Professional Documents
Culture Documents
- Husband and the wife shall be considered as If not VAT-registered and he will just
separate taxpayers. commence business, DEPENDS.
- Three branches of the government are not o A. If he will realize gross sales or
subject to tax. But it is taxable, if it sells goods receipts more than P1,919,500. YES
or services in the course of business.
o B. Otherwise. Exempted from VAT
- E x a m p l e : g o v e r n m e n t e n 4 4 e s a n d
instrumentali4es, including government-owned If not VAT-registered but his gross receipts is
or controlled corpora4ons approximately P60.00, NO. He is classied
as a marginal income earner.
- Scope:
Marginal income earner individual
o Sale, barter, or exchange of goods and deriving gross sales or receipts of
proper4es not exceeding P100,000 during any
12-month period.
o Sale of services
In the course of trade or business: If does
o Lease of goods and proper4es not exceed 100,000 during the 12 months,
o Importa4on of goods, whether in the it is considered principally for subsistence or
trade of course of business or not. livelihood
Taxable person person any liable for the Excis / VAT / May be subject to VAT and Excise at
the same 4me
payment of value-added tax e Tax
Persons subject to VAT : gross VAT X OPT X No situa4on where it can be subject to
VAT and OPT at the same 4me
annual receipts during any year If subject to OPT, no longer subject to
VAT
or in any 12-month period
exceed 1,919,500php or those OPT / Excise / If subject to OPT, can be subject to
excise tax
who does not exceed this Tax
amount, but registered under
the value-added tax system. Registra>on of VAT Taxpayers
(Either of the two will be liable
-any person who in the course of trade or
to pay the tax)
business, sells, barters, exchanges or engages in the sale
EXAMPLE : of service subject to VAT, shall register with the
appropriate Revenue District Ocer (RDO) and pay an twenty-ve days following the close of each
annual registra>on fee of P500 for every separate and taxable quarter.
dis4nct businesses before the start of such and every
year before the 31st day of January. - Monthly VAT declara>ons of a taxpayer, shall
be led and the taxes paid not later than the
Mandatory Registra>on: 20th day of the month
1. His gross sales or receipts for the past 12 - The return shall be led with the tax paid to an
months other than those exempt, have authorized agent bank, Revenue Collec4on
exceeded P1,919,500 Ocer, or duly authorized city or municipal
treasurer in the Philippines
2. There are reasons to believe hat his gross sales
or receipts for the next twelve months will Excess Output or Input Tax
exceed P 1,919,500
-input tax exceeds the output tax, excess shall be carried
Op>onal VAT Registra>on of VAT Exempt persons over to the succeeding quarter or quarters
- Any person who elects to be registered shall not VAT on Sale of Goods or Proper>es: Sec>on 106, Tax
be allowed to cancel his registra4on for 3 years. Code of the Philippines
- Taxpayer may apply for registra4on not later - Goods or proper4es shall mean all tangible
than ten days before the beginning of the and intangible objects which are capable of
calendar quarter pecuniary es4ma4on and shall include:
a. Real proper4es held primarily for sale to
- Commissioner of Internal Revenue may deny customers or held for lease in the ordinary
any applica4on for registra4on course of trade or business;
b. The right or the privilege to use patent,
- Once registered, he is liable to Output Tax and copyright, design or model, plan secret
be en4tled to input tax credit beginning the 1st formula or process, goodwill, trademark,
day of the month trade brand or other like property or right;
c. The right or the privilege to use in the
Cancella>on of Registra>on Philippines of any industrial, commercial or
scien4c equipment;
1. Only if he makes wricen applica4on where he d. The right or the privilege to use mo4on
can demonstrate to the CIR that his gross sales picture lms, lms, tapes and discs; and
e. Radio, television, satellite transmission and
will not exceed P1,919,500.
cable, television 4me.
2. He has ceased to carry on his trade or business - 12% of the gross selling price or gross value in
money of the goods or proper4es sold, bartered
Others: or exchanged, such tax to be paid by the seller
or transferor
1. Change of ownership
Gross selling price: total amount of
2. Dissolu4on of partnership money or its equivalent which the
3. Merger or consolida4on with respect to the purchaser pays or is obligated to pay to
dissolved corpora4on the seller in considera4on of the sale,
barter, or exchange of the goods or
4. Failed to actually start a business proper4es, including excise tax, if any
and excluding value-added tax.
