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Description
Value-Added Tax is a form of sales tax. It 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 into the Philippines. It is an indirect tax, which may be shifted or passed on to the
buyer, transferee or lessee of goods, properties or services.
Who are required to file vat returns?
Any person or entity who, in the course of his trade or business, sells, barters,
exchanges, leases goods or properties and renders services subject to VAT, if the
aggregate amount of actual gross sales or receipts exceed One Million Nine Hundred
Nineteen Thousand Five Hundred Pesos (P1,919,500.00).
Any person, whether or not made in the course of his trade or business, who imports
goods
File the Monthly VAT declaration, together with the required attachments,
and pay the VAT due thereon with any Authorized Agent Bank (AAB)
In places where there are no duly accredited agent banks, file the Monthly
VAT declaration, together with the required attachments and pay the VAT
due with the Revenue Collection Officer (RCO) or duly authorized
Treasurer of the Municipality where such taxpayer (head office of the
business establishment) is registered or required to be registered.
3. If there is no payment:
File the Monthly VAT Declaration, together with the required attachments
with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent
or duly authorized Municipal/ City Treasurer of Municipality/City where the
taxpayer (head office of the business establishment) is registered or
required to be registered.
Deadline
Manual Filing
Not later than the 20th day following the end of each month
Group A
Insurance and Pension
Funding
Activities Auxiliary to Financial Intermediation
Construction
Water Transport
Hotels and Restaurants
Land Transport
Group B
Manufacture
Manufacture
Manufacture
Manufacture
Manufacture
Tax Form
BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)
Attachments to the Return
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if
applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to
Withholding Tax At Source (SAWT), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Previously filed return and proof of payment, for amended return
6. Authorization letter, if return is filed by authorized representative
Procedures
1. Fill-up BIR Form 2550Q in triplicate copies (two copies for the BIR and one copy for
the taxpayer)
2. If there is payment:
File the Quarterly VAT Return, together with the required attachments,
and pay the VAT due thereon with any AAB under the jurisdiction of the
RDO/LTDO where the taxpayer (head office of the business establishment)
is registered or required to be registered.
The taxpayer must accomplish and submit BIR- prescribed deposit slip,
which the bank teller shall machine validate as evidence that payment
was received by the AAB. The AAB receiving the tax return shall stamp
mark the word "Received" on the return and machine validate that return
as proof of filing the return and payment of the tax.
In places where there are no duly accredited agent banks, file the
Quarterly VAT Return, together with the required attachments and pay the
VAT due with the Revenue Collection Officer (RCO) or duly authorized
Treasurer of the Municipality where such taxpayer (head office of the
business establishment) is registered or required to be registered.
The RCO or duly authorized Municipal/City Treasurer shall issue a Revenue Official
Receipt upon payment of the tax.
3. If there is no payment:
File the Quarterly VAT Return, together with the required attachments
with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent
Tax Rates
On sale of goods and properties - twelve percent (12%) of the gross selling price or
gross value in money of the goods or properties sold, bartered or exchanged
On sale of services and use or lease of properties - twelve percent (12%) of gross
receipts derived from the sale or exchange of services, including the use or lease of
properties
On importation of goods - twelve percent (12%) based on the total value used by the
Bureau of Customs in determining tariff and customs duties, plus customs duties,
excise taxes, if any, and other charges, such as tax to be paid by the importer prior to
the release of such goods from customs custody; provided, that where the customs
duties are determined on the basis of quantity or volume of the goods, the VAT shall
be based on the landed cost plus excise taxes, if any.
Issuance No.
RR No. 13-2008
Subject Matter
Consolidated Regulations on Advance Value-Added Tax on the Sale of Refined
Sugar; Amending and/or Revoking All Revenue Issuances Issued to this Effect,
and
for
Other Related
Purposed
Date of Issue
September 9,
2008
December 5,
Sugar
as
in
Taliba
Provided
on
for
March
in
RR
31,
2-2004
2004)
2007
August 28,
2007
May 9, 2007
March 20,
2007
January 11,
2007
October 19,
2005
May 21, 2004
March 26,
2004
February 26,
2004
December 1,
2003
November 20,
2003
October 9,
RR No. 8-2002
RR No. 2-98
in
Philippine
Star
on
December
22,
2003
February 4,
2003
December 20,
2002
2002)
June 24,
2002
Issuance No.
