Professional Documents
Culture Documents
is a tax on consumption levied on the sale, barter, exchange or lease of goods or properties and
services in the Philippines and on importation of goods in the Philippines. The seller is the one statutorily
liable for the payment of the tax but the amount of the tax may be shifted or passed on to the buyer,
transferee or lessee of the goods, properties or services.
VAT TRANSACTIONS
a. VAT Transactions - any person who, in the course of his trade or business
NEW LAW Liable to register for VAT if;
GS/GR for the past 12 months have exceeded P1,500,000.00
There are reasonable grounds to believe that his GS/GR for the next 12
months will exceed P1,500,000.00
Sale of Goods or Properties VAT is imposed and collected on every sale, barter or exchange,
or transactions deemed sale of taxable goods or properties at the
rate per 10% of the gross selling price or gross value in money.
Transactions Deemed Sales
1. Transfer, use or consumption not in the course of business of goods or
properties originally intended for sale or for use in the course of business.
Transfer of goods or properties not in the course of business can take place
when VAT-registered person withdraws goods from his business for his personal
use;
2. Distribution or transfer to:
Shareholders or investors share in the profits of VAT-registered person;
Creditors in payment of debt or obligation.
3. Consignment of goods if actual sale is not made within 60 days following date
such goods were consigned.
4. Retirement from or cessation of business with respect to all goods on hand,
whether capital goods, stock-in-trade, supplies or materials as of the date of such
retirement or cessation, whether or not the business is continued by the new
owner or successor.
Change or ownership of the business.
Dissolution of a partnership and creation of a new partnership which
takes over the business.
Real Properties - In case of sale of real properties on the installment plan, the real estate
dealer shall be subject to VAT on the installment payments, including interest
and penalties, actually and/or constructively received by the seller.
- In case of sale of real properties on the deferred-payment basis (Initial
payments of which in the year of sale exceed twenty-five percent (25%) of
gross selling price, not the installment plan, the transaction shall be treated as
cash sale which makes the entire selling price taxable in the month of sale.
Sale or Exchange of Services means performance of all kind of services in the Philippines for
others for a fee, remuneration or consideration, whether in kind or in cash.
SEC 4.108-2
Importation of goods the importer, whether an individual or corporation and whether or not made
in the course of his trade or business, shall be liable to VAT. The tax shall be
based on the total value used by the BOC in determining tariff and custom duties,
plus customs duties, excise tax, if any, and other changers, such as postage,
commission, and similar changes, prior to the release of the goods form customs
custody.
NEW VAT COVERAGE - 10% VAT
1. Sale of nonfood agricultural products; marine and forest products in their original state by primary producer or owner of the land;
2. Sale of cotton and cotton seeds in their original state;
3. Sale or importation of coal and natural gas, in whatever form or state;
4. Sale or importation or petroleum products, including raw materials for their production;
5. Sale by the artist of his works of art, literary works, musical compositions and similar creations, or his services performed for the
production of such works;
6. Services rendered by doctors of medicine duly registered with the PRC;
7. Services rendered by lawyers duly registered with IBP;
8. Sale of electricity by generation, transmission and distribution companies (except sale of power/fuel generated through renewable
sources of energy which is 0%);
9. Toll road operations
10. PAGCOR and its licensees and franchisees;
11. Sale of goods, supplies, equipment and fuel (including leases of property) and services to persons engaged in international
shipping or international air transport operations. (However, services and goods pertaining to transport form one place in the
Philippines to another place in the Philippines is subject to 10% VAT)
12. Transport of passengers and cargo by domestic air or sea vessels with international operations from the Philippines to a foreign
country of carrier.
13. Sale of power or fuel generated through renewable sources of energy such as biomass, solar, wind hydropower, geothermal,
ocean energy and other emerging energy sources using technologies such as fuel cells and hydrogen fuels.
14. Sale of services paid for in acceptable foreign currency and accounted for in accordance with BSP rules provided that services
should be preformed in the Phils. For the following:
> Persons engaged in business conducted outside the Philippines;
> Non-resident persons not engaged in business who is outside the Philippines when the services are performed.
NEW LAW
Export Sales
> The sale and actual shipment of goods from the Philippines
to a foreign country, irrespective of any shipping arrangement
that may be agreed upon which may influence or determine
the transfer of ownership of the goods so exported, paid for in
acceptable foreign currency or its equivalent if goods or
services, and accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP);
> The sale of raw materials or packaging materials to nonresident buyer for delivery to a resident local export-oriented
enterprise to be used in manufacturing, processing, packing
or repacking in the Philippines of the said buyer's goods, paid
for in acceptable foreign currency, and accounted for in
accordance with rules and regulations of hte BSP;
> The sale of raw materials or packaging materials to an
export-oriented enterprise whose export sales exceed
seventy percent (70%) of total annual production;
> Sale of gold to the BSP
> Transactions considered export sales under Executive
Order No. 226, otherwise know as the Omibus Investments
Code of 1987, and other special laws.
