TAXATION

FAR EASTERN UNIVERSITY – MANILA

COMPLIANCE REQUIREMENTS (304)

A. Invoicing Requirement, Refund of Input Taxes and Others

1. Invoicing requirement for VAT-registered taxpayers (VAT Invoice and VAT Official Receipt)
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.

2. Information contained in the VAT invoice or VAT official receipt

The following information shall be indicated in VAT invoice or VAT official receipt:
a. A statement that the seller is VAT-registered person followed by TIN.
b. The total amount to be paid with the indication that such amount includes the VAT.
1) Amount of tax shall be shown as a separate item in the invoice receipt.
2) VAT exempt sale , if the sale is exempt.
3. Zero rated sale, if the sale is subject to zero percent VAT.
4) If mixed sale, breakdown of the sales price between its taxable, exempt and zero rated components and the calculation of the VAT on
each portion. Separate invoices or receipts may be issued for each type of sales.
c. The name, business style, if any, address and TIN of the customer, in the case the sales amount to P1,000 or more.

3. Consequence of issuing an erroneous VAT invoice or VAT official receipts

a. By a Non-VAT registered person:
• If a person who is not a VAT registered person issues an invoice or receipt showing his TIN followed by the word VAT, the
Non-VAT person shall be liable to :
1) The percentage tax applicable to his transactions.
2) The VAT due on the transactions without the benefit of any tax credit and
3) 50% surcharge.

b. By a VAT registered person:

• If a VAT registered person issues a VAT invoice or official receipt for a VAT-exempt transaction but fails to display prominently on the
invoice or receipt the term “VAT Exempt Sale”, the transaction shall become taxable and the issuer shall be liable to pay the VAT thereon.

In both cases, if the invoice/receipts contain the required information, the “purchaser” shall be allowed to recognize an input tax credit
.
4. Power of the Commissioner to Suspend Business Operations
The Commissioner of Internal Revenue or his authorized representative may order suspension or closure of a business establishment for a period
of not less than 5 days for any of the following violations:
a. Failure to issue receipts or invoices;
b. Failure to file VAT return;
c. Understatement of taxable sales or receipts by 30% or more of the correct taxable sales or receipts for the taxable quarter.
d. Failure of any person to register as required under the law.

5. Mandatory Registration under the VAT System

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 Sec. 109 (1)(A) to (AA) of the Tax Code,
have exceeded P3,000,000; 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
Sec. 109 (1)(A) to (AA) of the Tax Code, will exceed P3,000,000.

6. Optional Registration of VAT-Exempt Persons

a. Any person who is VAT-exempt under Section 109 (BB) not required to register for VAT may elect to be VAT-registered by registering with
the RDO that has jurisdiction over the head office of that person, and pay the annual registration fee of P500 for every separate 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 (1) of the Tax Code;
c. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed P10,000,000
derived from the business covered by the law granting the franchise may opt for VAT registration. This option, once exercised, shall be
irrevocable.
• Once the election is made, it shall be irrevocable for a period of three (3) years counted from the quarter when the election was made except
for franchise grantees of radio and TV broadcasting whose annual gross receipts for the preceding year do not exceed ten million pesos
(P10,000,000) where the option becomes perpetually irrevocable.

7. Oplan Kandado
Is an initiative involving the strengthening of the bureau’s imposition of the prescribed administrative sanctions for non-compliance with such
essential requirements as;
a. the issuance of receipt.
b. Filing of returns,
c. declaration of taxable transactions,
d. taxpayer’s registration,
e. and paying correct amount of taxes as mandated by the norms/ standards of their particular industry or line of business.

3.4 VAT compliance requirements Page 1 of 8

B. VAT Returns and Payment of Value-Added Tax
1. Monthly VAT Declaration
a. Filing of the monthly declaration and payment of value added tax (whether large or non-large taxpayers)
Not later than 20th day following the end of the first two (2) months in a quarter. Provided, finally, that beginning January 1, 2023, the
filing and payment required shall be done with twenty-five (25) days following the close of each taxable quarter.