Filling of return and payment of VAT
a. Inclusive of VAT mul4ply by 3/28 Tax base: refers to the amount on which
the 12% rate of the VAT is applied
Ex. VAT(112,000 x 3/28) = P12,000
Importer any person who brings Aqer 20 days, the goods intended for
goods into the Philippines, whether or sale were sold to Robin for P812,000.
not made in the course of trade or
business (sale, for use in the business Compute the VAT Payable on the
or for personal use)
12% tax based on the total value used 1. Importa4on if the tari and customs du4es
by the Bureau of Customs, plus customs were based on volume or quan4ty
du>es, excise taxes, if any and other
charges (legi4mate expenses only, for 2. Sale if the input tax is based on quan4ty of
example, facilita4on expenses are goods imported
illegal), insurance, freight, postage,
commission, interest, bank charges, - Computa4on (see the comments)
wharfage dues, arrastre charges,
brokerage fee, stamps, processing fee, Transfer of Goods by Tax-exempt Persons
customs duty, excise taxes, storage fee - In the case of tax free importa9on of goods into
and similar charges the Philippines by persons, en99es or agencies
- Payment of tax shall be made by the importer exempt from tax where such goods are
prior to the release of such goods from the subsequently sold, transferred or exchanged in
customs duty the Philippines to non-exempt persons or
enBBes, the purchasers, transferees or
o Customs du4es are determined on the recipients shall be considered the importers
thereof, who shall be liable for any internal
basis of the quan4ty or volume, VAT
revenue tax on such importa>on. The tax due
shall be based on the landed cost plus on such importa4on shall cons4tute a lien on
excise taxes the goods superior to all charges or liens on the
goods, irrespec4ve of the possessor thereof.
Landed cost = invoice amount + - Example:
c u sto m s d u 4 e s + f re i g ht Papa Libre, a tax-exempt person, imported
insurance + other charges goods from Japan. Later, he sold them to Mina
Malas, a non-exempt person. Who shall be
- Example: liable to pay the tax?
o Mina Malas shall be considered as the
Miranda imported goods from Japan. The importer and shall be required to pay
following are the data rela4ve to such the VAT due to such importa4on.
importa4on.
VAT on Sale of Services and Use or Lease of Proper>es:
For Sale Own Use Sec>on 108, Tax Code of the Philippines
-12% of gross receipts derived from the sale or
Invoice amount 9,500 3,000
exchange of services, including the use or lease of
(S1=42)
proper4es.
Du4able value 11,200 5,200 To be subject to VAT, the following requirements
must be sa4sed:
Customs du4es 10,500 3,100
1. The service must be performed in the
Freight 6,000 2,800 course of trade or business.
2. It must be performed in the Philippines
3. Considera4on must be received actually or h. Proprietors or operators of restaurants,
construc4vely refreshment parlors, cafes and other ea>ng
4. The transac4on is not exempt under the places, including clubs and caterers;
Code, special laws or interna4onal For both g and h:
agreements Gross receipts does not include:
Service charges billed
- Sale or exchange of services means the separately and actually
performance of all kinds of services, including distributed to employees and
the following: waiters
a. Those performed or rendered by construc>on Actual cost of the calls, fax,
and service contractors cable, etc. for the concerned
telecommunica4on companies
b. Stock, real estate, commercial, customs and VAT passed on to customers
immigra4on brokers Local taxes charged
broker- bring par4es together
or to bargain for them
custom broker engaged in i. dealers in securi>es;
transpor4ng with hired trucks for
delivery of goods for customers from
the customs premises to their place of j. Lending investors;
establishment for a fee
real estate broker- engaged in
selling of real property of others for a k. Transporta>on contractors on their
fee transport of goods or cargoes, including
commercial broker sh persons who transport goods or cargoes for
brokers, sales agent for a commission, hire and other domes4c common carriers by
agent or salesman in the buying & land rela4ve to their transport of goods or
selling of securi4es paid solely on cargoes;
commission Except:
o Exempt from VAT and subject to 20% PresumpBve Input Tax Credits.
- Persons or rms engaged in the processing of
discount.
a.sardines, b.mackerel, c.milk, d. rened sugar,
e. cooking oil and f.packed noodle based
instant meals, shall be allowed a presump9ve
input tax, creditable against the output tax,
Tax Credits: Sec>on 110, Tax Code of the Philippines
equivalent to four percent (4%) of the gross
value in money of their purchases of primary
Creditable Input Tax.
agricultural products which are used as inputs
- Any input tax evidenced by a VAT invoice or
to their produc4on.
ocial receipt issued in accordance with Sec4on
As used in this Subsec4on, the term
113 hereof on the following transac4ons shall
'processing' shall mean pasteuriza9on, canning
be creditable against the output tax:
and ac9vi9es which through physical or
(a) Purchase or importa4on of goods:
chemical process alter the exterior texture or
(i) For sale; or
form or inner substance of a product in such
(ii) For conversion into or intended to
manner as to prepare it for special use to which
form part of a nished product for sale
it could not have been put in its original form or
including packaging materials; or
condi4on."
