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Vat T
Vat T
Vat T
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):
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
RMO No. Reiterates and prescribes certain policies relative to the April 3,
16-2014 VAT Audit Program 2014
ull Text
Digest|F
RMO No. Amends the 2012 Value-Added Tax (VAT) Audit Program October 11,
27-2013 Digest | Full Text 2013
RMO No. Prescribes the procedures and guidelines on the March 21, 2013
5-2013 redemption of Notice of Payment Schedule relative to the
implementation of the VAT TCC Monetization Program
Digest | Full Text
RMO No. Prescribes the policies, guidelines and procedures in the September 10,
21-2012 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. Prescribes the policies and procedures for the September 5,
20-2012 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. Prescribes the policies and procedures in the August 31, 2012
19-2012 Value-Added Tax Audit Program for Large Taxpayers
Service
Digest | Full Text | Annex A | Annex B | Annex B-1 |Annex
C | Annex C-1
RMO No. Enjoins the strict implementation of the penalty provisions April 30, 2009
12-2009 for non-submission of Quarterly Summary Lists of Sales
and Purchases
Digest | Full Text
RMO No. Amendment and Consolidation of the Guidelines in the January 23,
3-2009 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. Prescribing the Guidelines and Procedures in the Printing, February 20,
6-2008 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. Prescribing Additional Procedures in the Audit of Input July 23,
16-2007 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. Prescribing the guidelines and procedures in the February 28,
7-2006 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. Suspension of issuance of assessments for deficiency October 21,
26-2005 Value-Added Tax against cinema/theater 2005
operators/owners
Digest | Full Text
RMO No. Value-Added Tax (VAT) Exemption Certificate/ May 24, 2004
22-2004 Identification Card Issued to qualified foreign embassies
and their qualified personnel Amending/ Modifying RMO
No. 81-99
Digest | Full Text
RMO No. Prescribing the guidelines and procedures in the February 4,
5-2004 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. Prescribing the guidelines and procedures in the December 11,
35-2002 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. Tax treatment of sales of goods, properties and services March 29,
9-2000 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. Amends certain provisions of RMC Nos. 89-2017 and March 8, 2018
17-2018 54-2014 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)
ull
Digest|F Text|Annex nnex
A.1|A A.1.1| Annex
A.1.2-1.12|Annex A.2|Annex B|Annex C|A nnex D|Annex
E|Annex F
RMC No. Amends RMC No. 51-2007 relative to the processing of October 24,
89-2017 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|F ull Text
RMC No. Prescribes the new template of Value-Added Tax March 7, 2017
23-2017 Exemption Identification Card issued to qualified
diplomats, officials and dependents of the US Embassy
Digest|F ull Text|A nnex A|Annex B
RMC No. Amends Question and Answer to No. 12 of RMC No. March 2, 2017
19-2017 80-2010 regarding the issuance of Electronic Letters of
Authority for Value-Added Tax credit/refund claims filed by
direct exporters
Digest|F ull Text
RMC No. Publishes the full text of Joint Circular No. 002.2014 of the December 2,
82-2014 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|F ull Text |Joint Circular
RMC No. Clarifies the livestock and poultry feeds or ingredients June 27,
55-2014 used in the manufacture of finished feeds to be exempt 2014
from VAT
Digest|F ull Text
RMC No. Clarifies the issues relative to the application for June 17,
54-2014 Value-Added Tax (VAT) refund/credit under Section 112 2014
of the Tax Code, as amended
Digest|F ull Text|A nnex A|Annex B
RMC No. Circularizes BIR Ruling No. 123-2013 re: recovery of August 29, 2013
57-2013 unutilized creditable input taxes attributable to VAT
zero-rated sales
Digest | Full Text
RMC No. Publishes the full text of Joint Circular No. 6-2012 entitled January 25,
8-2013 “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. Publishes the full text of Joint Circular No. 5-2012 entitled January 18,
5-2013 "Joint Guidelines Implementing the Special Provision of 2013
the General Appropriations Act on VAT Refunds on
Importation"
Digest | Full Text | Annex A
RMC No. Clarifies Section 109(1)(R) of the National Internal November 23,
75-2012 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. Reiterates the requirement on the submission of Quarterly September 27,
58-2012 Value-Added Tax (VAT) Report per city/municipality 2012
Digest | Full Text
RMC No. Amends the deadline for the filing of Applications for September 3,
51-2012 Value-Added Tax (VAT) Tax Credit Certificates (TCCs) 2012
Monetization
Digest | Full Text
RMC No. Prescribes the guidelines in the filing of application for August 22, 2012
47-2012 enrollment in the Value-Added Tax (VAT) Tax Credit
Certificates (TCCs) Monetization Program
Digest | Full Text | Annex A
RMC No. Circularizes the full text of Executive Order No. 68 entitled May 3, 2012
21-2012 “Monetization Program of Outstanding Value-Added Tax
(VAT) Tax Credit Certificates (TCCs)”
Digest | Full Text
RMC No. Circularizes the En Banc Resolution of the Supreme Court November 8,
54-2011 denying with finality the Motion for Reconsideration on 2011
G.R. No. 193007 upholding the validity of imposition of
VAT on Toll Fees
Digest | Full Text
RMC No. Further clarifies RMC No. 38-2011 on Expanded October 11,
49-2011 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. Imposes the Value-Added Tax on Tollway Operators July 20, 2010
63-2010 Digest | Full Text
RMC No. Clarifies the coverage of RMO No. 56-2010 relative to the July 13, 2010
60-2010 use of updated medium for submitting the Summary List
of Sales and Purchases (SLSP)
Digest | Full Text
RMC No. Disseminates the most recent policies on the audit of all June 29, 2010
56-2010 internal revenue tax liabilities for the year 2009
Digest | Full Text
RMC No. Directs the Revenue District Offices to verify the VAT May 21, 2010
39-2010 Compliance of Health Maintenance Organizations
Digest | Full Text
RMC No. Clarifies Revenue Memorandum Circular No. 72-2009, March 26, 2010