Subject Matter
RMO No. 3-2009 Amendment and Consolidation of the Guidelines in the
Date of Issue
January 23,
RMO No.
RMO No.
2007
RMO No.
RMO No.
2005
RMO No.
2004
RMO No.
RMO No.
2002
RMO No.
RMO No.
2009
February 20,
2008
July 23,
2007
February 28,
2006
October 21,
2005
February 4,
2004
December 11,
2002
March 29,
2000
November 5,
1999
personnel
Digest
RMO No. 40-94 Prescribing the Modified Procedures on the Processing
of Claims for VAT Credit/ Refund
REVENUE MEMORANDUM CIRCULARS (RMCs)
Issuance No.
RMC No. 772008
Subject Matter
Taxability of Directors Fees Received By Directors Who
are not Employees of the Corporation for VAT or
Percentage Tax Purposes as Espoused Under Revenue
Memorandum
Circular
No.
34-2008
Digest | Full Text
Clarification of Issues Concerning Common Carriers by
Air and Their Agents Relative to the Revenue and
Receipt from Transport of Passengers, Goods/Cargoes
and
Mail,
and
from
Excess
Baggage
Digest | Full Text
Tax Treatment of Directors Fees for Income Tax and
Business
Tax
Purposes
Digest | Full Text
Clarifying the Effect of Suspension of RR No. 6-2007,
Otherwise Known As the "Consolidated Regulations on
Advance Value-Added Tax on the Sale of Refined Sugar,
Amending and/or Revoking All Revenue Issuances
Issued to this Effect and for Other Related Purposes"
Digest | Full Text
Reiteration of the Amendment Made by RA No. 9337
Imposing VAT on the Sale of Non-Food Agricultural
Products, Marine and Forest Products and on the Sale
of Cotton and Cotton Seeds in their Original State
Digest | Full Text
Clarifying the Income Tax and VAT Treatment of Agency
Fees/Gross Receipts of Security Agencies Including the
Withholding
of
Taxes
Due
Thereon
Digest | Full Text | Annex A
Clarifying the Proper VAT and EWT Treatment of Freight
and Other Incidental Charges Billed by Freight
Forwarders
Digest | Full Text
Value Added Tax (VAT) on the Construction or
Renovation of Official Buildings or Properties of the
United
States
of
America
Embassy
Digest | Full Text | Annex A
Prescribing
the
Submission
of
a
Narrative
Memorandum Report to Accompany the VAT Credit
Evaluation Report and Requiring the Attachment of
Certain Documents Prior to Approval of the Tax Credit
Certificate (TCC) Recommended by the Tax and
Revenue Group (TRG), Department of Finance OneStop Shop Inter-Agency Tax Credit and Duty Drawback
Center
(DOF-OSS)
Digest | Full Text
Date of Issue
December 3,
2008
June 20,
2008
April 18,
2008
September 14,
2007
August 7,
2007
June 13,
2007
June 30,
2006
May 30,
2006
May 22,
2006
April 6, 2006
April 6, 2006
February 1,
2006
January 20,
2006
December 22,
2005
December 8,
2005
November 3,
2005
October 20,
2005
October 3,
2005
July 1,
2005
November 23,
2004
September 23,
2004
2004
June 16,
2004
February 20,
2004
January 7,
2004
January 22,
2003
October 8,
2003
August 27,
2003
July 23,
2003
May 21,
2003
RMC No. 562002
RMC No. 452001
RMC No. 282001
RMC No. 25-99
Memorandum
Circular
No.
28-2003
Digest | Full Text
Taxability of Health Maintenance Organizations (HMOs)
for
VAT
purposes
Digest
Taxability of Pawnshop Operators for VAT Purposes
2003
December 18,
2002
May 3,
1999
October 12,
2001
July 2,
2001
March 18,
1999
Codal Reference
Title IV, Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
FREQUENTLY ASKED QUESTIONS
I. General VAT Queries
Who are liable to register as VAT taxpayers?
