Beruflich Dokumente
Kultur Dokumente
– Special Rate: 0%
Exempt
Sale of goods or properties
Sale of services
Importation of goods
VAT is imposed and collected on:
Every sale, barter or exchange, or
Transactions deemed sale of taxable goods or
properties.
Output Tax
For sale of goods, the VAT shall be based on gross
sales. Thus, the following entries may be followed:
c. Sales returns
Dr Sales Returns and Allowances xxx
Output Tax xxx
Cr Cash/Accounts Receivable xxx
Journal Entries – Output Tax
10,000,000
= 8,928,571 (highest amount)
1.12
Note: Selling price did not show VAT separately. So deemed inclusive
of VAT.
Sale of real property on installment plan
► In case of installment sale, the seller shall be subject to output
VAT on the installment payments received, including the
interests and penalties for late payment, actually and/or
constructively received, subject to the provisions of Sec. 4.106-
4* of RR 16-2005 as amended. (*Section 4.106-4 refers to the
definition of gross selling price)
► The buyer of the property can claim the input tax in the same
period that the seller recognized the output tax.
► Installment payments, including interests and penalties, actually
and/or constructively received starting February 1, 2006 shall
be subject to 12% output VAT
Sale of real property on installment plan
► If zonal value/fair market value > consideration/selling
price (exclusive of the VAT):
Actual Collection of the Consideration (exclusive of the VAT)
Zonal value
VAT = x x 12%
or FMV**
Agreed consideration* (exclusive of the VAT)
Problem:
Compute output VAT due on installment payment.
Solution:
Sec. 109 (2): A VAT-registered person may elect that Subsection (1) not
apply to its sale of goods or properties or services. Provided, That an
election made under this Section shall be irrevocable for a period of 3 years
from the quarter the election was made. (Subsection (1) enumerates
transactions that are exempt from VAT).
The VAT shall not apply to goods or properties which are originally intended
for sale or for use in the course of business existing as of the occurrence of
the following: (as amended by RR No. 10-2011 dated July 1, 2011)
A Corporation
• Exchange will lead to Corporate
(Mdsg business)
Control by N of A Corp.
P1 million inventory
A Corp’s inventory of goods is not subject to VAT
despite the change in corporate control because A
Corp. still owns these goods. The personality of
the corporation is separate and distinct from its
stockholders.
Domestic common carriers by air and sea are subject to 12% VAT
on their gross receipts from their transport of passengers, goods,
or cargoes from one place in the Philippines to another place in the
Philippines.
VAT on Sale of Electricity
RR No. 16-2005
►Sale of electricity by generation, transmission, and distribution companies
shall be subject to 12% VAT on their gross receipts;
►Provided, That sale of power or fuel generated through renewable sources of
energy such as, but not limited to, biomass, solar, wind, hydropower,
geothermal, ocean energy, and other emerging energy sources using
technologies such as fuel cells and hydrogen fuels shall be subject to 0%
VAT.
VAT on Sale of Electricity
“Gross Receipts” for the purpose of computing VAT on the sale of electricity
shall refer to the following:
Includes:
a. Total amount charged by generation companies for the sale of
electricity and related ancillary services; and/or
b. Total amount charged by transmission companies for transmission of
electricity and related ancillary services; and/or
c. Total amount charged by distribution companies and electric
cooperatives for distribution and supply of electricity, and related
electric service.
RMC No. 8-2012 dated February 29, 2012 (in relation to Supreme
Court En Banc Decision, G.R. No. 172087 dated March 15, 2011)
► The SC En Banc Decision revokes certain provisions of RR No.
16-05 imposing a 10% VAT on the Philippine Amusement and
Gaming Corporation (PAGCOR) since PAGCOR is exempt from
VAT under RA No. 9337.
The gross receipts on non-life insurance companies shall mean
total premiums collected, whether paid in money, notes, credits or
any substitute for money.
Non-life reinsurance premiums are not subject to VAT. (RR No.
04-2007 dated February 7, 2007)
Insurance and reinsurance commissions, whether life or non-life,
are subject to VAT.
The VAT due from the foreign reinsurance company is to be
withheld by the local insurance company and to be remitted to the
BIR by filing the monthly remittance return of VAT withheld (BIR
Form 1600).
