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Value-Added Tax Description

Value-Added Tax (VAT) 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.

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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 Three Million Pesos (Php3,000,000.00)
 A person required to register as VAT taxpayer but failed to register
 Any person, whether or not made in the course of his trade or business, who imports goods

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Monthly VAT Declarations

BIR Form 2550M - Monthly Value-Added Tax Declaration (February 2007 ENCS)

Documentary Requirements

1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No. 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. Authorization letter, if return is filed by authorized representative.

Procedures

1. Fill-up BIR Form No. 2550M in triplicate copies (two copies for the BIR and one copy for the
taxpayer).
2. If there is payment:
o File the Monthly VAT declaration, together with the required attachments, and pay the VAT
due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue
District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head
office of the business establishment) is registered.
o 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 the return
as proof of filing the return and payment of the tax.
o In places where there are no AAB, file the Monthly VAT declaration, together with the
required attachments and pay the VAT due with the Revenue Collection Officer (RCO)
o The RCO shall issue a Revenue Official Receipt upon payment of the tax.
3. If there is no payment:
o File the Monthly VAT Declaration, together with the required attachments, with the
RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent having jurisdiction
over the registered address of the taxpayer (head office of the business establishment).

Deadline

 Manual Filing - Not later than the 20th day following the end of each month
 Through Electronic Filing and Payment System (eFPS):

Business Industry Period for filing Monthly


VAT Declarations
Group A
Insurance and Pension 25 days following the end of
Funding the month
Activities Auxiliary to Financial Intermediation
Construction
Water Transport
Hotels and Restaurants
Land Transport

Group B
Manufacture and Repair of Furniture 24 days following the end of
Manufacture of Basic Metals the month
Manufacture of Chemicals and Chemical Products
Manufacture of Coke, Refined Petroleum & Fuel
Products
Manufacture of Electrical Machinery & Apparatus
N.E.C.
Manufacture of Fabricated Metal Products
Manufacture of Food, Products & Beverages
Manufacture of Machinery & Equipment NEC
Manufacture of Medical, Precision, Optical Instruments
Manufacture of Motor Vehicles, Trailer & Semi-Trailers
Manufacture of Office, Accounting & Computing
Machinery
Manufacture of Other Non-Metallic Mineral Products
Manufacture of Other Transport Equipment
Manufacture of Other Wearing Apparel
Manufacture of Paper and Paper Products
Manufacture of Radio, TV & Communication
Equipment/ Apparatus
Manufacture of Rubber & Plastic Products
Manufacture of Textiles
Manufacture of Tobacco Products
Manufacture of Wood & Wood Products
Manufacturing N.E.C.
Metallic Ore Mining
Non-Metallic Mining & Quarrying

Group C
Retail Sale 23 days following the end of
Wholesale Trade and Commission Trade the month
Sale, Maintenance, Repair of Motor Vehicle, Sale of
Automotive Fuel
Collection, Purification and Distribution of Water
Computer and Related Activities
Real Estate Activities

Group D
Air Transport 22 days following the end of
Electricity, Gas, Steam & Hot Water Supply the month
Postal & Telecommunications
Publishing, Printing & Reproduction of Recorded Media
Recreational, Cultural & Sporting Activities
Recycling
Renting of Goods & Equipment
Supporting & Auxiliary Transport Services

Group E
Activities of Membership Organizations, Inc. 21 days following the end of
Health and Social Work the month
Public Admin & Defense Compulsory Social Security
Research and Development
Agricultural, Hunting, and Forestry
Farming of Animals
Fishing
Other Service Activities
Miscellaneous Business Activities
Unclassified

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Quarterly Value-Added Tax Return

BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)

Documentary Requirements

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
Fill-up BIR Form 2550Q in triplicate copies (two copies for the BIR and one copy for the taxpayer)

1. If there is payment:
o File the Monthly VAT declaration, together with the required attachments, and pay the VAT
due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue
District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head
office of the business establishment) is registered.
o 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 the return
as proof of filing the return and payment of the tax.
o In places where there are no AAB, file the Monthly VAT declaration, together with the
required attachments and pay the VAT due with the Revenue Collection Officer (RCO)
o The RCO shall issue a Revenue Official Receipt upon payment of the tax.
2. If there is no payment:
o File the Quarterly VAT Return, together with the required attachments with the
RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent having jurisdiction over
the registered address of the taxpayer (head office of the business establishment).

Reminders:

 Only one consolidated Monthly VAT Declaration/Quarterly VAT Return shall be filed covering the
results of operation of the head office as well as the branches for all lines of business subject to
VAT.
 The Quarterly Summary Lists of Sales and Purchases shall be submitted in Compact Disk-
Recordable (CDR) following the format provided under Section 4.114-3(g) of RR No. 16-2005, as
amended by RR No. 1-2012.
 The Quarterly Summary Lists of Sales and Purchases shall be submitted through electronic filing
facility for taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and those enrolled
under the eFPS.

Deadline

Within twenty five (25) days following the close of the taxable quarter.

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Value-Added 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.
 On export sales and other zero-rated sales - 0%

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Related Revenue Issuances

REVENUE REGULATIONS (RRs)