Any person who, in the course of trade or business, sells, barters or exchanges goods or
properties or engages in the sale or exchange of services shall be liable to register if:
a. His gross sales or receipts for the past twelve (12) months, other than those that
are exempt under Section 109 (A) to (U), have exceeded One Million Five Hundred
Thousand Pesos (P1,500,000.00): or
b. There are reasonable grounds to believe that his gross sales or receipts for the
next twelve (12) months, other than those that are exempt under Section 109 (A) to
(U), will exceed One Million Five Hundred Thousand Pesos (P1,500,000.00).
When is a new VAT taxpayer required to apply for registration and pay the
registration fee?
New VAT taxpayers shall apply for registration as VAT Taxpayers and pay the
corresponding registration fee of five hundred pesos (P500.00) using BIR Form No. 0605
for every separate or distinct establishment or place of business before the start of their
business following existing issuances on registration.
Thereafter, taxpayers are required to pay the annual registration fee of five hundred
pesos (P500.00) not later than January 31, every year.
What compliance activities should a VAT taxpayer, after registration as such, do
promptly or periodically?
The following compliance activities must be performed by a VAT-registered taxpayer:
a. Pay the annual registration fee of P500.00 for every place of business or
establishment that generates sales;
b. Register the books of accounts of the business/occupation/calling, including
practice of profession, before using the same;
c. Register the sales invoices and official receipts as VAT-invoices or VAT official
receipts for use on transactions subject to VAT. (If there are other transaction not
subject to VAT, a separate set of non-VAT invoices or non-VAT official receipts need
to be registered for use on transactions not subject to VAT);
d. Filing of the Monthly Value-added Tax Declaration on or before the 20th day
following the end of the taxable month (for manual filers)/on or before the
prescribed due dates enunciated in RR No. 16-2005 (for e-filers) using BIR Form No.
2550M and of the Quarterly VAT Return on or before the 25th day following the end
of the taxable quarter using BIR Form No. 2550Q, reflecting therein gross receipts
(for seller of service)/ gross sales (for seller of goods) and output tax (VAT on sales);
purchases of goods and services made in the course of trade or business/exercise
of profession and input tax (VAT on purchases), other allowable tax credits as in the
case of advance VAT payment and VAT withheld by government payors, and VAT
payable or excess input VAT, whichever is applicable, with the accredited agent
banks (AABs) of the BIR or Revenue Collection Officers (RCOs) of the BIR (in areas
without AAB), for returns with payment, or with the RDO/LTDO having jurisdiction
over the taxpayer (home RDO/LTDO), for returns without payment. (The monthly
VAT Declaration and the Quarterly VAT Return shall reflect the consolidated total for
all the taxable lines of activity and all the establishments - head office and
branches);
e. Submit with the RDO/LTDO having jurisdiction over the taxpayer, on or before the
deadline set in the filing of the Quarterly VAT Return, the soft copy of the Quarterly
Schedule of Monthly Sales and Output Tax (if the quarterly sales exceed
P2,500,000.00), and the soft copy of the Quarterly Schedule of Monthly Domestic
Purchases and Input Tax/ the soft copy of the Schedule of Transactional/Individual
Importation ( if the quarterly total purchases exceed P1,000,000.00), reflecting
therein the required data prescribed under existing revenue issuances.
How do we determine the main or principal business of a taxpayer who is engaged
in mixed business activities?
In determining the main or principal business of a taxpayer, we apply the predominance
test. Under this test, if more than fifty (50%) of its gross sales and/or gross receipts
comes from its business/es subject to VAT, its main/principal business falls within the
VAT system making its status as a VAT person. Otherwise, he can not be considered as a
VAT person eligible for the election provided for under Section 109(2) of the Tax Code.
What is the liability of a taxpayer becoming liable to VAT and did not register as
such?