VAT Ruling No. 6-2001 dated February 16, 2001
For non-life insurance companies, the computation of VAT on
premium should not include DST, fire service tax and local
government tax. The BIR shall not consider it a violation of
law and regulations for non-life insurance companies if the
tax base or the premium on its invoice will be separately
indicated to identify the amount of taxes properly pertaining
to VAT, DST, fire service tax and local taxes.
Pre-need Companies
Are corporations registered with the Securities and Exchange
Commission and authorized/licensed to sell or offer for sale
pre-need plans, whether a single plan or multi-plan.
They are engaged in business as seller of services providing
services to plan holders by managing the funds provided by
them and making payments at the time of need or maturity of
the contract.
As service providers, the compensation for their services is
the premiums or payments received from the plan holders.
Tax base = compensation for their services which is the
premiums of payments received from their planholders
The phrase “sale or exchange of services” shall include:
1. The lease or the use of or the right or privilege to use
any copyright, patent, design or model, plan, secret
formula or process, goodwill, trademark, trade brand
or other like property or right;
2. The lease or the use of, or the right to use any
industrial, commercial, or scientific equipment;
3. The supply of scientific, technical industrial or
commercial knowledge or information;
4. The supply of any assistance that is ancillary and
subsidiary to and is furnished as a means of enabling
the application or enjoyment of any such property, or
right as is mentioned in subparagraph (2) or any such
knowledge or information as is mentioned in
subparagraph (3);
5. The supply of services by a non-resident person or his
employee in connection with the use of property or
rights belonging to, or the installation or operation of
any brand, machinery or other apparatus purchased
from such nonresident person;
6. The supply of technical advice, assistance or services
rendered in connection with technical management or
administration of any scientific, industrial or
commercial undertaking, venture, project or scheme;
7. The lease of motion picture films, films, tapes, and
discs; and
8. The lease or the use of, or the right to use, radio,
television, satellite transmission and cable television
time.
Treatment of Reimbursements
► RMC No. 65-2012 dated October 31, 2012 – Clarifying the Taxability
of Association Dues, Membership Fees and other
Assessments/Charges Collected by Condominium Corporations
In General
“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.
The person making the exempt sale of goods, properties, or
services shall not bill any output tax to his customers
because the said transaction is not subject to VAT.
A. Sale or importation of agricultural and marine food products in
their original state, livestock and poultry of a kind generally used
as, or yielding or producing foods for human consumption; and
breeding stock and genetic materials therefor.
B. Sale or importation of fertilizers; seeds, seedlings and fingerlings;
fish, prawn, livestock and poultry feeds, including ingredients,
whether locally produced or imported, used in the manufacture of
finished feeds (except specialty feeds for race horses, fighting
cocks, aquarium fish, zoo animals and other animals generally
considered as pets);
C. Importation of personal and household effects belonging to
residents of the Philippines returning from abroad and non-
resident citizens coming to resettle in the Philippines: Provided,
that such goods are exempt from customs duties under the Tariff
and Customs Code of the Philippines;
D. Importation of professional instruments and implements, wearing
apparel, domestic animals, and personal household effects
(except any vehicle, vessel, aircraft, machinery, other goods for
use in the manufacture and merchandise of any kind in
commercial quantity) belonging to persons coming to settle in
the Philippines, for their own use and not for sale, barter or
exchange, accompanying such persons, or arriving within ninety
(90) days before or after their arrival, upon the production of
evidence satisfactory to the Commissioner of Internal Revenue,
that such persons are actually coming to settle in the Philippines
and that the change of residence is bona fide;
E. Services subject to percentage tax under Title V;
F. Services by agricultural contract growers and milling for others of
palay into rice, corn into grits and sugar cane into raw sugar;
G. Medical, dental, hospital and veterinary services except those
rendered by professionals;
• Laboratory services are exempted. If the hospital or clinic operates
a pharmacy or drug store, the sale of drugs and medicine is subject
to VAT.
*Threshold is now P450,000 for house and lot and for lot only,
PhP180,000
*The supplier was required to apply for effective zero-rating of their sales in
order for the transaction to be zero-rated. Without an approved application,
the transaction was merely considered exempt.
The following sales of goods or properties by VAT-registered
persons shall be subject to zero percent (0%) rate:
a. Export Sales
1. 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 in goods or services, and accounted for in
accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas (BSP).
