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.

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

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):

iness Industry Period for filing Monthly VAT
Declarations
Group A
Insurance and Pension Funding 25 days following the end of 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 the month
Manufacture of Basic Metals
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 the month
Wholesale Trade and Commission Trade
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 the month
Electricity, Gas, Steam & Hot Water Supply
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 the month
Health and Social Work
Public Admin & Defense Compulsory Social Security
Research and Development
Agricultural, Hunting, and Forestry
Farming of Animals
Fishing
Other Service Activities
Miscellaneous Business Activities
Unclassified

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.

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%

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 the April 5, 2018
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 Tax March 15, 2018
(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 pursuant to RA February 20, 2018
No. 10963 (TRAIN Law)
(Published in Manila Bulletin on February 22, 2018) Digest|Full Text
RR No. 1-2017 Prescribes the regulations governing applications for Value-Added January 18, 2017
Tax (VAT) credit/refund filed under Section 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 additional June 1, 2016
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. 16-2005, as December 28, 2015
amended, relative to sale, importation or lease 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 for May 27, 2015
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 (VAT or March 31, 2015
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 to taxpayers March 17, 2015
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 service March 20, 2014
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 accounts September 27,
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 relative to September 20,
the definition of raw sugar for Value-Added Tax purposes 2013
(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 other April 22, 2013
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 tax January 23, 2013
returns and pay taxes through the Electronic Filing and 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 as a December 5, 2012
prerequisite to the printing services of official receipts, 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 residential lots, October 12, 2012
house and lots or other residential 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 minerals April 2, 2012
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, 2012
residential lot, sale of house and lot, lease of residential unit 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 List of February 20, 2012
Sales and Purchases by all VAT registered 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 Output November 21,
Tax on the sale of goods and services should be separately indicated 2011
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 residential October 28, 2011
lot, sale of house and lot, lease of residential unit 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 by RR No. July 7, 2011
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 and June 29, 2011
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 application March 7, 2011
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, retention and December 29, 2009
submission of electronic records
(published in Manila Bulletin on December 31, 2009)
Digest | Full Text
RR No. 13-2008 Consolidated Regulations on Advance Value-Added Tax on the Sale September 9,
of Refined Sugar; Amending and/or Revoking All Revenue 2008
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-Added December 5,
Tax/Percentage Tax on the Transport of Naturally Grown Planted 2007
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 No. 6- August 28,
2007 2007
(published in Manila Bulletin on August 29, 2007) Digest | Full Text
RR No. 6-2007 Consolidated Regulations on Advance Value-Added Tax on the Sale May 9, 2007
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 Amended, March 20,
Otherwise Known as the Consolidated Value-Added Tax 2007
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 Amended, January 11,
 Otherwise Known as the Consolidated Value-Added Tax 2007
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 Value-Added March 26,
Tax on Sale of Refined Sugar as Provided for in RR 2-2004 2004
(published in Taliba on March 31, 2004) Digest | Full Text
RR No. 2-2004 Further Enhancing the Rules on the Advance Payment of Value- February 26,
Added Tax on Sale of Refined Sugar, Amending RR 7-89 and 29- 2004
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 Amended, November 20,
Relative to the Issuance of Certificate of Value-Added Tax Withheld 2003
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 RR 18- October 9,
99 as Amended by RR 12-2003, Pertaining to the Deadline for the 2003
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 the February 4,
Following: (a) 70% Share of the ARMM in the Withholding Tax 2003
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- Added Tax December 20,
on the Sale of Refined Sugar, thereby Amending RR 7-89, and Other 2002
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 for the December 19, 2002
staggered filing of returns of taxpayers enrolled in 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 Amended, June 24,
With Respect to the Time of Filing of Quarterly VAT Returns; 2002
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 the May 17, 1998
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. 20-2018 Prescribes the revised policies and procedures on the processing of May 3, 2018
Tax Credit Certificates (TCCs) for cash conversion
Full Text
RMO No. 16-2017 Amends certain provisions of RMO No. 5-2004 particularly on the July 21, 2017
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. 16-2015 Amends RMO No. 19-2012 re: Value-Added Tax Audit Program of August 14, 2015
the Large Taxpayers Service
Digest|Full Text|Annex A

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

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 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.