Any person who becomes liable to VAT and fails to register as such shall be liable to pay
the output tax as if he is a VAT-registered person, but without the benefit of input tax
credits for the period in which he was not properly registered.
Who may opt to register as VAT and what will be his liability?
1. Any person who is VAT-exempt under Sec. 4.109-1 (B) (1) (V) not required to register
for VAT may, in relation to Sec. 4.109-2, elect to be VAT-registered by registering with
the RDO that has jurisdiction over the head office of that person, and pay the annual
registration fee of P500.00 for every separate and distinct establishment.
2. Any person who is VAT-registered but enters into transactions which are exempt from
VAT (mixed transactions) may opt that the VAT apply to his transactions which would
have been exempt under Section 109(1) of the Tax Code, as amended [Sec. 109(2)].
3. Franchise grantees of radio and/or television broadcasting whose annual gross
receipts of the preceding year do not exceed ten million pesos (P10,000,000.00) derived
from the business covered by the law granting the franchise may opt for VAT
registration. This option, once exercised, shall be irrevocable. (Sec. 119, Tax Code).
4. Any person who elects to register under optional registration shall not be allowed to
cancel his registration for the next three (3) years.
The above-stated taxpayers may apply for VAT registration not later than ten (10) days
before the beginning of the calendar quarter and shall pay the registration fee unless
they have already paid at the beginning of the year. In any case, the Commissioner of
Internal Revenue may, for administrative reason deny any application for registration.
Once registered as a VAT person, the taxpayer shall be liable to output tax and be
entitled to input tax credit beginning on the first day of the month following registration.
What are the instances when a VAT-registered person may cancel his VAT
registration?
1. If he makes a written application and can demonstrate to the commissioner's
satisfaction that his gross sales or receipts for the following twelve (12) months, other
than those that are exempt under Section 109 (A) to (U), will not exceed one million five
hundred thousand pesos (P1,500,000.00); or
2. If he has ceased to carry on his trade or business, and does not expect to
recommence any trade or business within the next twelve (12) months.
When will the cancellation for registration be effective?
The cancellation for registration will be effective from the first day of the following
month the cancellation was approved.
What is the invoicing/ receipt requirement of a VAT-registered person?
A VAT registered person shall issue :
1. A VAT invoice for every sale, barter or exchange of goods or properties; and
2. A VAT official receipt for every lease of goods or properties and for every sale,
barter or exchange of services.
May a VAT-registered person issue a single invoice/ receipt involving VAT and NonVAT transactions?
Yes. He may issue a single invoice/ receipt involving VAT and non-VAT transactions
provided that the invoice or receipt shall clearly indicate the break-down 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.
May a VAT- registered person issue separate invoices/ receipts involving VAT and
Non-VAT transactions?
Yes. 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
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 zero percent (0%) VAT, the term
"ZERO-RATED SALE" shall be written or printed prominently on the invoice or receipt.
How is the Value-Added Tax presented in the receipt/ invoice?
The amount of the tax shall be shown as a separate item in the invoice or receipt.
Sample:
Sales Price
VAT
Invoice Amount
P 100,000.00
12,000.00
112,000.00
What is the information that must be contained in the VAT invoice or VAT official
receipt?
1. Name of Seller
2. Business Style of the Seller
3. Business Address of the Seller
4. Statement that the seller is a VAT-registered person, followed by his TIN
5. Name of Buyer
6. Business Style of Buyer
7. Address of Buyer
8. TIN of buyer, if VAT- registered and amount exceed P1,000.00
9. Date of transaction
10. Quantity
11. Unit cost
12. Description of the goods or properties or nature of the service
13. Purchase price plus the VAT, provided that:
If the sale is exempt from VAT, the term "VAT-EXEMPT SALE" shall be
written or printed prominently on the invoice or receipt;
If the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED
SALE" shall be written or printed prominently on the invoice receipt; and
14. Authority to Print Receipt Number at the lower left corner of the invoice or receipt.
What is the liability of a taxpayer not registered as VAT and issues a VAT invoice/
receipt?