Issuance No. Subject Matter Date of Issue
RR No. 15-2018 Amends RR No. 8-2018 particularly on the due date for April 5, 2018
the updating of registration from VAT to Non-
VAT (Published in Manila Bulletin on April 7,
2018) Digest| Full Text
RR No. 13-2018 Prescribes the Regulations implementing the Value-Added March 15, 2018
Tax (VAT) provisions under RA No. 10963 (TRAIN Law),
which further amends RR No. 16-2005 (Consolidated VAT
Regulations of 2005), as amended (Published in Manila
Bulletin on March 19, 2018) Digest| Full Text
RR No. 8-2018 Implements the amended provisions on Income Tax February 20,
pursuant to RA No. 10963 (TRAIN Law) 2018
(Published in Manila Bulletin on February 22,
2018) Digest|Full Text
RR No. 1-2017 Prescribes the regulations governing applications for January 18,
Value-Added Tax (VAT) credit/refund filed under Section 2017
112 of the Tax Code, as amended, prior to the effectivity of
RMC No. 54-2014
(Published in Manila Bulletin on January 20, 2017)
Digest|Full Text
RR No. 5-2016 Amends Revenue Regulations No. 15-2012 by providing June 1, 2016
additional criteria in the accreditation of printers engaged
in printing services of official receipts, sales invoices and
other commercial receipts and/or invoices (Published in
Manila Bulletin on June 2, 2016) Digest|Full Text|Annex A
RR No. 15-2015 Amends Sections 4.109-1(B)(1)(s), (t) and (u) of RR No. December 28,
16-2005, as amended, relative to sale, importation or lease 2015
of passenger or cargo vessels and aircraft, including
engine, equipment and spare parts thereof for domestic or
international transport operations
(Published in Manila Bulletin on December 29, 2015)
Digest|Full Text
RR No. 8-2015 Amends RR No. 6-2015 on the definition of raw cane sugar May 27, 2015
for purposes of the imposition of advance business tax
(Value-Added Tax or Percentage Tax) and for other related
purposes
(Published in Manila Bulletin on May 28, 2015) Digest|Full
Text
RR No. 6-2015 Implements regulations imposing advance Business Tax March 31, 2015
(VAT or Percentage Tax) payments on sugar and for other
related purposes
(Published in Manila Bulletin on April 1, 2015) Digest|Full
Text
RR No. 5-2015 Amends RR No. 6-2014 and imposes penalties March 17, 2015
to taxpayers mandatorily covered by eFPS or eBIRForms
who failed to file tax returns under the electronic systems
of the BIR
(Published in Manila Bulletin on March 19,
2015) Digest|Full Text|Annex A
RR No. 4-2014 Prescribes the policies and guidelines in the monitoring of March 20, 2014
service fees of professionals
(Published in Manila Bulletin on March 21, 2014)
Digest|Full Text
RR No. 17-2013 Prescribes the guidelines on the preservation of books of September 27,
accounts and other accounting records 2013
(Published in Manila Bulletin and Philippine Daily Inquirer
on September 28, 2013)
Digest | Full text
RR No. 13-2013 Amends Section 2 (b) of Revenue Regulations No. 13-08 September 20,
relative to the definition of raw sugar for Value-Added Tax 2013
purposes
(Published in Manila Bulletin on September 24, 2013)
Digest | Full Text
RR No. 5-2013 Prescribes the tax treatment of sale of jewelry, gold and April 22, 2013
other metallic minerals to a non-resident alien individual not
engaged in trade or business within the Philippines or to a
non-resident foreign corporation
(Published in Manila Bulletin on April 24, 2013)
Digest | Full Text
RR No. 1-2013 Further expands the coverage of taxpayers required to file January 23,
tax returns and pay taxes through the Electronic Filing and 2013
Payment System to include National Government Agencies
mandatorily required to use the Electronic Tax Remittance
Advice
(Published in Manila Bulletin on January 25, 2013)
Digest | Full Text | Annex A | Annex B
RR No. 15-2012 Prescribes the regulations on the accreditation of printers December 5,
as a prerequisite to the printing services of official receipts, 2012
sales invoices and other commercial receipts and/or
invoices
(Published in Manila Bulletin on December 7, 2012)
Digest | Full Text | Annex A
RR No. 13-2012 Prescribes the VAT treatment on sale of adjacent October 12,
residential lots, house and lots or other residential 2012
dwellings, thereby amending certain provisions of RR No.
16-2005, as amended
(Published in Manila Bulletin on October 17, 2012)
Digest | Full Text
RR No. 6-2012 Clarifies the taxation on the sale of gold and other metallic April 2, 2012
minerals to Bangko Sentral ng Pilipinas and other persons
or entities
(Published in Manila Bulletin on April 4, 2012)
Digest | Full Text
RR No. 3-2012 Prescribes the effectivity of threshold amounts for sale of February 20,
residential lot, sale of house and lot, lease of residential unit 2012
and sale or lease of goods or properties or performance of
services covered by Section 109 (P), (Q) and (V) of the Tax
Code of 1997, as amended
(Published in Manila Bulletin on February 22, 2012)
Digest | Full Text
RR No. 1-2012 Requires the mandatory submission of Quarterly Summary February 20,
List of Sales and Purchases by all VAT registered 2012
taxpayers
(Published in Manila Bulletin on February 22, 2012)
Digest | Full Text
RR No. 18-2011 Provides the penalties for violation of the requirement that November 21,
Output Tax on the sale of goods and services should be 2011
separately indicated in the sales invoice or official receipt
(Published in Manila Bulletin on November 23, 2011)
Digest | Full Text
RR No. 16-2011 Increases the amount of threshold amounts for sale of October 28,
residential lot, sale of house and lot, lease of residential unit 2011
and sale or lease of goods or properties or performance of
services covered by Section 109 (P), (Q) and (V) of the Tax
Code of 1997, as amended, thereby amending certain
provisions of RR No. 16-2005, as amended, otherwise
known as the “Consolidated VAT Regulations of 2005”
(Published in Manila Bulletin on November 2, 2011)
Digest | Full Text
RR No. 10-2011 Amends certain provision of RR No. 16-2005, as amended July 7, 2011
by RR No. 4-2007, otherwise known as the "Consolidated
Value-Added Tax Regulations of 2005", as amended
(Published in Manila Bulletin on July 9, 2011)
Digest | Full Text
RR No. 9-2011 Amends RR No. 3-2011 relative to the policies, guidelines June 29, 2011
and procedures on the application for change in accounting
period
(Published in Manila Bulletin on July 1, 2011)
Digest | Full Text
RR No. 3-2011 Provides the policies, guidelines and procedures on the March 7, 2011
application for change in accounting period
(Published in Manila Bulletin on March 9, 2011)
