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    21 views6 pages

    Vat Exempt Notes

    Uploaded by

    justine
    vatttt

    Copyright:

    © All Rights Reserved
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    ReSA ‘TAXATION The Review School of Accountancy Tel. No. 735-5807 & 734-3989 ‘TAMAYO/LIM/CAIGA/MANUEL ‘1X.302: VAT-EXEMPT TRANSACTIONS 1 VAT-Exempt Transaction Defined *VaT-exempt transactions” refer to sale of goods or services vi | expressly exempted from VAT, under the Tax Code, without regard te | Transactions not subject to VAT (output tax) are not | making the exempt sale shall not bill any output tax var. ction Under Section 109 _ FORE TRAIN 2. VAT-Exempt Tran: [(@) Sale or importation of: ‘agricultural and marine food products in their onginal state, slivestock and poultry of a kind generally used as, oF yielding ‘F producing foods for human consumption; and __-breeding stock and genetic materials therefor, {(b) Sate or importation of: = fertilizers, seeds, seedings and fingerings, 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, 200 animals and other animals generally ‘considered as pets); (2) Importation of personal and household effects belonging to residents of the Philippines returning from| abroad and non-resident atizens coming to resettle in the Philipines; Provided, That such goods are exempt from customs| ‘duties under the Tanff and Customs Code of the Philippines; —_ | 1 | | [for thar own use and not for sae Sccompenying such persons, or ang within 90 days before or after ther arrival, [upon the production of evidence satisfactory to ie] | that such persons are actually coming to | | Commissioner, | | sete in the Philippines and that the change of residence is jor fide; i | | ‘cept any vehicle, vessel, eircraR, machinery and other | ‘goods for use in the manufacture and merchandise of any and in commercial quantity) e) subject to percentage tax; (6 Services by agricultural contract growers and ‘ruling for others of palay into nice, corn into grits and sugar! cane mo raw sugar, barter or exchange] | ‘entitled to 12x credit of VAT (input tax) on purchases. The person | to his customers because the said transaction is not subject to | fe) Seomees subject te hich, by their nature, are specifically listed in an ‘the tax status of the party in the transaction. ___UNDER TRAIN __ (a) Sale or importation of: “garcultural and marine food products in their onginal state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and _-breeging stock and genetic matenals th (Sale or portation of: fertilizers, seeds, seedlings and fingertings; = fish, prawn, livestock and poultry feeds, inc whether locally produced or imported, used manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, ‘aquanum fish, 200 animals and other animals generally _considered as pets); \(c) Importation of personal and -belonging to residents of the Philippines returning from abroad and -on-restient citizens coming to resettle in the Phiipines; rowded, That such goods are exemot from customs duties Under the Tariff and Customs Code of the Phippines; | Juding ingredients, | in the| (@jimportation of, oe “professional instruments and implements, weaning apparel, domestic animals, and [tools of trade, occupation or employment, personal and household effects i {persons coming to stein the Philipines or zi eS ir families and descendants who are now [ete ot “eicens of ater cours, Such pates romuftes referred toasore'seasPtpios, fants and ofthe cons sutable tothe profession, rank ie ote dao poring sal tere, for ther own use and not for barter or sale, | accompanying such persons, or arriving within a | sonable time: L | Provided, That the Bureau of Customs may, ut | production of satisfactory evidence that such perscn®: ar. actually coming to settle in the Philippines and that the ‘goods are brought from their former place of abode, ‘exempt such goods from payment of duties and taxes: i Provided, further, That vehicles, vessels, aurcrafts, machineries and other similar goods for use in ‘anufacture, shall not fall within this dassfiction and shall mi therefore be subject toduties, taxes and other charges; tage tax; (f) Services by agncuttural contract growers and imiling for others of palay into rice, com into grits and sugar cane into raw sugar, ReSA: The Review School of Accountancy {Gg Medical, dental, hospital and veterinary sernces, except tnose (g) Medical, dental, hospital