The non-VAT registered person shall, in addition to paying the percentage tax applicable
to his transactions, be liable to VAT imposed in Section 106 or 108 of the Tax Code
without the benefit of any input tax credit plus 50% surcharge on the VAT payable
(output tax). If the invoice/ receipts contain the required information, purchaser shall be
allowed to recognize an input tax credit.
What is the liability of a VAT-registered person in the issuance of a VAT invoice/
receipt for VAT-exempt transactions?
If a VAT-registered person issues a VAT invoice or VAT official receipt for a VAT-exempt
transaction but fails to display prominently on the invoice or receipt the words "VATEXEMPT SALE", the transaction shall become taxable and the issuer shall be liable to
pay the VAT thereon. The purchaser shall be entitled to claim an input tax credit on his
purchase.
What is "output tax"?
Output tax means the VAT due on the sale, lease or exchange of taxable goods or
properties or services by any person registered or required to register under Section
236 of the Tax Code.
What is "input tax"?
Input tax means the VAT due on or paid by a VAT-registered on importation of goods or
local purchase of goods, properties or services, including lease or use of property in the
course of his trade or business. It shall also include the transitional input tax determined
in accordance with Section 111 of the Tax Code, presumptive input tax and deferred
input tax from previous period.
What comprises "goods or properties"?
The term "goods or properties" shall mean all tangible and intangible objects, which are
capable of pecuniary estimation and shall include, among others:
a. Real properties held primarily for sale to customers or held for lease in the
ordinary
course
of
trade
or
business;
b. The right or the privilege to use patent, copyright, design or model, plan, secret
formula or process, goodwill, trademark, trade brand or other like property or right;
c. The right or privilege to use in the Philippines of any industrial, commercial or
scientific
equipment;
d. The right or the privilege to use motion picture films, films, tapes and discs; and
e. Radio, television, satellite transmission and cable television time.
What comprises "sale or exchange of services"?
The term "sale or exchange of services" means the performance of all kinds of services
in the Philippines for others for a fee, remuneration or consideration, whether in kind or
in cash, including those performed or rendered by the following:
a. Construction and service contractors;
b. Stock, real estate, commercial, customs and immigration brokers;
c. Lessors of property, whether personal or real;
d. Persons engaged in warehousing services;
e. Lessors or distributors of cinematographic films;
f. Persons engaged in milling, processing, manufacturing or repacking goods for
others;
g. Proprietors, operators or keepers of hotels, motels, rest houses, pension houses,
inns, resorts, theatres, and movie houses;
h. Proprietors or operators of restaurants, refreshment parlors, cafes, and other
eating places, including clubs and caterers;
i. Dealers in securities;
j. Lending investors;
k. Transportation contractors on their transport of goods or cargoes, including
persons who transport goods or cargoes for hire and other domestic common
carriers by land relative to their transport of goods or cargoes;
l. Common carriers by air and sea relative to their transport of passengers, goods
or cargoes from one place in the Philippines to another place in the Philippines;
m. Sales of electricity by generation, transmission, and/or distribution companies;
n. Franchise grantees of electric utilities, telephone and telegraph, radio and/or
television broadcasting and all other franchise grantees, except franchise grantees
of radio and/or television broadcasting whose annual gross receipts of the
preceding year do not exceed Ten Million Pesos (P10,000,000.00), and franchise
grantees of gas and water utilities;
o. Non-life insurance companies (except their crop insurances), including surety,
fidelity, indemnity and bonding companies; and
p. Similar services regardless of whether or not the performance thereof calls for
the exercise of use of the physical or mental faculties.
The phrase "sale or exchange of services" shall likewise include:
a. The lease of 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;
b. The lease or the use of, or the right to use of any industrial, commercial or
scientific equipment;
c. The supply of scientific, technical, industrial or commercial knowledge or
information;
d. 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
or any such knowledge or information;
e. The supply of services by a nonresident 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 non-resident person;
f. 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;
g. The lease of motion picture films, films, tapes and discs; and
h. The lease or the use of or the right to use radio, television, satellite transmission
and cable television time.