Digest | Full Text | Annex A | Annex B | Annex C |Annex
D | Annex E | Annex F
RR No. 9-2009 Promulgates the requirements for the maintenance, December 29,
retention and submission of electronic records 2009
(published in Manila Bulletin on December 31, 2009)
Digest | Full Text
RR No. 13-2008 Consolidated Regulations on Advance Value-Added Tax September 9,
on the Sale of Refined Sugar; Amending and/or Revoking 2008
All Revenue Issuances Issued to this Effect, and for
Other Related Purposed
(published in Philippine Star on October 7,
2008)Digest | Full Text | Annex A-B, E-J | Annex
C | Annex D
RR No. 13-2007 Prescribing the Rules on the Advance Payment of Value- December 5,
Added Tax/Percentage Tax on the Transport of Naturally 2007
Grown Planted Timber Products (published in Philippine
Daily Inquirer on December 7, 2007)
Digest | Full Text | Annex A
RR No. 11-2007 Suspension of the Implementation of Revenue Regulations August 28,
No. 6-2007 2007
(published in Manila Bulletin on August 29,
2007) Digest | Full Text
RR No. 6-2007 Consolidated Regulations on Advance Value-Added Tax May 9, 2007
on the Sale of Refined Sugar, Amending and/or Revoking
all Revenue Issuances Issued to this Effect, and for Other
Related Purposes
(published in Manila Bulletin on May 11,
2007) Digest | Full Text | Annex A-E | Annex F-J
RR No. 4-2007 Amending Certain Provisions of RR No. 16-2005, As March 20,
Amended, Otherwise Known as the Consolidated Value- 2007
Added Tax Regulations of 2005
(published in Manila Bulletin on March 22,
2007) Digest | Full Text
RR No. 2-2007 Amending Certain Provisions of RR No. 16-2005, As January 11,
Amended, Otherwise Known as the Consolidated Value- 2007
Added Tax Regulations of 2005
(published in Manila Bulletin on January 12,
2007) Digest | Full Text
RR No. 16-2005 Consolidated Value-Added Tax Regulations of 2005 October 19,
(published in Manila Times on October 21, 2005) 2005
Digest | Full Text
RR No. 7-2004 Implementing Sec. 109(bb) and (cc) of the National Internal May 21, 2004
Revenue Code, as Amended by RA 9238, Excluding
Services Rendered by Doctors of Medicine Duly Registered
with the Professional Regulatory Commission (PRC), and
Services Rendered by Lawyers Duly Registered with the
Integrated Bar of the Philippines (IBP) from the Coverage
of Value-Added Tax
(published in Philippine Star on May 28,
2004) Digest | Full Text
RR No. 4-2004 Supplementing the Rules on the Advance Payment of March 26,
Value-Added Tax on Sale of Refined Sugar as Provided for 2004
in RR 2-2004
(published in Taliba on March 31, 2004) Digest | Full Text
RR No. 2-2004 Further Enhancing the Rules on the Advance Payment of February 26,
Value-Added Tax on Sale of Refined Sugar, Amending RR 2004
7-89 and 29-2002
(published in Manila Standard on February 28,
2004) Digest | Full Text
RR No. 29-2003 Advance Payment of VAT on the Sale of Flour December 1,
(published in Manila Times on December 2, 2003) 2003
Digest | Full Text
RR No. 28-2003 Amending Further Pertinent Provisions of RR 2-98 as November 20,
Amended, Relative to the Issuance of Certificate of Value- 2003
Added Tax Withheld at Source, Thereby Amending RR 4-
2002; and for the Purpose
(published in Manila Times on November 25,
2003) Digest | Full Text
RR No. 27-2003 Regulations Further Amending the Transitory Provisions of October 9,
RR 18-99 as Amended by RR 12-2003, Pertaining to the 2003
Deadline for the Usage of Properly Stamped Unused Non-
VAT Invoices or Receipts
(published in Manila Times on October 10,
2003) Digest | Full Text
RR No. 5-2003 Rules and Regulations To Implement The Remittance of February 4,
the Following: (a) 70% Share of the ARMM in the 2003
Withholding Tax Payments of National Government
Agencies (NGAs) and in the National Collections from
Taxpayers Other Than NGAs Provided for Under Section
9, Article IX of RA 9054, Amending Therein Certain
Sections of RR 4-98; (b)Allotment to the Regional
Government (RG) of the 30% Share of the National
Government (NG) of all Current Year Collections of
Internal Revenue Taxes Within ARMM for a Period of Five
(5) Years as may be Provided in the Annual
Appropriations Act as Provided for Under Section 15,
Article IX of RA 9054; and c) 50% of the 80% Share of the
NG from the Yearly Incremental Revenue From VAT
Collections Within ARMM Received by the Central
Government as Provided for Under Section 15, in Relation
to Section 9, both of Article IX of RA 9054 As Well As in
Relation to Section 283 of the National Internal Revenue
Code (NIRC) of 1997
Digest | Full Text
RR No. 29-2002 Enhancing the Rules on the Advance Payment of Value- December 20,
Added Tax on the Sale of Refined Sugar, thereby 2002
Amending RR 7-89, and Other Purposes
(published in Philippine Star on December 22,
2002) Digest | Full Text
RR No.26-2002 Amends further RR No. 9-2001, as amended, by providing December 19,
for the staggered filing of returns of taxpayers enrolled in 2002
the Electronic Filing and Payment System based on
industry classification
(published in Manila Bulletin on Dec. 20, 2002)
Digest|Full Text
RR No. 8-2002 Amending Further Pertinent Provisions of RR 7-95, as June 24,
Amended, With Respect to the Time of Filing of Quarterly 2002
VAT Returns; Contents and Submission of Quarterly Total
of Monthly Sales and Purchases Per Supplier or Customer,
and Providing for the Penalties and Effect of Non-
Submission Thereof; and Clarifying Further the Mode of
Remittance of VAT Due from Non-Residents
(published in Philippine Daily Inquirer on June 27,
2002) Digest | Full Text | Attachment 2550
(front) | Attachment 2550 (back)
RR No. 2-98 Implementing Republic Act No. 8424, "An Act Amending May 17, 1998
the National Internal Revenue Code (NIRC) as Amended"
relative to the Withholding on Income Subject to the
Expanded Withholding Tax and Final Withholding Tax,
Withholding of Income Tax on Compensation, Withholding
of Creditable VAT and other Percentage Taxes
Digest
REVENUE MEMORANDUM ORDERS (RMOs)
Issuance No. Subject Matter Date of Issue
RMO No. 20- Prescribes the revised policies and procedures on the May 3, 2018
2018 processing of Tax Credit Certificates (TCCs) for cash
conversion
Full Text
RMO No. 16- Amends certain provisions of RMO No. 5-2004 particularly July 21, 2017
2017 on the application, processing and issuance of ATRIG on
importation of wheat by millers and traders relative to the
advance payment of Value-Added Tax on the sale of flour
Digest|Full Text
RMO No. 16- Amends RMO No. 19-2012 re: Value-Added Tax Audit August 14, 2015
2015 Program of the Large Taxpayers Service
Digest|Full Text|Annex A