Zero-Rated Sales of Goods or Properties
a. Export Sales (cont’d)
2. The sale of raw materials or packaging materials to a non-
resident 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 the rules and regulations of the BSP.
3. The sale of raw materials or packaging materials to an
export-oriented enterprise whose export sales exceed
seventy percent (70%) of total annual production. Any
enterprise whose export sales exceed 70% of the total annual
production of the preceding taxable year shall be considered
an export-oriented enterprise.
Zero-Rated Sales of Goods or Properties
Dr Materials/Supplies, etc.
xxx
Cr Accounts Payable/Cash
xxx
Journal Entries – Input Tax
Dr Cost/Expenses xxx
Deferred Input Tax xxx
Cr Accounts Payable xxx
ii. Upon payment
RR No. 16-2005
Input tax on purchases or importation of capital goods which
are depreciable assets for income tax purposes, the aggregate
acquisition cost of which (exclusive of VAT) in a calendar month
exceeds P1 million, regardless of acquisition cost of each
capital good, shall be claimed as credit against output tax, as
follows:
1. If estimated useful life of a capital good is 5 years or more
Monthly input tax = Total Input Tax
60 months
Input Tax on Capital Goods
In case there are VAT and non-VAT activities, tax credit shall
be allowed as follows:
– Total input tax which can be directly attributed to
transactions subject to VAT; and
– A ratable portion of any input tax which cannot be directly
attributed to either activity.
Mixed Transactions
Input Tax Attributed to Exempt Activity
Exempt Sales
Common Input Tax X
Total Sales
Taxable Sales
Common Input Tax X
Total Sales
* This rule applies if there are no sales to the Government (RA No.
9337 and RR 16-2005)
Mixed Transactions
*Means the sale of real property by a real estate dealer, the initial payments of which in
the year of sale do not exceed 25% of the GSP.
Please note that even if the said events have already transpired (e.g.,
consummation of sale) but the required supporting documents are not
on hand, the input taxes may not be claimed.
• Any VAT taxpayer may apply for the issuance of a tax credit
certificate or refund of any input tax attributable to:
• zero-rated and effectively zero-rated sales;
• Cancellation of VAT registration
to the extent that such input tax has not been applied against
the output tax
Any VAT taxpayer may apply for the issuance of a
tax credit certificate or refund of any input tax (to
the extent not applied against output tax)
attributable to:
1. Zero-rated and effectively zero-rated sales;
File application within 2 years after close of taxable
quarter when such sales were made
2. Cancellation of VAT registration
Registration is cancelled due to retirement from, cessation
of business, or due to changes in or cessation of status as
VAT taxpayer
File application within 2 years from date of cancellation
TCC may be used in payment of his other internal revenue
liabilities
He shall be entitled to a refund if he has no internal
revenue tax liabilities against which the tax credit may be
utilized.
Administrative Requirements
Administrative Requirements
Bookkeeping Requirements
Registration Requirements
Filing of Returns
Payment of VAT
Summary Lists
Information Returns
SAWT and MAP
Subsidiary Sales and Purchases Journal
Revenue Memorandum Circular No. 51-87
1. Subsidiary Sales Journal – the daily sales should be
recorded in this journal which should at least contain
separate columns for the following:
– Sales - Export
– Sales - Zero-rated
– Sales - Exempt
– Sales - Taxable
– Deemed Sales
– Output Taxes
Subsidiary Sales and Purchases Journal
Revenue Memorandum Circular No. 51-87 (cont’d)
2. Subsidiary Purchases Journal – the daily purchases, both
local and imported, and other transactions affecting
purchases and input taxes should be recorded in this journal
which should at least contain separate columns for the
following:
– Purchases of goods for sale
– Purchases of supplies
– Purchases of raw materials
– Purchases of services
– Purchases of capital goods
– Purchases from non-VAT persons
– Input taxes
– Input tax deemed paid
Subsidiary Sales and Purchases Journal
The subsidiary sales and purchases journal shall
be registered for VAT purposes with the Collection
Agent of the city or municipality where the
principal place of business or head office of the
VAT taxpayer is located.
Subsidiary Record: Depreciable Assets/Capital Goods
RR No. 16-2005
A subsidiary record in ledger form should be
maintained for the acquisition, purchase or
importation of depreciable assets or capital
goods which shall contain, among others,
Information on the total input tax thereon,