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TRANSACTION EXEMPT FROM:

(a) Sale or Importation of:


-agricultural & marine food products in their
original state
-livestock & poultry yielded for human
consumption
Calves, Bulls, Pig, Goat, Sheep, Rabbit, Cows

(b) Sale or Importation of:


-fertilizers, seeds, seedlings, fingerlings
-fish, prawn, poultry & livestock feeds
(including sale/import of
ingredients used to manufacture feeds)

EXCEPT: Specialty feeds for race horses, fighting


cocks, aquarium fish,
pets, zoo animals

(c) Importation of Personal & Household


Effects
(see VAT on IMPORTATION discussion)

(d) Importation of Professional Instruments &


Impliments
(see VAT on IMPORTATION discussion)

(e) Services Subject to PERCENTAGE TAX (see next


discussion)

(f) Services by agricultural contract growers


and
milling for others of PALAY INTO RICE, CORN INTO
GRITS,
SUGAR CANE INTO RAW SUGAR
(g) Medical, Dental & Veterinary Services,
except those rendered by PROFESSIONALS & Sale of
Pharmacies in Hospital

(h) Educational Services rendered by:


- Private Educational Institutions, Duly
Accredited by DEPED,
CHED & TESDA
- Gov’t Educational Institutions

(i) Services rendered by individual pursuant


to an
EMPLOYEE – EMPLOYER RELATIONSHIP
(j) Services rendered by Regional/Area
Headquarters (RHQ) established in the
Philippines by multinational corporations:
- ACT ONLY AS SUPERVISORY, COMMUNICATIONS AND
COORDINATING CENTER FOR THEIR SUBSIDIARY/AFFILIATE
- DO NOT EARN INCOME FROM THE PHIL.
(k) Transactions which are exempt
- under International Agreement to w/c the
Phil. is a
signatory
- under Special Laws except those granted
under
PD No. 529

(l) Sales by Agricultural Cooperatives DULY


to their
REGISTERED AND IN GOOD STANDING W/ CDA
MEMBERS as well as
- sale of their produce, whether in its ORIGINAL
STATE/PROCESSED
FORM, to NON-MEMBERS
- importation of DIRECT FARM INPUTS (see VAT on
IMPORTATION discussion)

NOTE: Sale by Agricultural Cooperatives to NON-MEMBERS


can only be
Exempted from VAT if the producer of the
products sold is the
cooperative itself. If the cooperative is NOT
the PRODUCER, then
only those sales to its members shall be
EXEMPTED from VAT.
It is to be reiterated, however, that sale or
importation of
agricultural FOOD products in their ORIGINAL
STATE is EXEMPT
FROM VAT irrespective of the buyer/seller
thereof.

(m) Gross Receipts from Lending Activities by


Credit/ Multi-purpose Cooperatives DULY
REGISTERED AND IN GOOD STANDING W/ CDA
(n) Sales by Non-Agricultural, Non-Electric &
Non-Credit Cooperatives DULY REGISTERED AND IN
GOOD STANDING W/ CDA

PROVIDED, that the SHARE CAPITAL CONTRIBUTION does NOT


EXCEED
P15,000 and regardless of the aggregate
capital & net
surplus ratably distributed among the
members.
(o) Export Sales by persons who are NOT VAT-
REGISTERED
(p) The following Sales of Real Properties are
EXEMPT from VAT, namely:
NIRC of 1997
TRAIN LAW
(1) Sale of Real Property NOT PRIMARILY HELD
FOR SALE to
customers or HELD FOR LEASE/FOR USE in the
ordinary course of business.
RESIDENTIAL LOTS:
P 1,919,500
P 1,500,00
RESIDENTIAL DWELLINGS (House & Lot):
P 3,199,200
P 2,500,00
*effective January 1, 2021,

Sale of residential dwellings,

THRESHOLD = P2,000,000
(2) Sale of Real Property utilized for
SOCIALIZED HOUSING
i) House & Lot Package ----- not
exceeding P450,000
ii) Residential Lots Only ------ not
exceeding P180,000

(q) Lease of Residential Units (e.g. Condo


Units)
NIRC of 1997
TRAIN LAW
Not exceeding
Not exceeding
P 12,800/month P
15,000/month
*P12,800 used to be P10,000
* ASSOCIATION DUES, MEMBERSHIP FEES, etc. are already VAT-
EXEMPT
*NOTE that THRESHOLD is based on MONTHLY RENTAL, regardless
of the
Amount of aggregate rentals received by the lessor during
the year

(r) Sale or Importation, Publication or


Printing of Books (should be printed),
Newspapers, etc.
(see VAT on IMPORTATION discussion)

(s) Sale, Importation or Lease of Passenger ot


Cargo Vessel and Aircrafts (including ENGINE,
EQUIPMENT & SPAPEPARTS) for Domestic or
International Transport Operations
(see VAT on IMPORTATION discussion)

(t) Importation of LIFE-SAVING EQUIPMENT etc.


(see VAT on IMPORTATION discussion)

(u) Importation of fuels, goods & supplies by


persons engaged in INTERNATIONAL SHIPPING/
AIR TRANSPORT OPERATIONS

NOTE: These shall be USED FOR INTERNATIONAL SHIPPING/


AIR
TRANSPORT OPERATIONS

(v) Services of bank, non-bank financial


intermediaries performing quasi-banking
operations, and other non-bank financial
intermediaries

(w) Sale or Lease of goods and services by:


NIRC of 1997
TRAIN LAW
SENIOR CITIZENS PWDs &
SENIOR CITIZENS

NOTE: Not all Purchases are Vat Exempted

(x) Transport of PASSENGERS by INTERNATIONAL


CARRIER
(y) Sale of GOLD to BSP
(TRAIN LAW) *Used to be ZERO-EXEMPTED SALE
(z) Sale of DRUGS & MEDICINES prescribed for
DIABETES, CHOLESTEROL & HYPRETENSION
(TRAIN LAW) *Effective JANUARY 1, 2019

(aa)