RMO No. 16- Reiterates and prescribes certain policies relative to the April 3,
2014 VAT Audit Program 2014
Digest|Full Text
RMO No. 27- Amends the 2012 Value-Added Tax (VAT) Audit Program October 11,
2013 Digest | Full Text 2013
RMO No. 5- Prescribes the procedures and guidelines on the March 21, 2013
2013 redemption of Notice of Payment Schedule relative to the
implementation of the VAT TCC Monetization Program
Digest | Full Text
RMO No. 21- Prescribes the policies, guidelines and procedures in the September 10,
2012 acceptance, processing, evaluation, approval of 2012
applications for monetization and issuance of Notice of
Payment Schedule of outstanding VAT Tax Credit
Certificates solely issued by the BIR and jointly issued by
the One-Stop-Shop Inter-Agency Tax Credit and Duty
Drawback Center of the Department of Finance and the
BIR
Digest | Full Text | Annex A-J | Annex K | Annex L |Annex
M
RMO No. 20- Prescribes the policies and procedures for the September 5,
2012 implementation of the 2012 Value-Added Tax Audit 2012
Program
Digest | Full Text | Annex A | Annex B | Annex C |Annex
D | Annex E
RMO No. 19- Prescribes the policies and procedures in the Value-Added August 31, 2012
2012 Tax Audit Program for Large Taxpayers Service
Digest | Full Text | Annex A | Annex B | Annex B-1 |Annex
C | Annex C-1
RMO No. 12- Enjoins the strict implementation of the penalty provisions April 30, 2009
2009 for non-submission of Quarterly Summary Lists of Sales
and Purchases
Digest | Full Text
RMO No. 3- Amendment and Consolidation of the Guidelines in the January 23,
2009 Conduct of Surveillance and Stock-Taking Activities, and 2009
the Implementation of the Administrative Sanction of
Suspension and Temporary Closure of Business
Digest | Full Text | Annex A | Annex B | Annex D | Annex
E | Annex F | Excel File Annexes
RMO No. 6- Prescribing the Guidelines and Procedures in the Printing, February 20,
2008 Requisition, Reporting, Issuance and Distribution of 2008
Certificate of Advance Payment of Value-Added Tax/
Percentage Tax on the Transport of Naturally Grown and
Planted Timber Products as Prescribed in RR No. 13-2007
Dated October 15, 2007
Digest | Full Text | Annex A | Annex B-F
RMO No. 16- Prescribing Additional Procedures in the Audit of Input July 23,
2007 Taxes Claimed in the VAT Returns by Revenue Officers 2007
and Amending "Annex B" of RMO No. 53-98 With Respect
to the Checklist of Documents to be Submitted by a
Taxpayer Upon Audit of his/its VAT Liabilities as well as the
Mandatory Reporting Requirements to be Prepared by the
Assigned Revenue Officer/s Relative Thereto, All of Which
Shall Form an Integral Part of the Docket
Digest | Full Text
RMO No. 7- Prescribing the guidelines and procedures in the February 28,
2006 processing of applications for zero-rating of effectively 2006
zero-rated transactions for Value-Added Tax purposes
Digest | Full Text | Annex A | Annex B-B2 | Annex C-D
RMO No. 26- Suspension of issuance of assessments for deficiency October 21,
2005 Value-Added Tax against cinema/theater 2005
operators/owners
Digest | Full Text
RMO No. 22- Value-Added Tax (VAT) Exemption Certificate/ May 24, 2004
2004 Identification Card Issued to qualified foreign embassies
and their qualified personnel Amending/ Modifying RMO
No. 81-99
Digest | Full Text
RMO No. 5- Prescribing the guidelines and procedures in the February 4,
2004 implementation of RR No. 29-2003 on the advance 2004
payment of Value-Added Tax on the sale of flour
Digest | Full Text | Annex A
RMO No. 35- Prescribing the guidelines and procedures in the December 11,
2002 processing and issuance of Authority to Release Imported 2002
Goods (ATRIG) for Excise and Value-Added Tax
Purposes
Digest | Full Text | Annex A | Annex B | Annex C | Annex
D | Flowchart
RMO No. 9- Tax treatment of sales of goods, properties and services March 29,
2000 made by VAT- registered suppliers to BOI-registered 2000
manufacturers-exporters with 100% export sales
Digest
RMO No. 81-99 Issuance of Value-Added Tax (VAT) Exemption Certificate November 5,
to all qualified embassies and their personnel 1999
Digest
RMO No. 40-94 Prescribing the Modified Procedures on the Processing of
Claims for VAT Credit/ Refund
REVENUE MEMORANDUM CIRCULARS (RMCs)
Issuance No. Subject Matter Date of Issue
RMC No. 17- Amends certain provisions of RMC Nos. 89-2017 and 54- March 8, 2018
2018 2014 on the processing of claims for issuance of Tax
Refund/Tax Credit Certificate in relation to amendments
made in the NIRC of 1997, as amended by RA No. 10963
(TRAIN Law)
Digest|Full Text|Annex A.1|Annex A.1.1| Annex A.1.2-
1.12|Annex A.2|Annex B|Annex C|Annex D|Annex E|Annex
F
RMC No. 89- Amends RMC No. 51-2007 relative to the processing of October 24,
2017 claims for issuance of tax refund/Tax Credit Certificate 2017
(TCC) and the revenue officials authorized to approve
and/or issue the tax refund/TCC
Digest|Full Text
RMC No. 23- Prescribes the new template of Value-Added Tax March 7, 2017
2017 Exemption Identification Card issued to qualified diplomats,
officials and dependents of the US Embassy
Digest|Full Text|Annex A|Annex B
RMC No. 19- Amends Question and Answer to No. 12 of RMC No. 80- March 2, 2017
2017 2010 regarding the issuance of Electronic Letters of
Authority for Value-Added Tax credit/refund claims filed by
direct exporters
Digest|Full Text
RMC No. 82- Publishes the full text of Joint Circular No. 002.2014 of the December 2,
2014 DOF, DBM, BOC and BIR, providing for the establishment 2014
of a mechanism for qualified VAT-registered persons to
receive the cash equivalent of their outstanding VAT Tax
Credit Certificates
Digest|Full Text |Joint Circular
RMC No. 55- Clarifies the livestock and poultry feeds or ingredients June 27,
2014 used in the manufacture of finished feeds to be exempt 2014
from VAT
Digest|Full Text
RMC No. 54- Clarifies the issues relative to the application for Value- June 17,
2014 Added Tax (VAT) refund/credit under Section 112 of the 2014
Tax Code, as amended
Digest|Full Text|Annex A|Annex B
RMC No. 57- Circularizes BIR Ruling No. 123-2013 re: recovery of August 29, 2013
2013 unutilized creditable input taxes attributable to VAT zero-
rated sales
Digest | Full Text
RMC No. 8- Publishes the full text of Joint Circular No. 6-2012 entitled January 25,
2013 “Joint Guidelines Implementing the Special Provision of 2013
the General Appropriations Act on Value-Added Tax
(VAT) Refunds”
Digest | Full Text | Annex A
RMC No. 5- Publishes the full text of Joint Circular No. 5-2012 entitled January 18,
2013 "Joint Guidelines Implementing the Special Provision of 2013
the General Appropriations Act on VAT Refunds on
Importation"
Digest | Full Text | Annex A
RMC No. 75- Clarifies Section 109(1)(R) of the National Internal November 23,
2012 Revenue Code of 1997, as amended, on the VAT 2012
exemption of the sale, importation, printing or publication
of books, newspapers, magazines, reviews or bulletins
Digest | Full Text
RMC No. 58- Reiterates the requirement on the submission of Quarterly September 27,
2012 Value-Added Tax (VAT) Report per city/municipality 2012
Digest | Full Text
RMC No. 51- Amends the deadline for the filing of Applications for September 3,
2012 Value-Added Tax (VAT) Tax Credit Certificates (TCCs) 2012
Monetization
Digest | Full Text
RMC No. 47- Prescribes the guidelines in the filing of application for August 22, 2012
2012 enrollment in the Value-Added Tax (VAT) Tax Credit
Certificates (TCCs) Monetization Program
Digest | Full Text | Annex A
RMC No. 21- Circularizes the full text of Executive Order No. 68 entitled May 3, 2012
2012 “Monetization Program of Outstanding Value-Added Tax
(VAT) Tax Credit Certificates (TCCs)”
Digest | Full Text
RMC No. 54- Circularizes the En Banc Resolution of the Supreme Court November 8,
2011 denying with finality the Motion for Reconsideration on G.R. 2011
No. 193007 upholding the validity of imposition of VAT on
Toll Fees
Digest | Full Text
RMC No. 49- Further clarifies RMC No. 38-2011 on Expanded October 11,
2011 Withholding Tax obligation of Philippine Health Insurance 2011
Corporation (PHIC), including the Income Tax withholding
obligation of hospitals/clinics on case rates of PHIC and
the matter of 5% Final Withholding VAT for government
money payments
Digest | Full Text
RMC No. 63- Imposes the Value-Added Tax on Tollway Operators July 20, 2010
2010 Digest | Full Text
RMC No. 60- Clarifies the coverage of RMO No. 56-2010 relative to the July 13, 2010
2010 use of updated medium for submitting the Summary List of
Sales and Purchases (SLSP)
Digest | Full Text
RMC No. 56- Disseminates the most recent policies on the audit of all June 29, 2010
