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-A-

Aggregate Acquisition Cost. Refers to


the total price, excluding VAT, agreed upon
for one or more assets acquired and not on
the payments actually made during the
calendar month.

-B-


Business. Regular conduct of activity
which occupies the time, labor, and efforts
of men for the purpose of deriving profit as
a means or source of livelihood.
Business Tax. Taxes imposed upon
onerous transfers such as sale, barter,
exchange or importation.

-C-

Capital goods or properties. Refers to
goods or properties with estimated useful
life greater than one (1) year and which are
treated as depreciable assets under Sec.
34(F) of the NIRC, used directly or
indirectly in the production of sale of
taxable goods or services.
Common Carrier. Refers to persons,
corporations, firms or associations engaged
in the business of carrying or transporting
passengers or goods or both, by land, water,
or air, for compensation, offering their
services to the public and shall include
transportation contractors.
Constructive Receipt. Occurs when the
money consideration or its equivalent is
placed at the control of the person who
rendered the service without restrictions by
the payor.
Creditable Input Tax. Any input tax on
transactions evidenced by a VAT invoice or
official receipt issued by a VAT-registered
person and creditable against output tax.
Cross Border Doctrine. No VAT shall be
imposed to form part of the cost of the
goods destined for consumption outside the
territorial border of the taxing authority.

-D-

Distribution Companies. Refer to
persons or entities which operate a
distribution system in accordance with the
provisions of the EPIRA.
Documentary Stamp Tax. A national tax
levied upon a right or privilege. It is a
charge on transactions evidenced by stamps
required to be attached in corresponding
documents, instruments, and papers.
Draft. A written order to pay a certain
amount of money, signed by the drawer,
payable on demand or at a definite time,
and to order or bearer.

-E-

Excise Tax. A tax imposed on goods
manufactured or produced in the
Philippines for domestic sales or
consumption or for any other disposition,
and goods imported.

-F-

For subsistence or livelihood. Any
business pursued by an individual where the
aggregate gross sale or receipts do not
exceed P100,000 during any 12-month
period.
Foreign Bill of Exchange. A bill of
exchange drawn in one country upon
another country not governed by the same
homogeneous laws, or not governed
throughout by the same municipal laws.
Foreign Currency Denominated Sale.
Means the sale to a non-resident of goods,
except those mentioned in Secs. 149 and 150
of the NIRC, assembled or manufactured in
the Philippines for delivery to a resident in
the Philippines, paid for in acceptable
foreign currency and accounted for in
accordance with the rules and regulations of
the BSP.
-G-

Garage. A closed shelter for automobiles; a
business establishment where automobiles
are repaired, stored, maintained, tuned-up,
cared, etc.
Generation Companies. Refer to
persons or entities authorized by the Energy
Regulation Commission to operate facilities
used in the generation of electricity.
Gross Selling Price. Means the total
amount of money or its equivalent which
the purchaser pays or is obligated to pay to
the seller in consideration of the sale, barter
or exchange of the goods or properties,
excluding VAT.

-I-

Importer. Refers to any person who brings
goods into the Philippines, whether or not
made in the course of his trade or business.
In the course of Trade or Business.
Means the regular conductor pursuit of a
commercial or an economic activity,
including transactions incidental thereto, by
any person regardless of whether or not the
person engaged therein is a non-stock, non-
profit private organization or government
entity.
Initial Payments. Pertain to all payments
which the seller receives on or before the
execution of the instrument of sale,
including cash or property received, other
than the purchasers evidence of
indebtedness, during the calendar year
when the real property was sold.
Input Tax. The VAT due from or paid by a
VAT-registered person in the course of his
trade or business on importation of goods or
local purchases of goods, or services,
including lease or use of property, from a
VAT-registered person. (Sec. 110A, NIRC)

-M-

Mixed Business Transactions. Refer to
business dealings of a VAT-registered
person engaged in a combination of sales
subject to VAT, Zero-rated VAT, and VAT
exempt transactions.

-O-

Output Tax. The VAT due on the sale or
lease of taxable goods or properties or
services by any person registered or
required to register under VAT. (Sec. 110A,
NIRC)

-P-

Percentage Tax. It is a tax imposed on
sale, barter, exchange or importation of
goods or sale of services based upon gross
sales, value in money or receipts derived by
the manufacturer, producer, importer, or
seller measured by certain percentage of the
gross selling price or receipt.
Policy of Annuity. An insurance policy
providing for monthly payments of the
insured person beginning at a fixed rate and
will continue throughout the insured
persons life.
Policy of Insurance. An instrument in
writing, by which one party called the
insurer, in consideration of a premium,
engages to indemnify another called the
insured against a contingent loss, by making
a payment in compensation, whenever the
event shall happen by which the loss is to
accrue.
Processing. Means pasteurization,
canning, and activities which through
physical or chemical process alter the
exterior texture or form or inner substance
of a product in such a manner as to prepare
it for special use to which it could not have
been put in its original form or condition.

-Q-

Quasi-banking Activities. Refer to
borrowing funds from twenty or more
lenders at any one time, through issuance,
endorsement or acceptance of debt
instruments, or through the issuance of
certificates of assignments for the purpose
of re-lending or purchasing receivable and
other similar obligations.

-R-

Real Estate Lessor. Includes any person
engaged in the business of leasing or
subleasing real property.
Residential Unit. Refer to apartments
and houses and lots used for residential
purposes, and buildings or parts or units
thereof used solely as dwelling places except
motels, motel rooms, hotels, hotel rooms,
lodging houses, inns, and pension houses.

-S-

Sale on Deferred Payment. A sale which
has initial payments exceeding twenty-five
percent (25%) of the gross selling price.
Sale on Installment Plan. A sale which
has initial payments not exceeding twenty-
five percent (25%) of the gross selling price.
Standard Input Tax. Input tax
attributable to VAT sales to the Government
not creditable against output tax on sales to
non-Government entities.
Summary List of Sales/Purchases.
Required to be submitted by all persons
liable for VAT such as manufacturers,
service-providers, among others.

-T-

Technical Importation. Sale of goods by
PEZA registered enterprise to a buyer from
the customs territory. Such buyer shall be
treated as an importer thereof and shall be
imposed with the corresponding import
taxes.
Transmission Companies. Refer to any
person or entity that owns and conveys
electricity through the high voltage
backbone system and/or sub transmission
needs.

-V-

Value Added Tax. It is a tax on
consumption levied on the sale, barter,
exchange or lease of goods or properties or
services in the Philippines and on
importation of goods into the Philippines.
VAT Invoice. Issued by a VAT-registered
person for every sale, barter, or exchange of
goods or properties.
VAT Official Receipt. Issued by a VAT-
registered person for every lease of goods or
properties and for every sale, barter or
exchange of services.
VAT-Exempt Person. Refers to any
person who is not liable to pay VAT.
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 of VAT (input tax)
on purchases.
VAT-Registered Person. Refers to a VAT
person who is registered in accordance with
the law or who opted to be registered as a
VAT person.
VAT-Registrable Person. Refers to any
person who is required to register but failed
to do so.

-Z-

Zero-rated sales. Sales which result to
zero (0) output tax since the tax rate applied
to the tax base is zero percent (0%).