Deadline for Filing of a) Monthly VAT Returns (First 2 months of the Quarter)- on or before the 20th day following
Returns the end of the month, except for taxpayers enrolled with EFPS.
b) Withholding VAT return - on or before the 10th day following the end of the month.
c) Quarterly VAT (Last month of the Quarter) - on or before the 25th day following the end of
the month. (Manual or EFPS)
.
2. Taxpayers enrolled with Electronic Business Industry Period of Filing of Monthly VAT
Filing and Payment System (EFPS) Declarations
Group A: 25 days following the end of the month
Group B: 24 days following the end of the month
Group C: 23 days following the end of the month
Group D: 22 days following the end of the month
Group E: 21 days following the end of the month

GROUP A

Banking institutions

Insurance and pension funding

Non-bank financial intermediation

Activities auxiliary to financial intermediation

Water transport

Hotels and restaurant

Land transport
GROUP B

Manufacture and repair of furniture

Manufacture of basic metals

Manufacture of chemicals and chemical products

Manufacture of coke, refined petroleum and fuel products

Manufacture of electrical machinery and apparatus N.E.C

Manufacture of fabricated metal products

Manufacture of food, products, and beverages

Manufacture of machinery and equipment NEC

Manufacture of medical, precision, optical instruments

Manufacture of motor vehicles, trailers and semi-trailers

Manufacture of office, accounting and computing machinery

Manufacture of other non-metallic mineral products

Manufacture of other wearing apparel

Manufacture of radio, TV and communication equipment/apparatus

Manufacture of rubber and plastic products

Manufacture of textiles

Manufacture of wood and wood products

Manufacture NEC

Metallic Ore Mining

Non-metallic Mining and Quarrying
GROUP C

Retail sale

Wholesale Trade and Commissioner 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

Electricity, Gas, Steam and Hot water supply

Postal and telecommunications

Publishing, printing and reproduction of recorded media

Recreational, cultural and sporting activities

Recycling

Renting of Goods and Equipment

Supporting and Auxiliary Transport Activities
GROUP E

Activities of membership organization inc.

Health and social work

Private educational services

Public educational services

Research and development
3.4 VAT compliance requirements Page 2 of 8

Agricultural, Hunting and Forestry

Farming of animals

Fishing

Other service activities

Miscellaneous business activities

Unclassified

3. Filing of Quarter VAT return and Payment of VAT

a. Filing of quarter return and payment of value added tax

Within twenty five (25) days following the close of the taxable year.

b. Meaning of taxable quarter

The term “ Taxable Quarter” shall mean the quarter that is synchronized to the income tax quarter of the taxpayer (i.e. calendar quarter or fiscal
quarter).

c. Quarter return includes the amounts reflected in the monthly VAT declarations
Amounts reflected in the monthly VAT declarations for the first two (2) months of the quarter shall still be included in the quarterly VAT
return, which reflects the cumulative figures for the taxable quarter.

d. Monthly payments to be credited in the quarterly VAT return

Payments in the monthly VAT declarations shall be credited in the quarterly VAT return to arrive at the net VAT payable, or excess input
tax/overpayment as of the end of the quarter.

e. Deductions from the quarterly VAT payable/(Excess input tax)

The VAT payable/Excess Input Tax for each taxable quarter shall be reduced by the total amount of taxes previously paid for the immediately
preceding two (2) months, and the advance payments/ creditable VAT withheld by the payors for the three months of the quarter.

f. Rule in Carry-Over of Excess Input Tax

1) Excess input tax in the 1st month of the quarter can be carried over to the 2nd month.
2) Excess input tax in the 2nd month CANNOT be carried over the 3rd month (quarterly VAT).
3) Excess input tax in the 3rd month may be carried over to the::
a. 1st month of the subsequent quarter (monthly return)
b. 3rd month of the subsequent quarter (quarterly return)

4. Payment of VAT on Importation

a. The VAT on importation shall be paid by the importer prior to the release of such goods from customs custody.

Exercise:(Adapted)

Ansel Corporation had the following data for the current year are presented to you:

Output tax Input tax

April P200,000 P 160,000
May 240,000 220,000
June 160,000 240,000
July 250,000 150,000
August 90,000 50,000
September 210,000 160,000
Required:
a. Determine the VAT payable/excess input tax for the months of April. May, July and August.
b. Determine the VAT payable/excess input tax for the quarters ending June and September .
c. When are the due dates for filing the monthly VAT declarations of the months April, May, July and August?
d. When are the due dates for filing the quarterly VAT declarations of the 2nd and 3rd quarters?