2010 internal revenue tax liabilities for the year 2009
Digest | Full Text
RMC No. 39- Directs the Revenue District Offices to verify the VAT May 21, 2010
2010 Compliance of Health Maintenance Organizations
Digest | Full Text
RMC No. 30- Clarifies Revenue Memorandum Circular No. 72-2009, March 26, 2010
2010 which reiterated the imposition of the Value-Added Tax on
Tollway Operators
Digest | Full Text
RMC No. 51- Clarifies the Requirement for the Submission of Summary September 16,
2009 Lists of Sales (SLS)/Summary Lists of Purchases (SLP); 2009
the imposition of penalties for their non-submission; the
issuance of Subpoena Duces Tecum; and the imposition of
penalties for failure to obey summons
Digest | Full Text
RMC No. 77- Taxability of Director’s Fees Received By Directors Who December 3,
2008 are not Employees of the Corporation for VAT or 2008
Percentage Tax Purposes as Espoused Under Revenue
Memorandum Circular No. 34-2008
Digest | Full Text
RMC No. 46- Clarification of Issues Concerning Common Carriers by Air June 20,
2008 and Their Agents Relative to the Revenue and Receipt from 2008
Transport of Passengers, Goods/Cargoes and Mail, and
from Excess Baggage
Digest | Full Text
RMC No. 34- Tax Treatment of Director’s Fees for Income Tax and April 18,
2008 Business Tax Purposes 2008
Digest | Full Text
RMC No. 59- Clarifying the Effect of Suspension of RR No. 6-2007, September 14,
2007 Otherwise Known As the "Consolidated Regulations on 2007
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
RMC No. 53- Reiteration of the Amendment Made by RA No. 9337 August 7,
2007 Imposing VAT on the Sale of Non-Food Agricultural 2007
Products, Marine and Forest Products and on the Sale of
Cotton and Cotton Seeds in their Original State
Digest | Full Text
RMC No. 39- Clarifying the Income Tax and VAT Treatment of Agency June 13,
2007 Fees/Gross Receipts of Security Agencies Including the 2007
Withholding of Taxes Due Thereon
Digest | Full Text | Annex A
RMC No. 35- Clarifying the Proper VAT and EWT Treatment of Freight June 30,
2006 and Other Incidental Charges Billed by Freight Forwarders 2006
Digest | Full Text
RMC No. 31- Value Added Tax (VAT) on the Construction or Renovation May 30,
2006 of Official Buildings or Properties of the United States of 2006
America Embassy
Digest | Full Text | Annex A
RMC No. 30- Prescribing the Submission of a Narrative Memorandum May 22,
2006 Report to Accompany the VAT Credit Evaluation Report 2006
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 One-Stop Shop Inter-Agency Tax
Credit and Duty Drawback Center (DOF-OSS)
Digest |Full Text
RMC No. 22- Clarifying certain issues relating to the implementation of April 6, 2006
2006 the increase in the Value-Added Tax rate from 10% to
12% on the sale of goods pursuant to Republic Act No.
9337
Digest | Full Text
RMC No. 21- Clarification of Issues on How to Fill-up the new Version of April 6, 2006
2006 VAT Forms (September, 2005 Version) and other Related
Issues
Digest | Full Text
RMC No. 8- Clarifying certain issues relating to the implementation of February 1,
2006 the increase in the VAT rate from 10% to 12% pursuant to 2006
Republic Act No. 9337
Digest | Full Text
RMC No. 5- Prescribing the use of the Government Money Payment January 20,
2006 Chart Implementing Sections 2.57.2, 4.114 and 5.116 of 2006
Revenue Regulations No. 2-98 as amended by Revenue
Regulations No. 16-2005 in relation to Sections 57 (B), 114
(C) and 116 to 123 of Republic Act No. 8424 as amended
by Republic Act No. 9337
Digest | Full Text | Annex A
RMC No. 72- Transition procedures for all Electronic Filing and December 22,
2005 Payment System filers (Large Taxpayers/Top 10,000 2005
Corporations) in filing tax returns affected by the new VAT
Law (R.A. 9337)
Digest | Full Text
RMC No. 68- Enhanced VAT forms – BIR Form No. 2550M (Monthly December 8,
2005 Value-Added Tax Declaration) and BIR Form No. 2550Q 2005
(Quarterly Value-Added Tax Return) – September 2005
version
Digest | Full Text | Annex A-1 | Annex A-2 | Annex B-
1 |Annex B-2
RMC No. 62- Revised guidelines in the registration and invoicing November 3,
2005 requirements including clarification on common issues 2005
affecting Value-Added Tax (VAT) taxpayers Pursuant to RA
No. 9337 (An Act Amending Sections 27, 28, 34, 106, 108,
109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151,
236, 237 and 288 of the National Internal Revenue Code of
1997, as Amended, and for other Purposes)
Digest | Full Text
RMC No. 57- Attachments to the quarterly VAT return to be filed starting October 20,
2005 October 25, 2005 2005
Digest | Full Text
RMC No. 52- Value-Added Tax (VAT) Liability of the Tollway Industry October 3,
2005 Digest | Full Text 2005
RMC No. 29- Clarifying the provisions of Republic Act No. 9337 (VAT July 1,
2005 Law of 2005) applicable to the petroleum industry 2005
Digest | Full Text
RMC No. 70- Clarification on proper determination of amount of Value- November 23,
2004 Added Tax on VAT invoices or VAT official receipts 2004
Digest | Full Text
RMC No. 60- Clarification regarding the withholding of creditable Value- September 23,
2004 Added Tax by government offices for purchases of 2004
P1,000.00 and below
Digest | Full Text
RMC No. 37- Settlement of the Value-Added Tax liabilities of pawnshops June 16,
2004 for taxable years 1996 to 2002 2004
Digest | Full Text | Annex A | Annex 1 | Annex 2
RMC No. 9- Guidelines and Policies Applicable to the Business Tax February 20,
2004 Applicable to Banks and Non-Bank Financial 2004
Intermediaries Performing Quasi-Banking Functions and
other Non-Bank Financial Intermediaries As A Result of the
Enactment and Effectivity of Republic Act No. 9238, An Act
Amending Certain Provisions of the National Internal
Revenue Code of 1997, As Amended, byExcluding Several
Services from the Coverage of the Value-Added Tax and
Re-Imposing the Gross Receipts Tax on Banks and Non-
Bank Financial IntermediariesPerforming Quasi-Banking
Functions and Other Non-Bank Financial Intermediaries
Beginning January 1, 2004
Digest | Full Text | RA No. 9238
RMC No. 2- Clarifying the Issues on VAT Taxable Transactions of January 7,
2004 Philippine Ports Authority Amending Revenue 2004
Memorandum Circular No. 20-88, Pursuant to Republic
Act No. 7716 as Implemented by Revenue Regulations
No. 7-95
Digest | Full Text
RMC No. 6- Clarifying Certain Issues Relative to the Services Rendered January 22,
2003 by Individual Professional Practitioners, General 2003
Professional Partnerships, Entertainers, and Professional
Athletes Who Are Subject to the Value-Added Tax or
Percentage Tax, whichever is Applicable, Beginning
January 1, 2003
Digest | Full Text| Annex A
RMC No. 61- Issuance of VAT Invoices/Receipt for Non-VAT/Exempt October 8,
2003 Sale of Goods, Properties or Services 2003
Digest | Full Text
RMC No. 49- Amending Answer to Question Number 17 of Revenue August 27,
2003 Memorandum Circular No. 42-2003 and Providing 2003
Additional Guidelines on Issues Relative to the Processing
of Claims for Value-Added Tax (VAT) Credit/Refund,
Including Those Filed with the Tax and Revenue Group,
One-Stop Shop Inter-Agency Tax Credit and Duty
Drawback Center, Department of Finance (OSS-DOF) by
Direct Exporters
Digest | Full Text
RMC No. 42- Clarifying certain issues raised relative to the processing July 23,
2003 of claims for Value-Added Tax (VAT) credit/refund, 2003
including those filed with the Tax and Revenue Group,
One-Stop Shop Inter-Agency Tax Credit and Duty
Drawback Center, Department of Finance (OSS-DOF) by
Direct Exporters
Digest | Full Text
RMC No. 30- Clarification of Paragraph 1-Q of Revenue Memorandum May 21,
2003 Circular No. 28-2003 2003
Digest | Full Text
RMC No. 56- Taxability of Health Maintenance Organizations (HMOs) for December 18,
2002 VAT purposes 2002
Digest
RMC No. 45- Taxability of Pawnshop Operators for VAT Purposes October 12,
2001 2001
RMC No. 28- Taxability of Movie/Cinema House Operators for VAT July 2,
2001 Purposes 2001
RMC No. 25-99 Disseminating the Ruling of the Commissioner of Internal March 18,
Revenue on the Non-eligibility for VAT Zero-Rating of 1999
Automobile Sales to Entities Registered with PEZA, SBMA
and Clark Development Authority
RMC No. 32-99 Japanese Contractors undertaking Overseas Economic May 3,
Cooperation Fund of Japan (OECF) Funded Project are 1999
Exempt from the eight and one half percent (8.5%)
creditable VAT imposed under Section 114(C) of the Tax
Code of 1997 and to the One Percent (1%) Expanded
Withholding Tax (EWT) imposed under Section 2.57.2(E)
of RR No. 2-98 implementing Section 57(B) of the Tax
Code of 1997