(iii) For use as supplies in the course of
business; or
(iv) For use as materials supplied in the Sale of non-food agricultural, marine and other forest
sale of service; or
products in their original state by the primary producer
(v) For use in trade or business for
which deduc4on for deprecia4on or or owner of the land
amor4za4on is allowed under this Code.
o Sale of cocon and cocon seeds in their
(b) Purchase of services on which a value-added
tax has actually been paid. original state
(2) The input tax on domes4c purchase or importa4on
of goods or proper4es by a VAT-registered person shall
o Sale of importa4on of coal and natural
be creditable: gas
(a) To the purchaser upon consumma>on of
sale and on importa4on of goods or proper4es; o Sale of importa4on of petroleum
and products, including raw materials
(b) To the importer upon payment of the value-
added tax prior to the release of the goods from o Sale by the ar4st (art, literary works,
the custody of the Bureau of Customs. musical composi4ons, or services
performed)
o Services rendered by doctors of (TIN) of the purchaser, customer or
medicine (PRC) and by lawyers client
(Integrated Bar of the Philippines)
VAT PAYABLE:
o Common carriers by air and sea rela4ve
Output Tax (sale) Pxx
o Toll road opera4ons
Less: Input tax (purchase) (xx)
o Sale of electricity by genera4on,
VAT Payable xx
t r a n s m i s s i o n a n d d i s t r i b u 4 o n
companies
1. To record cash purchases/ sales of merchandise
Sale by electric coopera4ves
A. In the books of the buyer
Invoicing and Accoun>ng Requirements for VAT Purchases xx
Registered Persons: Sec>on 113, Tax Code of the Input Tax xx
Philippines Cash xx
B. In the books of the seller
- Invoicing Requirements - A VAT-registered Cash xx
person shall issue:
Sales xx
a. A VAT invoice for every sale, barter
or exchange of goods or proper4es; Output Tax xx
and 2. To record the VAT Payable at the end of the quarter
b. A VAT ocial receipt Output Tax xx
InformaBon Contained in the VAT Invoice or Input Tax xx
VAT Ocial Receipt: VAT payable xx
a. A statement that the seller is a VAT- 3. To record payment of the VAT to the BIR
registered person
VAT Payable xx
b. taxpayer's iden>ca>on number
(TIN); Cash xx
c. The total amount which the 4. To record purchases/sales on account,
purchaser pays or is obligated to a. In the books of the seller:
pay tax with: Accounts Receivable xx
a. The amount of the tax in a Sales xx
separate item
Output Tax xx
b. If exempt, VAT-exempt sale
shall be wricen b. In the books of the buyer:
c. If zero-VAT, zero-rated sale Purchases xx
shall be wricen Input Tax xx
d. If subject to the three, the Accounts Payable xx
invoice or receipt shall 5. To record collec>on/payment of sale s/purchases on
clearly indicate which are account within the discount period
VAT, VAT-exempt and zer-
a. In the books of the seller
rated and the breakdown
d. The date of transac>on, quan>ty, Cash xx
unit cost and descrip>on of the Sales Discount xx
goods or proper>es or nature of Output Tax xx
the service Accounts Receivable xx
e. In case of sales in the amount of b. In the books of the buyer
one thousand pesos or more, where Accounts Payable xx
the sale or transfer is made to a
Purchase discount xx
VAT-registered person, the name,
business style, if any, address and Input Tax xx
taxpayer iden>ca>on number Cash xx
6. To record in the books of the buyer the payment of
freight on goods purchased on credit (FOB des>na>on,
freight collect)
Accounts Payable xx
Cash xx
7. To record in the books of the buyer the payment of
transporta>on cost of the goods purchased (FOB
shipping point, freight collect)
Freight In xx
Input Tax xx
Cash xx
8. To record return of goods purchased/sold and
receipt/ payment of cash
a. In the books of the buyer
Cash xx
Input Tax xx
Cash xx
b. In the books of the seller
Sales returns and allowances xx
Output Tax xx
Cash xx
9. To record transi>onal input tax of a new VAT-taxable
establishment
Input Tax xx
Merchandise Inventory xx
10. To record deemed sale transac>on on VAT-subject
goods for sale which were withdrawn by the owner for
his personal use
John Doe, Drawing xx
Output Tax xx
Inventory xx
11. To record presump>ve input tax on the purchase of
sugar cane by sugar renery
Raw materials xx
Input Tax xx
Cash xx
12. To record sales of merchandise during the day
which consist of VAT-subject and VAT-exempt goods
Cash
Output Tax