> The sale of goods, supplies, equipment and fuel (including leases
of property) and services to persons engage in international shipping
or international air transport operations; Provided, That the same is
limited to goods, supplies, equipment and fuel pertaining to or
attributable to the transport of goods and passengers from a ort in
the Philippines directly to a foreign port without docking or stopping
at any other port in the Philippines;
> Transport of passengers and cargo by domestic air or sea vessels
with international operations from the Philippines to a foreign country
of carrier.
b.
c.
d.
c. VAT-Exempt Transactions refer to the sale of goods or properties and/or services and the use or lease of
properties that is not subject to VAT (output tax) and the seller is not allowed any tax
credit on VAT(input tax) previously paid.
OLD LAW
a.
b.
c.
d.
e.
f.
g.
h.
I.
j.
NEW LAW
none
none
a.
Same
OLD LAW
NEW LAW
(5.) Services rendered by fire, marine or miscellaneous
insurance agents of foreign insurance companies (Sec. 124);
(6.) Services of proprietors, lessees or operators of cockpits,
cabarets, night of day clubs, boxing exhibitions, professional
basketball games, Jai-Alai and race tracks (Sec. 125); and
(7.) Receipts on sale, barter or exchange of shares of stock
listed and traded through the local stock exchange or through
initial public offering (Sec. 127)
k.
s.
t.
u.
v.
f.
g.
Same
Same
h.
Same
none
I.
Same
j.
Same
k.
Same
Same
None
Same
Same
Same
w. Sale of real properties not primarily held for sale to customers or held p. The following sales of real properties are exempt from VAT,
for lease in the ordinary course of trade or business or real property
namely:
utilized for low-cost and socialized housing as defined by Republic Act
(1.) Sale of real properties not primarily held for sale to
No. 7279, otherwise known as the Urban Development and Housing
customers or held for lease in the ordinary course of trade or
Act of 1992, and other related laws, house and lot and other residential
business.
(2.) Sale of real properties
dwellings valued at One million pesos (P1,000,000) and below:
utilized for low-cost housing as defined by RA No. 7279,
Provided, That not later than January 31st of the calendar year
otherwise known as the "Urban and Development Housing
subsequent to the effectivity of this Act and each calendar year
Act of 1992" and other related laws, such as RA No. 7835 and
thereafter, the amount of One million pesos (P1,000,000) shall be
RA No. 8763.
adjusted to its present value using the Consumer Price Index, as
published by the national Statistics Office (NSO);
(3.) Sale of real properties utilized for socialized housing as
defined under RA No. 7279, and other related laws, such as
RA No. 7835 and RA No. 8763, wherein the price and the
NEDA and other related laws.
OLD LAW
x.
y.
NEW LAW
(4.) Sale of residential lot valued at One Million Five
Hundred Thousand Pesos (P1,500,000.00) and below, or
house & lot and other residential dwellings valued at Two
Million Five Hundred Thousand Pesos (P2,500,000.00)
and below where the instrument of sale/transfer/disposition
was executed on or after July 1, 2005; Provided, That not
later than January 31, 2009 and every three (3) years
thereafter, the amounts stated herein shall be adjusted to its
present value using the Consumer Price Index, as published
by the National Statistics Office (NSO); Provided, further, that
such adjustment shall be published through revenue
regulations to be issued not later than March 31 of each year;
Lease of a residential unit with a monthly rental not exceeding Eight q. Lease of residential units with monthly rental per unit not
thousand pesos(P8,000); Provided, That not later than January 31st
exceeding Ten Thousand Pesos (P10,000.00), regardless
of the calendar year subsequent to the effectivity of Republic Act No.
of the amount of aggregate rentals received by the lessor
8241 and each calendar year thereafter, the amount of Eight thousand
during the year; Provided, that not later than January 31, 2009
pesos (P8,000) shall be adjusted to its present value using the
and every three (3) years thereafter, the amount of
Consumer Price Index as published by the National Statistics Office
P10,000.00 shall be adjusted to its present value using the
(NS0);
Consumer Price Index, as published by the NSO;
Sale, importation, printing or publication of books and any newspaper, r.
magazine, review, or bulletin which appears at regular intervals with
same
fixed prices for subscription and sale and which is not devoted
principally to the publication of paid advertisements;
s. Sale importation or lease of passenger or cargo vessels and
aircraft, including engine, equipment and spare parts thereof
for domestic or international transport operations; Provided,
that the exemption form VAT on the importation and local
purchase of passenger and /or cargo vessels shall be limited
to those of one hundred fifty (150) tons and above, including
engine and spare parts of said vessels; Provided, further, that
the vessels to be imported shall comply with the age limit
requirement, at the time of the acquisition counted from the
date of the vessel's original commissioning, as follows;
Passenger and/or cargo vessels - 15yrs. Old
Tankers - 10 yrs. Old
High-speed passenger crafts - 5 yrs. Old
t.