The sale of raw materials or packaging materials to an exportoriented enterprise whose export sales exceed seventy percent
(70%) of total annual production;
c. Consignment of goods if actual sale is not made within sixty (60) days following
the date such goods were consigned. Consigned goods returned by the consignee
within the 60-day period are not deemed sold;
d. 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. The following circumstances shall, among others, give rise to
transactions "deemed sale";
lessor during the year; Provided, that not later than January 31, 2009 and every three
(3) years thereafter, the amount of P10,000.00 shall be adjusted to its present value
using the Consumer Price Index, as published by the NSO;
r. Sale, importation, printing or publication of books and any newspaper, magazine,
review or bulletin which appears at regular intervals with 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 from 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 acquisition counted from the date of the vessel's original commissioning, as
follows: (a) for passenger and/or cargo vessel, the age limit is fifteen (15) years old, (b)
for tankers, the age limit is ten (10) year old, and (c) for high-speed passengers crafts,
the age limit is five (5) years old; Provided, finally, that exemption shall be subject to
the provisions of Section 4 of Republic Act No. 9295, otherwise known as "The Domestic
Shipping Development Act of 2004";
t. Importation of life-saving equipment, safety and rescue equipment and
communication and navigational safety equipment, steel plates and other metal plates
including marine-grade aluminum plates, used for shipping transport operations;
Provided, that the exemption shall be subject to the provisions of Section 4 of Republic
Act No. 9295, otherwise known as "The Domestic Shipping Development Act of 2004".
u. Importation of capital equipment, machinery, spare parts, life-saving and
navigational equipment, steel plates and other metal plates including marine-grade
aluminum plates to be used in the construction, repair, renovation or alteration of any
merchant marine vessel operated or to be operated in the domestic trade. Provided,
that the exemption shall be subject to the provisions of Section 19 of Republic Act No.
9295, otherwise known as the "The Domestic Shipping Development Act of 2004".
v. Importation of fuel, goods and supplies engaged in international shipping or air
transport operations; Provided, that the said fuel, goods and supplies shall be used
exclusively or shall pertain to the transport of goods and/or passenger from a port in the
Philippines directly to a foreign port, or vice-versa, without docking or stopping at any
other port in the Philippines unless the docking or stopping at any other Philippine port
is for the purpose of unloading passengers and/or cargoes that originated form abroad,
or to load passengers and/or cargoes bound for abroad; Provided, further, that if any
portion of such fuel, goods or supplies is used for purposes other that the mentioned in
the paragraph, such portion of fuel, goods and supplies shall be subject to 12% VAT;
w. Services of banks, non-bank financial intermediaries performing quasi-banking
functions, and other non-bank financial intermediaries, such as money changers and
pawnshops, subject to percentage tax under Sections 121 and 122, respectively of the
Tax Code; and
x. Sale or lease of goods or properties or the performance of services other than the
transactions mentioned in the preceding paragraphs, the gross annual sales and/or
receipts do not exceed the amount of One Million Five Hundred Thousand Pesos
(P1,500,000.00). Provided, that not later than January 31, 2009 and every three (3)
years thereafter, the amount of P1,500,000.00 shall be adjusted to its present value
after using the Consumer Price Index, as published by the NSO.
What are the previously exempt transactions that are now subject to VAT?
Legal services;
Petroleum products;
An aggregate amount to be imposed for all such failures during a taxable year
shall not exceed Twenty-Five Thousand Pesos (P25,000.00).
The five percent (5%) final VAT withholding rate shall represent the net VAT payable of
the seller. The remaining seven percent (7%) effectively accounts for the standard input
VAT for sales of goods or services to government or any of its political subdivisions,
instrumentalities or agencies including GOCCs in lieu of the actual input VAT directly
attributable or ratably apportioned to such sales. Should actual input VAT attributable to
sales to government exceeds seven percent (7%) of gross payments, the excess may
form part of the sellers' expense or cost. On the other hand, if actual input VAT
attributable to sale to government is less than seven percent (7%) of gross payment,
the difference must be closed to expense or cost.