[return to index]

Codal Reference

Title IV, Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended

[return to index]

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 Three Million Pesos (P3,000,000.00): 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 Three Million Pesos (P3,000,000.00).

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 transactions 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.

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?

a. Any person who is VAT-exempt under Sec. 109 of the Tax Code, as amended, may, in relation to
Sec. 109 (2) of the same Code, 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.
b. 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 of the Tax Code, as amended.
c. 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).
d. 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?

a. 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 Three Million Pesos (P3,000,000.00); or
b. 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 :

a. A VAT invoice for every sale, barter or exchange of goods or properties; and
b. 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 Non-VAT
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 P 100,000.00


VAT 12,000.00
Invoice Amount 112,000.00

What is the information that must be contained in the VAT invoice or VAT official receipt?

1. Name of Seller
2. Description of the goods or properties or nature of the service
3. Unit cost
4. Quantity
5. Date of transaction
6. TIN of buyer, if VAT- registered and amount exceeds P1,000.00
7. Address of Buyer
8. Business Style of Buyer
9. Name of Buyer
10. Statement that the seller is a VAT-registered person, followed by his TIN
11. Business Address of the Seller
12. Business Style of the Seller
13. Purchase price plus the VAT, provided that
o The amount of tax shall be shown as a separate item in the invoice or receipt;
o If the sale is exempt from VAT, the term "VAT-EXEMPT SALE" shall be written or printed
prominently on the invoice or receipt;
o 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
o If the sale involves goods, properties or services some of which are subject to and some of which
are zero-rated or exempt from VAT, 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
VAT on each portion of the sale shall be shown on the invoice or receipt.
14. Authority to Print Receipt Number at the lower left corner of the invoice or receipt.

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 "VAT-EXEMPT 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.

Does amortization of input VAT still allowable?

Yes , but is only allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods
purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, That in the case
of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee
upon payment of the compensation, rental, royalty or fee.

What will be the basis of the date of cancellation?

It is the date of issuance of tax clearance by the BIR, after full settlement of all tax liabilities relative to cessation of
business or change of status of concerned taxpayer

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. Sale of electricity by generating, transmission by any entity including the National Grid Corporation of the
Philippines (NGCP), and distribution companies including electric cooperatives shall be subject to twelve
percent (12%) VAT on their gross receipts.;
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.

What is a zero-rated sale?

It is a sale, barter or exchange of goods, properties and/or services subject to 0% VAT pursuant to Sections 106 (A)
(2) and 108 (B) of the Tax Code. It is a taxable transaction for VAT purposes, but shall not result in any output tax.
However, the input tax on purchases of goods, properties or services, related to such zero-rated sales, shall be available
as tax credit or refund in accordance with existing regulations.

What transactions are considered as zero-rated sales?