C. Substituted VAT Return

1. Substituted VAT Return (Payee with Lone Payor)
a. In case of sale of goods or services by persons subject to VAT, whose gross sales or receipts have been already been subjected to VAT by the
lone payor, payee (seller) shall no longer be required to file the monthly VAT declaration and the quarterly returns
b. The Monthly Remittance Return of VAT Withheld duly filed by the withholding agent-payor serves as the substituted return of the
payee (seller) with lone payor

2. Payee with several payors

Payees with several payors are still required to file the regular VAT return reflecting the consolidated total of all taxable transactions for
the taxable period and applying as tax credits the taxes withheld by several payors

3.4 VAT compliance requirements Page 3 of 8

D. Substituted Official Receipts
1. Sellers who are exempt from issuing Official Receipts
Sellers of services whose gross receipts have been subjected to Final VAT shall be exempt from the obligation of issuing duly registered
VAT official receipts covering their receipts for services sold

E. Short Period Return

1. Final return of a person who retires from business
Any person who retires from business with due notice to the BIR office where the taxpayer (head office) is registered and whose VAT
registration has been cancelled shall file a final quarterly return and pay the tax due thereon within twenty five (25) days from the end of the
month when the business ceases to operate or when the VAT registration has been officially cancelled
2. Subsequent monthly declarations/quarterly returns to be filed after retirement
Subsequently monthly declarations/quarterly returns are still required to be filed if the results of the winding up of the affairs/business of the
taxpayer reveal taxable transactions
3. Effective date of VAT registration
All persons first registered shall be liable to VAT on the effective date of registration stated in their Certificates of Registration (i.e. the first
day of the month following their registration)
4. Initial Monthly VAT declaration or quarterly VAT return
a. If the effective date of registration falls on the first or second month of the taxable quarter, the initial monthly VAT declaration shall be filed
within twenty (20) days after the end of the month, and the initial quarterly return shall be filed on or before the 25th day after the end of the
taxable quarter
b. If the effective date of registration falls on the third month of the taxable quarter, the quarterly return shall be filed on or before the 25th day
of the month following the end of the taxable quarter, and no monthly VAT declarations need be filed for the initial quarter.

Cases: Answer

1. A VAT registered taxpayer retires from business on February 20X7 and his VAT registration is On or Before April 25
cancelled. When is the filing of the final quarterly return and payment of the VAT due thereon?

2. The effective date of registration falls on February 20X7. When is the filing of the initial monthly On or Before March 20 (Monthly)
VAT declaration and the quarterly VAT return and the payment of the VAT due thereon? On or Before April 25 (Quarterly)

3. The effective date of registration falls on March 20X7. When is the filing of the initial monthly VAT On or Before April 25
declaration and the quarterly VAT return and the payment of the VAT due thereon?

F. Payment of VAT on Importation

The VAT on importation shall be paid by the importer prior to the release of such goods from custom custody

G. Place to File and Pay VAT

1. Place to file monthly VAT declaration and quarterly VAT return if payment is involved
The monthly VAT declaration and quarterly returns shall be filed with:
a. Bank duly accredited by the Commissioner of Internal Revenue located in the revenue district office where such taxpayer (head office of the
business establishment) is required to register.
b. In the absence of accredited bank, the monthly VAT declaration and quarterly return shall be filed with and any amount due shall be paid to the
Revenue District. Officer, Collection Agent, duly authorized Treasurer of the Municipality/ City where such taxpayer (head office of the
business establishment) is required to be registered.

