Sarong, Ester E.

TAX 2

CBE 19-607P Prof. Marasigan

WRITTEN REPORT
MIXED BUSINESS TRANSACTION
A vat registered person may be engaged in a combination of sales subject to VAT, Zero-
Rated Vat, and VAT EXEMPT Transactions. For Vat purposes, this is known as mixed business
transactions. The main concerned in business transaction is the allocation or apportionment of
input vat.
A Vat registered person who is also engaged in transactions not subject to Vat shall be allowed
of Input tax credit as follows:
Total Input Tax – which can be directly attributed to transactions subject to vat except

 Vat taxable sales of goods and services to the government or GOCCs

Ratable Portion – any input tax which cannot be directly attributed to either activity
( allocation hall be on the basis of sales volume )
REFUND OF INPUT VAT
1. Zero-Rated Sales – any vat registered person, whose sales are zero-rated or effectively zero
rated may, within two (2) years after the close of the taxable quarter when the sales were made,
apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales, except applied against output tax.
2. Unused Input Tax of Person who Retired or Ceased Business – The tax payer should apply for
the issuance of tax certificate for any unused input ta which he may use in payment of his other
internal revenue taxes. He shall be entitled to a refund if he has no internal revenue tax liabilities.
The application should be made within two (2) years from the date of cancellation.
INVOICING REQUIREMENT
A Vat Registered person shall issue:
1. A vat invoice in every sale, barter or exchange of goods or properties
2. A vat official receipt for every lease of goods or properties and for every sale, barter or
exchange of goods.
SINGLE INVOICE/receipt involving VAT and NON-VAT transactions
A vat registered taxpayer may issue a single invoice/ receipt involving VAT and NON-VAT
transactions provided that the invoice or receipt shall clearly indicate the breakdown of the sales
price between its taxable, exempt and zero-rated components and the calculation of the value-
added tax on each portion of the sale shall be shown on the invoice or receipt.

SEPARATE INVOICES/ receipts involving VAT and NON-VAT transaction

A VAT registered person may issue separate invoices, receipts for the taxable, exempt, and zero-
rated component of its sales provided that if the sales is exempt from the value added tax, the
term “VAT-EXEMPT SALE” shall be written or printed prominently on the invoice or receipt and if
the sale is subject to 0% VAT, the term, “VAT-EXEMPT SALE” shall be written or printed
prominently on the invoice or receipt.