The following services performed in the Philippines by VAT-registered person shall be subject to zero percent (0%)
rate:

a. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which
goods are subsequently exported where the services are paid for in acceptable foreign currency and accounted
for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
b. Services other than processing, manufacturing or repacking rendered to a person engaged in business
conducted outside the Philippines or to a non-resident person engaged in business who is outside the
Philippines when the services are performed, the consideration for which is paid for in acceptable foreign
currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas
(BSP);
c. Services rendered to persons or entities whose exemption under special laws or international agreements to
which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;
d. Services rendered to persons engaged in international shipping or air transport operations, including leases
of property for use thereof; Provided, that these services shall be exclusively for international shipping or air
transport operations. (Thus, the services referred to herein shall not pertain to those made to 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, the same being subject to twelve percent (12%) VAT under Sec. 108 of the
Tax Code, as amended);
e. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods
for an enterprise whose export sales exceeds seventy percent (70%) of total annual production;
f. Transport of passengers and cargo by domestic air or sea carriers from the Philippines to a foreign country.
(Gross receipts of international air carriers and international sea carriers doing business in the Philippines
derived from transport of passengers and cargo from the Philippines to another country shall be exempt from
VAT; however they are still liable to a percentage tax of three percent (3%) based on their gross receipts
derived from transport of cargo from the Philippines to another country as provided for in Sec. 118 of the
Tax Code, as amended); and
g. Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass,
solar, wind, hydropower, geothermal and steam, ocean energy, and other shipping sources using technologies
such as fuel cells and hydrogen fuels; Provided, however that zero-rating shall apply strictly to the sale of
power or fuel generated through renewable sources of energy, and shall not extend to the sale of services
related to the maintenance or operation of plants generating said power.

The following sales 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 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);
2. The sale of raw materials or packaging materials to a non-resident buyer for delivery to as 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;
4. Transactions considered export sales under Executive Order No. 226, otherwise known as the
Omnibus Investments Code of 1987, and other special laws; and
5. The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or
international air transport operations; Provided, That the goods, supplies, equipment, and fuel shall
be used exclusively for international shipping or air transport operations; Provided, that the same is
limited to goods, supplies, equipment and fuel that shall be used in the transport of goods and
passengers 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 from 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 than the mentioned in this paragraph, such portion of
fuel, goods and supplies shall be subject to twelve percent (12%) output VAT.
b. Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement

Sale of goods or property to persons or entities who are tax-exempt under special laws or international agreements to
which the Philippines is a signatory, such as, Asian Development Bank (ADB), International Rice Research Institute
(IRRI), subject such sales to zero rate.

What are the transactions which are no longer subject to zero-percent (0%)?

1. Sale of gold to BSP


2. Foreign-currency denominated sales

Upon the successful establishment and implementation of an enhanced VAT refund system by the Department of
Finance (DOF), what are the transactions that will now be subject to twelve percent (12%) and no longer be subject
to zero percent (0%)?

1. 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;
2. The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed
seventy percent (70%) of total annual production;
3. Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus
Investments Code of 1987, and other special laws
4. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which
goods are subsequently exported where the services are paid for in acceptable foreign currency and accounted
for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); and
5. Services performed by subcontractors and/or contractors in processing, converting, or
manufacturing goods for an enterprise whose export sales exceeds seventy percent (70%) of total
annual production.

What transactions are considered deemed sales?

The following transactions are considered as deemed sales:

Transfer, use or consumption, not in the course of business, of goods or properties originally intended for sale or for
use in the course of business. Transfer of goods or properties not in the course of business can take place when VAT-
registered person withdraws goods from his business for his personal use;

a. Distribution or transfer to:


o Shareholders or investors as share in the profits of the VAT-registered person; or
o Creditors in payment of debt or obligation
b. 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;
c. 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";
o Change of ownership of the business. There is a change in the ownership of the business when
a single proprietorship incorporated; or the proprietor of a single proprietorship sells his
entire business
o Dissolution of a partnership and creation of a new partnership which takes over the business.

What is VAT-exempt sale?

It is a sale of goods, properties or service and the use or lease of properties which is not subject to output tax and
whereby the buyer is not allowed any tax credit or input tax related to such exempt sale.

What are the VAT-exempt transactions?

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 therefore;
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
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
custom duties under the Tariff and Customs Code of the Philippines;
d. Importation of professional instruments and implements, tools of trade, occupation or employment, wearing
apparel, domestic animals, and personal and household effects ( except vehicles, vessels, aircrafts
machineries and other similar goods for use in manufacture which are subject to duties, taxes and other
charges) belonging to persons coming to settle in the Philippines or Filipinos or their families and descendants
who are now residents or citizens of other countries, such parties hereinafter referred to as overseas Filipinos,
in quantities and of the class suitable to the profession, rank or position of the persons importing said items,
for their own use and not barter or sale, accompanying such persons, or arriving within a reasonable time;
Provided, That the Bureau of Customs may, upon the production of satisfactorily evidence that such persons
are actually coming to settle in the Philippines and that the goods are brought from their place of residence,
exempt such goods from payment of duties and taxes.
e. Services subject to percentage tax under Title V of the Tax Code, as amended;
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;
h. Educational services rendered by private educational institutions duly accredited by the Department of
Education (DepED), the Commission on Higher Education (CHED) and the Technical Education and Skills
Development Authority (TESDA) and those rendered by the government educational institutions;
i. Services rendered by individuals pursuant to an employer-employee relationship;
j. Services rendered by regional or area headquarters established in the Philippines by multinational
corporations which act as supervisory, communications and coordinating centers for their affiliates,
subsidiaries or branches in the Asia-Pacific Region and do not earn or derive income from the Philippines;
k. Transactions which are exempt under international agreements to which the Philippines is a signatory or
under special laws except those granted under P.D. No. 529 - Petroleum Exploration Concessionaires under
the Petroleum Act of 1949;
l. Sales by agricultural cooperatives duly registered and in good standing with the Cooperative Development
Authority (CDA) to their members, as well as of their produce, whether in its original state or processed
form, to non-members, their importation of direct farm inputs, machineries and equipment, including spare
parts thereof, to be used directly and exclusively in the production and/or processing of their produce;
m. Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered and in good
standing with the Cooperative Development Authority;
n. Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with and in good standing
with CDA; Provided, that the share capital contribution of each member does not exceed Fifteen Thousand
Pesos (P15,000.00) and regardless of the aggregate capital and net surplus ratably distributed among the
members;
o. Export sales by persons who are not VAT-registered;
p. The following sales of real properties:
i. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course
of trade or business.
ii. Sale of real properties utilized for low-cost housing as defined by RA No. 7279, otherwise known
as the "Urban Development and Housing Act of 1992" and other related laws, such as RA No. 7835
and RA No. 8763;
iii. Sale of real properties utilized for specialized housing as defined under RA No. 7279, and other
related laws, such as RA No. 7835 and RA No. 8763, wherein price ceiling per unit is Php
450,000.00 or as may from time to time be determined by the HUDCC and the NEDA and other
related laws;
iv. Sale of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and
below, or house and lot and other residential dwellings valued at Two Million Five Hundred
Thousand Pesos (P2,500,000.00) and below, as adjusted using latest Consumer Price Index
values. (If two or more adjacent lots are sold or disposed in favor of one buyer, for the purpose of
utilizing the lots as one residential lot, the sale shall be exempt from VAT only if the aggregate
value of the lots do not exceed One Million Five Hundred Thousand Pesos
(P1,500,000.00). Adjacent residential lots, although covered by separate titles and/or separate tax
declarations, when sold or disposed to one and the same buyer, whether covered by one or separate
Deed of Conveyance, shall be presumed as a sale of one residential lot.)
q. Lease of residential units with a monthly rental per unit not exceeding Fifteen Thousand Pesos
(P15,000.00), regardless of the amount of aggregate rentals received by the 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
Philippine Statistics Authority (Formerly known as 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. Transport of passengers by international carriers;
t. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine equipment and spare
parts thereof for domestic or international transport perations; Provided, that the exemption from VAT on the
importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements on
restriction on vessel importation and mandatory vessel retirement program of Maritime Industry Authority
(MARINA);
u. Importation of fuel, goods and supplies by persons 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;
v. 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
w. Sale or lease of goods and services to senior citizens and persons with disabilities, as provided under Republic
Act Nos. 9994 (Expanded Senior Citizens Act of 2010) and 10754 (An Act Expanding the Benefits and
Privileges of Persons with Disability), respectively;
x. Transfer of property in merger or consolidation (pursuant to Section 40(C)(2) of the Tax Code, as amended);
y. Association dues, membership fees, and other assessments and charges collected on a purely reimbursement
basis by homeowners’ associations and condominium established under Republic Act No. 9904 (Magna
Carta for Homeowners and Homeowner’s Association) and Republic Act No. 4726 (The Condominium Act),
respectively;
z. Sale of gold to the Banko Sentral ng Pilipinasn (BSP) (previously zero-rated transaction);
aa. Sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension (beginning on
January 1, 2019 as determined by the Department of Health); and
bb. 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 Three Million
Pesos (Php 3,000,000.00). Note: Self-employed individuals and professionals availing of the 8% on gross
sales and/or receipts and other non-operating income, under Sections 24 (A)(2)(b) and 24 (A)(2)(c)(2) of the
NIRC shall also be exempt from the payment of twelve (12%) VAT.

What is the difference between a low-cost and a socialized housing?

“Low-cost housing” refers to housing projects intended for homeless low-income family beneficiaries, undertaken by
the Government or private developers, which may either be a subdivision or a condominium registered and licensed
by the Housing and Land Use Regulatory Board/Housing (HLURB) under BP Blg. 220, PD No. 957 or any other
similar law, wherein the unit selling price is within the selling price per unit as set by the Housing and Urban
Development Coordinating Council (HUDCC) pursuant to RA No. 7279 otherwise known as the “Urban Development
and Housing Act of 1992” and other laws.

“Socialized housing” refers to housing programs and projects covering houses and lots or home lots only undertaken
by the Government or private sector for the underprivileged and homeless citizens which shall include sites and
services development, long-term financing, liberated terms on interest payments, and such other benefits in accordance
with the provision or RA No. 7279, otherwise known as the “Urban Development and Housing Act of 1992” and RA
No. 7835 and RA No. 8763. It shall also refer to projects intended for the underprivileged and homeless wherein the
housing package selling price is within the lowest interest rates under the Unified Lending Program (UHLP) or any
equivalent housing program of the Government, the private sector or non-government organizations.

II. RELIEF-Related Queries

What is "RELIEF"?

RELIEF means Reconciliation of Listing for Enforcement. It supports the third party information program of the
Bureau through the cross referencing of third party information from the taxpayers' Summary Lists of Sales and
Purchases prescribed to be submitted on a quarterly basis.

Who are required to submit Summary List of Sales?

VAT taxpayers with quarterly total sales/receipts (net of VAT), exceeding Two Million Five Hundred Thousand Pesos
(P2,500,000.00) are required to submit a Summary List of Sales.

Who are required to submit Summary List of Purchases?


VAT taxpayers with quarterly total purchases (net of VAT) of goods and services, including importation exceeding
One Million Pesos (P1,000,000.00) are required to submit Summary List of Purchases.

What are the Summary Lists required to be submitted?

 Quarterly Summary List of Sales to Regular Buyers/ Customers Casual Buyers/ Customers and Output Tax
 Quarterly Summary of List of Local Purchases and Input tax; and
 Quarterly Summary List of Importation.

When is the deadline for submission of the above Summary Lists?

The Summary List of Sales/Purchases, whichever is applicable, shall be submitted on or before the twenty-fifth (25th)
day of the month following the close of the taxable quarter -- calendar quarter or fiscal quarter.

What are the penalties for failure to submit the Summary Lists?

 For failure to file, keep or supply a statement, list or information required on the date prescribed shall pay
and administrative penalty of One Thousand Pesos (P1,000.00) for each such failure, unless it is shown that
such failure is due to reasonable cause and not to willful neglect; and
 An aggregate amount to be imposed for all such failures during a taxable year shall not exceed Twenty-Five
Thousand Pesos (P25,000.00).

III. What is the treatment for Withholding of VAT on Government Money Payments?

The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or
controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and/or services
taxed at twelve percent (12%) VAT pursuant to Sections 106 and 108 of the Tax Code, deduct and withhold a Final
VAT due at the rate of five percent (5%) of the gross payment.

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 exceed
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.

The government or any of its political subdivisions, instrumentalities or agencies including GOCCs, as well as private
corporation, individuals, estates and trusts, whether large or non-large taxpayers, shall withhold twelve percent (12%)
VAT with respect to the following payments:

Lease or use of properties or property rights owned by non-residents; and

Other services rendered in the Philippines by non-residents.

IV. In what grounds can the Commissioner of Internal Revenue suspend the business operations
of a taxpayer?
The Commissioner or his authorized representative is empowered to suspend the business operations and temporarily
close the business establishment of any person for any of the following violations:

a. In the case of a VAT-registered Person:


o Failure to issue receipts or invoices;
o Failure to file a value-added-tax return as required under Section 114; or
o Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct taxable
sales or receipts for the taxable quarter.
b. Failure to any Person to Register as Required under Section 236
o The temporary closure of the establishment shall be for the duration of not less than five (5) days
and shall be lifted only upon compliance with whatever requirements prescribed by the
Commissioner in the closure order.