and vetennary services, except those |__fendered by professionals; Eee | _rendered by professionals; |G) Educational services rendered by: {(h) Educational services rendered by: | = pavate educational institutions, duly accredited by DepEd,| - private educational institutions, duly accredited by Depéd, | GHED and” Technical Education and Skis Developmen HED and Technical Education and Skils Development ‘Authority (TESDA), and Authority (TESDA), and ___=those rendered by government educational nstittions; those rendered by government educational institutions (i) Services rendered by individuals s rendered by individuals pursuant to an employer: employee relationship; _ (GW Services rendered ‘by regional or area headquariers established in the Philipines by mukinational ccrporations | Which act a5 supervisory, communications and coorainating Centers for their affilates, subsidianes or oranches 1 the ‘Asia-Pacific Region and do not earn or denve income from tne 1" empioyee relations, |G) Services rendered by regional or area headquarters exabiched | sr the Priippines by mutinational corporations which act 25 | supervisory, communications and coordinating centers fr thei | Ata, suber branches inthe haw Pace Region do not earn or derve income from the Pippines; Philippines; <=a |W) Transactions which are exempt AW) Transactions which are exempt — |" "under international agreement to which the Philippines is a} -under international agreement to which the Philippines is a| signatory oF under special laws except those granted under PD No. 529, | Petroleum Exploration Concessionaires under Petrcieum Act. of 1948; () Seles by agricutural cooperatives duly registered and 1h gou standing with the Cooperative Development Authenty to their ‘members 2s well as ‘sale of their produce, to non-members; wheter in orca state or processed form, their importation of direct farm inputs, machneries and! ‘equipment, including spare parts thercof, to be used directly ‘and exclusively in the production and/or processing of theit signatory or -under special laws except those granted under PD No. 529° | “ay Sales by agicaral cooperatives Gay veatered ora 00d] Slonding win the Cooperate Development Autonty to ther members 3s wel 25 tai of thor produce, whether nits original state or processed form, to non-members; ther inporavon of rect. form inputs, machinery and | ceupment, icing spare parts tren, to be used rec Sra exchswely mn te production and/or processing of ther | | produce; produce, | | Sale-by aonicutural cooperatives to non-members can only ve | Sale by agricultural cooperatives to. non-members can_only_be | | exempted_from_VAT_if_the producer of thie agucutural exempted from VAT if the producer of the agricultural products | oducts sold the cooperative tse. ithe cooperatives | sold_1s the cooperative Rself,If the cooperate ‘snot the ‘ot the producer (e.0., trader), then only those sales to its | producer (e.a., trader), then only those sales to_ts members | | members shall be exempted from VAT; It s ta be resterated, | shall be exempted from VAT; It is to be reiterated, however, ‘however, that _sale or importation of agricuRural food | that sale or importation of agricultural food products in their | products in_their_oriainal_state_s_exempt_from_v original state 1s exempt from VAT irrespective of the seller and | ‘buyer thereof, pursuant to Subsection (a) hereof; (in) Gross receipts from lending activities by credit or mul |" purpose cooperatives duly Teyistered and’ in good stanting| "purpose cooperetves duly registered and in good standing | | _with the Cooperative Development Authority; ‘with the Cooperative Development Authority; business: (2) Sale of real property utitzed for low-cost housing (price ceiling per unit of: Level 1 - P450,000 to 1,700,000; Level 2 - P1,700,000 to P3,000,000); (3) Sale of reat property utlized for socialized housing (price Ceiling for house and lot ~ P400,000; for lot only ~ P160,000 (40% of the maximum limit prescribed for house and lot package); (4) Sole of resident lot valued at P1,919,500 (used to be | 1,500,000) and below and house and lot and other ‘TAXATION: VAT - EXEMPT TRANSACTIONS (BATCH 37) __tesidential dwellings valued at P3,199,200 (used to be | (@ Sales by non-agricultural, non-electric and non-credit! {5) Sales by non-agricultural, non-electric and non-credit | cooperatives duly registered and in good standing with the) cooperatives duly registered and in good standing with the | Cacberative Development Author; Provided, That the share| Cooperative Development Authorlty; Provided, That the shard Ceptal contribution of each member does not exceed 15,000] capital contributon of each member does not exceed P15,000 ‘nd regardless of the aggregate capta! and net surplus) and regardless of the aggregate capital and net Surplus ratabiy distributed among the members; _ ——— | ___ distributed among the members; __ | Export sales by persons who are not VAT-regisiered, | (o) Export sales by person VAT-registered; [(P) The following sales of real properties are exempt from VAT, | | (52a of real property not otmatly held for sale to {p) Sale of real properties not pnmaniy held forsale to customers | ‘ustomers or held for lease in the ordinary course of trede | orheld forleaéein the ordinary course of trade or business or | or business. | teal property utiized for low-cost and socialized housing as | defined by Republic Act No. 7279, otherwise known as the | Urban Development and Housing Act of 1992, and other | related laws, | residential lot valued at One milion five hundred thousand | pesos (P1,500,000) and beow, house and lot, and other residential dwellings valued at Two million five hundred thousand pesos (P2,500,000)andbelow: Provided, That beginning “January 1, 2021, the VAT | ‘exemption shall only apply to sale of rea/ properties not oidnery course of trade or business, sale. of real property | tied for socialized housing as defined by Repub! No. 7279, sale of house and lot, and other resid ReSA: The Review School of Accountancy 2,500,000) and “below where the instrument of | sale/transfer/disposition was executed on or after July 1, 2005. | Note: Sale of parking lot n a condominium is separate | Note: Sale of parking lot in condominium sa separate and dlstic transaction and isnot covered by the rules on threshold ‘mount not being a residential fot, house and lot ora residential ‘weling, thus, should be subject to VAT regardless of the amount and distinct transaction and is not covered by the rules oct threshold amount not being a residential lot, house and lot or a residential dweling, thus, should be subject to VAT regardless of |(q) Lease of residential units with @ monthly rental not exceeding 12,800 (use to be P10,000) regnrdess of the amount of aggregate rentals received by the| vesSor dung the year, | () Sale or importation, printing or publication of books and any’ (r) Sale or importation, printing or publication of books and any nenspoper, magazine, review or buletin which, oppears, at ‘gular tervals wih fed pres for subseipon and sale ad which is not devoted principally to the publication of paid) _advertisement,_ (s) The transport of: ‘passengers by Intemational carners doing business in the! | Phitppines and transport of congo by international carries doing business in the Philippines. (Sec. 2, RR. No. 15-2015) (not allowed to register \___ for VAT purposes | [(© Sale, importation or lease of passenger or cargo vessels and| [arr inuding engine, equipment and spare pats tere! for | domestic_or_international_transport_operations; Provided, | however, that the exemption from VAT on the importation and | Yocal purchase of passenger and/or cargo. vesels shall be sibjec to the requirements on restriction on vessel mpotaton ‘nd mandatory vessel eirernent program ofthe MARINA International shi | that the said fuel, goods and supplies shall be used exclusively | or shall pertain to the transport of goods and/or passer Proved, | from a port i the Philippines directly to 2 foreign port, or vice: Phi rt | ‘ yoated orto crs ondlor| ‘cargoes bound for abroad; Provide further, tha’ i any portion Of such fuel, goods or supplies 5 used for purposes other than that mentioned in ths paragraph, such fuel, goods and supplies | | shot be subject to 1256 VAT, b (W Services of banks, non-bank financial intermediaries. pertormng aqsbankon incom, ars these ask fea! Intermedianies, such as money changers afd pawnshops, subjett to percentage tax under Secs. 121 and £22, respectively, of the nd Code; = (i) Sale oF ease of goods or properties Or the performance of sence ther than the transactions mentioned inthe prececing parearapns, | the gross annual sales and/or eecepts do not exceed the amet of | 1,919,500 (used to be Pi,500,000); | Provided, that every three (3) years. thereafter, the amount herein | Stated shall be adjusted to its present valve using the Consumer Prce Index, a5 publched by the NSO. Provided, further, Dat such | TAXATION: VAT - EXEMPT TRANSACTIONS (BATCH 37) jo 1 (@) Te transport of aassenaers by international carrer; (u) Importation of fuel goods and supplies by persons engaged in| (U) Importation of fuel, aoods and supplies by Page 3 of 6 Provided, further, That every three (3) years thereafter, the amount herein stated shall be adjusted to its present vaiue using the Consumer Price Index, as published by the Philippine StatisticsAuthonity (PSA); | ____UNDERTRAIN__ ae [Se TETRIS Uns wth 9 ony EAT ot exceding| 15,000; 1 newspaper, magazine, review or buletin which appears at regular intervals with fixed prices for subscription and sale and which ts not ‘devoted principally to the publication of paid advertisement; aircraf including engine, equipment and spare parts thereof for | domestic_or international _tansport_o _ Provided, | however, thatthe exemption fom VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject | to the requirements. on resiicton on vessel portation and | mandatory. ese! retirement program of Martime Industry | boty (MARINA) parsons engpged i ‘nlematonal shiping and_aic_transport_operations. The fuel, Goods and supplies shall be used for mteratonal shipping oF aif transport operations. Thus, sad fuel, goods and suppes shalt be Used exclusively or shal pertain to the transport of goods ands passenger from @ por in the Phippines direct to a foreign port, fr vce vers, without docking Or stopping at any other port in te Priipines uriess the docking or stopping at any other Pip port is Yor the purpose of unloading passengers and/or ca {hat originates from abroad, oF to fad passengers and/or cargoes, bound for abroad: Proved, further, that if any portion of suc feel, goods or supplies 15 used for purposes other than that ‘mentioned in this paragraph, such portion of fuel, goods and |____ Sipps shal be subject to tweie percent (12%) VAT | Services of bank, non-bank financial intermediaries | performing quas-banking functions, and other non-bank | financial intermediaries; such as money changers and | awnshops, subject to percentage tax under Secs. 121 and 122, | Fespectively, of the Tax Code {(W) Sale or lease ofgoods and services” to senior ctizens and persons with dsabilty, as provided under Republic Act Nos. 9994 (Expanded Senior Citizens Actof 2010) and 10754 (An Act Expanding the Benefts and Privileges of Persons With __Disability), respectively, {@) Transfer of property pursuant to Section 40 (C) (2) of the NIRC, mended (merger or consolidation); | oO TG) Associaton dues, membership fees,and other assessments ‘and charges collected by homeowners associations and condominium corporations; {@ Sale of gold to the Bangko Sentral ng Pilipinas (BSP), (aa) Sale of drugs and medicnes prescribed for diabetes, high cholesterol, and hypertension beginning January 1, 2019; and ‘Sale or lease of goods or properties or the performance of Services other than the transactions mentioned in the preceding paragraphs, the gross annvalsolesand/orreceptsdo otex-eed theamount of Three milion pesos (P3,000,000) Self-employed Individuals and professionals avaling of the 8% tax on gross sales andjor receipts and other non-operating income, under Sections 24(A)(2)(b) and 24(AY(2Ke)(2K) af ths ey ReSA: The Review School of Accountancy Page 4 of 6 adjustment shall be published through revenue regulations to be! ‘Code shali also be exempt from the payment of twelve percent. sued na ate than March 31 each year | 2%) var. | Foy the purpose of the threshold of P3,000,000 (used to be 7,500,000), the husband and the wife shal be corsidered separt2 P1,919,500), the husband and the wile shall be considered separate | taxpayers. However, the aggregation rule for excl taxpayer ther tran _to another domestic port | 5) Sale of electricity by generation, ssi 16) Services rendered by a beauty parlor |_2) Services rendered by a funeral parlor _____ = _=aseEEESESEEee = ') Transport of passengers and cargoes by @ domestic air or sea carriers from the Philippines to a foreign Y Sountry. aia 9) Sale peisons engaged be I cyan tins ee 4 70) Sale of raw materials or packaging materials fo expor-onentad enterprise whose export sales exceed 70% of |___ the total annual production aoe a (1) ‘Sate of power or fuel generated through reveviabie souices of eneray i

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