INPUT TAX means the VAT due on or paid by a VAT-registered person on importation of goods or local
purchases of goods, properties, or service, including lease or use of properties, in the course of his trade
or business.
SOURCES OF INPUT TAX
Purchase or importation of goods upon payment of VAT prior to the release of goods from
customs.
Purchase of real properties for which a VAT has actually been paid upon consummation of the
sale.
Purchase of services in which a VAT has actually been paid upon payment of the fee,
compensation.
Transactions deemed sale
Transitional input tax
OLD LAW
Allowed input tax on his beginning inventory of goods,
materials and supplies equivalent for eight percent (8%) of the
value of such inventory or the actual value-added tax paid on
such goods, materials and supplies, whichever is higher, which
shall be creditable against the output tax.
Covered:
NEW LAW
Shall be two percent (2%) of the value of the beginning
inventory on hand or actual VAT paid on such, goods,
materials and supplies, whichever is higher, which
amount shall be creditable against the output tax of VATregistered person.
1. Taxpayers who became VAT-registered persons upon exceeding the minimum turnover of
P1,500,000.00 in any 12-month period, or who voluntarily register even if their turnover
does not exceed P1,500,00.00(except franchise grantees of radio and television whose
threshold is P10,000,000.00).
2. Non-VAT taxpayer who voluntarily register even if their turnover does not exceed P1.5M.
NEW LAW
1) Persons or firms engaged in the processing of sardines,
mackerel, and milk, and in manufacturing refined sugar,
cooking oil and packed noodle-based instant meals, shall be
allowed a presumptive input tax, creditable against the
output tax, equivalent to four (4%) of the gross value in
money of their purchases of primary agricultural products
which are used as inputs to their production.
none
Input Tax
Input Tax
Input Tax
Expense or cost
Total sales
Taxable sales to govt.
Total sales
Exempt sales
Total sales
INVOICING REQUIREMENTS
A VAT-registered person shall issue:
For every sale, barter or exchange of goods or properties
- VAT invoices
For every sale barter or exchange of services or lease of goods or properties VAT official
receipts
Information needed in the VAT Invoice or VAT Official Receipt:
Name and business address of seller/taxpayer;
TIN of taxpayer followed by the word VAT;
(NEW LAW) Name, business address and TIN of buyer; if sale P1,000.00 or more.
(NEW LAW) The amount of VAT shown as a separate item;
(NEW LAW) Date of transaction, quantity, unit cost and description of the goods properties or the
nature of the service;
(NEW LAW) Authority to Print details and serial number of booklets at the lower left corner of
receipt.
The word VAT EXEMPT SALE written or printed prominently if sale is VAT-exempt;
The words ZERO-RATED SALE written or printed prominently is sale is subject to zero percent.
Option to issue combined or separate invoices/receipts for a mixed transactions. The invoice or receipt should
indicate the breakdown of the sale price between the taxable and the exempt component and the calculation of
the VAT.
For
2550 M
A) Non-large Taxpayer
B) Large Taxpayer
Manual
EFPS
2550 Q
This return is filed not later than the 25th day following the close of each taxable
quarter. The term "taxable quarter" shall mean the quarter that is synchronized to the
income tax quarter of the taxpayer (i.e. Calendar quarter of Fiscal Quarter)
Where to File and Pay 2550M & 2550Q return shall be filed with, an VAT due thereon under the jurisdiction the
Revenue District/BIR Office where the taxpayer (head office of the business establishment) is required to be
registered.
Only one consolidated quarterly VAT return or monthly VAT declaration covering the results of the head office as
well as the branches for all lines of business subject to VAT shall be filed by the taxpayer, for every return period
with the BIR Office.
Submission of Quarterly Summary List of Sales and Purchases
Lists of Sales All persons liable for Vat with quarterly total sales/receipts (net of Vat) exceeding Two
Million Five
Hundred Thousand Pesos (P2,500,000.00).
(1.) BIR-registered name of the buyer who is engaged in business/exercise of
profession;
(2.) TIN of the buyer (Only for sales that are subject to VAT);
(3.) Zero-rated Sales;
(4.) Sales Subject to VAT (exclusive of VAT);
(5.) Sales Subject to Final VAT Withheld; and
(6.) Output Tax (VAT on sale subject to 10%)
Total amount of sales shall be system-generated
List of Purchases All persons liable for VAT such as manufacturers, service-providers, among other,
with quarterly total purchases (net of VAT) exceeding One Million Pesos (P1,000,000.00).
>Shall be submitted in diskette form to the RDO or LTDO or LTAD having jurisdiction over the taxpayer on or
before the twenty-fifth (25th) day of the month following the close of the taxable quarter. Under EFPS on or
before the thirtieth (30th) day of the month following the close of the quarter.
NEW LAW
Shall withhold a final VAT due at the rate of five percent (5%)
of the gross payment thereof.