30-2010 which reiterated the imposition of the Value-Added Tax on
Tollway Operators
Digest | Full Text
RMC No. Clarifies the Requirement for the Submission of Summary September 16,
51-2009 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. Taxability of Director’s Fees Received By Directors Who December 3,
77-2008 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. Clarification of Issues Concerning Common Carriers by June 20,
46-2008 Air and Their Agents Relative to the Revenue and Receipt 2008
from Transport of Passengers, Goods/Cargoes and Mail,
and from Excess Baggage
Digest | Full Text
RMC No. Tax Treatment of Director’s Fees for Income Tax and April 18,
34-2008 Business Tax Purposes 2008
Digest | Full Text
RMC No. Clarifying the Effect of Suspension of RR No. 6-2007, September 14,
59-2007 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. Reiteration of the Amendment Made by RA No. 9337 August 7,
53-2007 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. Clarifying the Income Tax and VAT Treatment of Agency June 13,
39-2007 Fees/Gross Receipts of Security Agencies Including the 2007
Withholding of Taxes Due Thereon
Digest | Full Text | Annex A
RMC No. Clarifying the Proper VAT and EWT Treatment of Freight June 30,
35-2006 and Other Incidental Charges Billed by Freight Forwarders 2006
Digest | Full Text
RMC No. Value Added Tax (VAT) on the Construction or May 30,
31-2006 Renovation of Official Buildings or Properties of the United 2006
States of America Embassy
Digest | Full Text | Annex A
RMC No. Prescribing the Submission of a Narrative Memorandum May 22,
30-2006 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. Clarifying certain issues relating to the implementation of April 6, 2006
22-2006 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. Clarification of Issues on How to Fill-up the new Version of April 6, 2006
21-2006 VAT Forms (September, 2005 Version) and other Related
Issues
Digest | Full Text
RMC No. Clarifying certain issues relating to the implementation of February 1,
8-2006 the increase in the VAT rate from 10% to 12% pursuant to 2006
Republic Act No. 9337
Digest | Full Text
RMC No. Prescribing the use of the Government Money Payment January 20,
5-2006 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. Transition procedures for all Electronic Filing and December 22,
72-2005 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. Enhanced VAT forms – BIR Form No. 2550M (Monthly December 8,
68-2005 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. Revised guidelines in the registration and invoicing November 3,
62-2005 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. Attachments to the quarterly VAT return to be filed starting October 20,
57-2005 October 25, 2005 2005
Digest | Full Text
RMC No. Value-Added Tax (VAT) Liability of the Tollway Industry October 3,
52-2005 Digest | Full Text 2005
RMC No. Clarifying the provisions of Republic Act No. 9337 (VAT July 1,
29-2005 Law of 2005) applicable to the petroleum industry 2005
Digest | Full Text
RMC No. Clarification on proper determination of amount of November 23,
70-2004 Value-Added Tax on VAT invoices or VAT official receipts 2004
Digest | Full Text
RMC No. Clarification regarding the withholding of creditable September 23,
60-2004 Value-Added Tax by government offices for purchases of 2004
P1,000.00 and below
Digest | Full Text
RMC No. Settlement of the Value-Added Tax liabilities of June 16,
37-2004 pawnshops for taxable years 1996 to 2002 2004
Digest | Full Text | Annex A | Annex 1 | Annex 2
RMC No. Guidelines and Policies Applicable to the Business Tax February 20,
9-2004 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. Clarifying the Issues on VAT Taxable Transactions of January 7,
2-2004 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. Clarifying Certain Issues Relative to the Services January 22,
6-2003 Rendered by Individual Professional Practitioners, 2003
General 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. Issuance of VAT Invoices/Receipt for Non-VAT/Exempt October 8,
61-2003 Sale of Goods, Properties or Services 2003
Digest | Full Text
RMC No. Amending Answer to Question Number 17 of Revenue August 27,
49-2003 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. Clarifying certain issues raised relative to the processing July 23,
42-2003 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. Clarification of Paragraph 1-Q of Revenue Memorandum May 21,
30-2003 Circular No. 28-2003 2003
Digest | Full Text
RMC No. Taxability of Health Maintenance Organizations (HMOs) December 18,
56-2002 for VAT purposes 2002
Digest
RMC No. Taxability of Pawnshop Operators for VAT Purposes October 12,
45-2001 2001
RMC No. Taxability of Movie/Cinema House Operators for VAT July 2,
28-2001 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
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?
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.
The cancellation for registration will be effective from the first day of the following month the cancellation
was approved.
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.
The amount of the tax shall be shown as a separate item in the invoice or receipt.
Sample:
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.
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.
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.
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.
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
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.
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. 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.
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%)?
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.
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;
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.
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.
“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.
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.
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.
● 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.
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 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:
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: