MANDATORY

VAT REGISTRATION

The following are required to register for VAT:

1. Any person whose gross sales or receipts for the past 12-months, other that those
that are exempt, have exceeded 3M.
2. There are reasonable ground to believe that the gross sales or receipt for the next
12 months, other than those exempt, will exceed 3M.
3. Franchise grantees of radio and/or television broadcasting, whose gross annual
receipts for the preceding calendar year exceeded 10M shall register within 30 days
from the end of the taxable year.

PENALTY FOR FAILURE TO REGISTER AS VAT TXPAYER

He shall be liable to pay the tax as if he was a VAT registered person, but he cannot
avail of the benefits of input tax credit for the period he was not properly registrered.

OPTIONAL VAT REGISTRATION FOR VAT EXEMPT PERSONS

Any person whose sale or lease of goods or properties or the performance of
services, other than the exempt transactions, the gross annual sales or receipts do not
exceed 3M may 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 for every
separate ad distinct establishment:

Once the election is made, it shall be irrevocable for a period of three (3) years
counted from the quarter when the election was made except for franchise grantees of
radio and TV broadcasting whose annual gross receipts for the preceding year do not
exceed P10M where the option becomes perpetually irrevocable.

REGISTRATION OF NON-VAT or EXEMPT TAXPAYERS

Every person, other than those required to be registered as VAT persons, engaged in
any business, shall, on or before the commencement of his business, or whenever he
transfers to another revenue district, register with the RDO concerned within 10 days from
the commencement of business of transfer and shall pay the applicable registration fee of
P500 for every separate or distinct establishment or place of business, if he has not paid the
registration fee in the beginning of the taxable year.

1. VAT exempt persons who did not opt to register as VAT Taxpayer.
2. Individuals engaged in the business where the gross sales or receipts do not exceed
P100,000 during any 12month period. They are required to register but will not be
made to pay the registration fee of P500.
3. Non-stock, non-profit organizations and associations engaged in trade or business
whose gross sales or receipts do not exceed P3M for any 12-month period.
4. Cooperatives, other that electric cooperatives. However, they are not required to
pay the registration fee imposed under the regulations.
5. Radio and TV broadcasting whose gross annual receipts do not exceed P10M and
which do not opt to be VAT Registered.
6. PEZA and other ecozone registered enterprises enjoying the preferential tax rate of
5% in lieu of all taxes.
7. SMBA and other free port zone registered enterprises enjoying the preferential tax
rate of 5% in lieu of all taxes.

Date of Registration - On or before the 31st day or January of every year.

Annual Registration fee – P500 for every separate or distinct establishment or place of
business, including facility types where sales transactions occur, before the start of such
business and every year thereafter.

COMPLIANCE REQUIREMENTS
INVOICING REQUIREMENTS FOR VAT-REGISTERED PERSONS

1. VAT- Registered person shall issue:
a. VAT invoice for every sale, barter, or exchange of goods or properties;
b. VAT official receipt for every lease of goods or properties and sale or
exchange of services.

2. Information contained in the Invoice or Official Receipt:
a. Statement that the seller is a VAT-registered person, followed by his TIN;
b. Total amount which purchaser pays or is obligated to pay to the Seller with
the indication that such amount includes the VAT: Provided that:
i. The amount of the tax shall be shown as a separate item in the
invoice or receipt;
ii. If the sale is exempt from VAT, the term “VAT-Exempt Sale”
shall be written or printed prominently on the invoice or
receipt;
iii. 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;
iv. If the sale involves goods, properties or services some of which
are subject to and some of which are VAT zero-rated or VAT-
exempt, the invoice or receipt shall clearly indicate the
breakdown of the sale 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 the receipt:
Provided, that the seller may issue separate invoices or
receipts for the taxable exempt, and zero-rated components of
the sale.

3. The date of transaction, quantity, unit cost and description of the goods or
properties or nature of the services;
4. In case of sales in the amount of P1,000 or more, where the sale or transfer is made
to VAT-registered person, the name, business style, if any, address and TIN of the
purchaser/customer.

ACCOUNTING REQUIREMENTS

All persons subject to VAT shall, in addition to the regular accounting records
required, maintain subsidiary sales journal and subsidiary purchase journal on which
the daily sales and purchases are recorded. The subsidiary journals shall contain suc
information as may be required by the Secretary of Finance.