Services purchased to provide such qualified persons with a framework for processing such requests for VAT refunds.

Based on the above, where diplomats or diplomatic missions and international organisations pay VAT on goods purchased or services rendered, such diplomats and organisations will be entitled to a refund of the VAT paid at the point of purchase. This is premised on the established principle that goods and services purchased by Diplomats are zero-rated.

Qualified Parties and transactions for refund

The transactions that qualify for refund under the Guidelines are as follows – VAT paid on goods and services purchased or imported by Diplomats, Diplomatic Missions and International Organisations. Persons or Organisations eligible to apply for refund of VAT are Diplomats (foreign employees of embassies/missions not below the rank of third secretary), Diplomatic Mission (Embassies and High Commissions), International Organisations conferred with diplomatic immunities and privileges by the Honourable Minister of Foreign Affairs by an Order published in a Federal Gazette pursuant to the Diplomatic Immunities and Privileges Act.

Refund Process

The Ministry of Foreign Affairs conducts all interactions with qualified Diplomats and Diplomatic Missions and collaborates with FIRS during refund process to ensure efficiency and transparency.

International Organisations

The process for refunds under this sub head is different as all applications for refunds on goods purchased by International Organisations (conferred with diplomatic immunities and privileges by the Honourable Minister of Foreign Affairs by an Order published in a Federal Gazette) are to be made to the Executive Chairman, Federal Inland Revenue Service (FIRS) and to ensure seamless refunds, the application must be accompanied with proper documentation.

Conclusion

The Guidelines on VAT refund is a welcome development that has created opportuities for diplomats and qualified international organisations to exercise some of the priviledges granted them as a result of their status. It will be interesting to see the implementation of the Guidelines in the months ahead.

If you wish to discuss these topics, please contact:

 WTS Blackwoodstone