4/2/2020 VAT Part 2 of 3 - Input/Output VAT, Invoicing and Withholding VAT

VALUE ADDED TAXES – PART 2 OF 3

Input and Output Tax, Invoicing and Withholding VAT

I. READINGS

1. 1997 NIRC as amended by TRAIN1

2. De Leon Commentaries
3. Revenue Regulations 16-2005 as amended by RR 13-2018

II. TOPICS

11. Input and Output tax

• Kapatiran ng Naglilingkod sa Pamahalaan, 163 SCRA 371
• Philippine Geothermal Inc. v. CIR, G.R. No. L-154028, 2005
• Fort Bonifacio Development Corp v. CIR, G.R. No. 173425, 2013
• Diaz v. Secretary of Finance, G.R. No. 193007, 2011
a) Definition
b) Sources of input tax
(1) Purchase or importation of goods
(2) Purchase of real properties for which VAT has actually been paid
(3) Purchase of services for which VAT has actually been paid
(4) Transactions deemed sale
(5) Presumptive input
(6) Transitional input
c) Persons who can avail of input tax credits
d) Determination of output/input tax; VAT payable; excess input tax credits
(1) Determination of output tax
(2) Determination of creditable input tax
(3) Allocation of input tax on mixed transactions
(4) Determination of the output tax and VAT payable and computation of VAT payable or excess tax credits
e) Substantiation of input tax credits

13. Invoicing Requirements

a) In general
b) In “deemed sale” transactions
c) Consequences of issuing erroneous VAT invoice or VAT official receipt
14.Filing of returns and payment
15.Withholding of final VAT on sales to government

III. GUIDE QUESTIONS / HOMEWORK

All answers must have a legal basis. Source must be cited. Examples:
• Tax Code – Sec. 105 of the Tax Code provides…
• Revenue Regulation – (RR. No. 16-2005, Sec. 4.107-1)
• Commentaries or other texts – According to de Leon (p. 147)

1. Case digests – ratio or rule only.

2. Define
a. Tax Credit Method
b. Input VAT
c. Output VAT
d. Transitional Input VAT
e. Presumptive Input VAT
f. Withholding VAT
g. VAT Invoice
h. VAT Official Receipt

3. Enumerate
a. Sources of Input VAT
b. Sources of Output VAT
c. Types of Withholding VAT, including rates
d. Information to be contained in a VAT invoice / official receipt
e. Consequences of issuing an erroneous VAT/nonVAT invoice or official receipt

4. How do you:
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4/2/2020 VAT Part 2 of 3 - Input/Output VAT, Invoicing and Withholding VAT
a. Determine VAT payable
b. Determine Input VAT on mixed transactions
c. Compute for Input VAT on depreciable goods
d. Substantiate Input VAT credits
e. File a VAT return. When is it due. Where should it be filed
f. Cancel a VAT registration

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