2. Place to file monthly VAT declaration and quarterly VAT return if no payment is involved
The monthly VAT declaration and the quarterly VAT return, where no payment is involved, shall be filed with:
a. Revenue District Officer/ Large Taxpayer District Office/ Large Taxpayer Assistance Division
b. Collection agent
c. Duly authorized Municipal/ City Treasurer of the municipality/ City where the Taxpayer (head office of the business establishment) is
registered or required to be registered

3. Only one consolidated quarterly VAT return or monthly VAT declaration covering the results of operation of the head office as well as the
branches for all lines of business subject to VAT shall be filed by the taxpayer, for every return period, with the BIR office where the taxpayer is
required to be registered

3.4 VAT compliance requirements Page 4 of 8

H. Submission of Quarterly Summary Lists of Sales/Purchases
1. Persons required to submit summary lists of sales/purchases (RR 1-2012) All Value-Added Tax (VAT) registered taxpayers:
Persons Required to Submit Summary Lists of Sales/Purchases.
a. Persons Required to Submit Summary Lists of Sales.
All persons liable for VAT such as manufacturers, wholesalers, service-providers, among others are required to submit Summary List of
Sales.
b. Persons Required to Submit Summary Lists of Purchases.
All persons liable for VAT such as manufacturers, service-providers, among others are required to file Summary List of Purchases.

2. Where to File the Summary Lists of Sales or Purchases

The quarterly summary list of all sales or purchases, whichever is applicable, shall be submitted to the RDO, LTDO, or LTAD having
jurisdiction over the taxpayer.

3. When to submit the Summary lists of sales or purchases

The quarterly summary list shall be submitted, on or before the 25th day of the month following the close of the taxable quarter (VAT quarter)
– calendar quarter or fiscal quarter

Taxpayers under the jurisdiction of the LTS, and those enrolled under EFPS, shall, through electronic filing facility submit their Summary List
of Sales/Purchases to the RDO/LTDO/LTAD, on or before the 30th day of the month following the close the taxable quarter.

4. Submission of Summary lists of Sales or Purchases in Magnetic Form

For taxpayers authorized to use computerized accounting system, the above list shall be submitted in magnetic form using Compact Disk-
Recordable (CDR)

5. Bookkeeping Requirements
a. Subsidiary sales and purchase ledgers to record daily sales and purchases.
b. Subsidiary record in ledger from for depreciable assets and capital goods.
c. Total input tax and monthly input tax claimed in VAT return.

b. Advance payment of VAT allowed as tax credit against output

The advance payments made by the seller/owner of refined sugar, importer or miller of wheat/flour ,seller/owners of naturally grown and planted
timber products and seller of jewelry, gold and other metallic minerals to NRA-NETB or NRFC shall be allowed as credit against their output tax
on the actual gross selling price of refined sugar/flour.

c. Advance payments may be available for issuance of tax credit certificate (TCC)
1. Advance payments which remain unutilized at the end of the taxpayer’s taxable year where the advance payment was made, which is
tantamount to excess payment, may, at the option of the owner/seller/taxpayer or importer/miller/taxpayer, be available for the issuance of
TCC upon application duly filed with the BIR by the seller/owner or importer/miller within two (2) years from the date of filing of the 4th
quarter VAT return of the year such advance payments were made, or if filed out of time, from the last day prescribed by law for filing the
return.
2. Advance VAT payments which have been the subject of an application for the issuance of TCC shall not be allowed as carry-over nor
credited against the output tax of the succeeding quarter/year.
3) Issuance of TCC shall be limited to the unutilized advance VAT payment and shall not include excess input tax.
4) Issuance of TCC for input tax attributable to zero-rated sales shall be covered by a separate application for TCC following the applicable
rules.

Raw Cane Sugar for Purposes of the Imposition of Advance Business Tax (Value-Added Tax or Percentage Tax) RR 8-2015

Raw Cane Sugar — the natural sugar extracted from sugarcane through simple mechanical process by pressing for the juice; boiled to
crystallize; filtered using centrifuge to separate these crystals, and dried, resulting to crystallize brown sugar (brown color due to natural
molasses content present in sugar cane): Provided, that it shall refer to raw cane sugar produced from conducting only one (1) stage of
filtering and centrifugal without any other further process applied thereto, such as but not limited to washing, bleaching, etc.: Provided
further, that its color is greater than 800 ICU and that its content of sucrose by weight in dry state corresponds to a polarimeter reading of
less than 99.5°.

The above definition includes muscovado which has standard specifications as produced, namely: Powder Class A – polarization of 86°
minimum; Powder Class B – polarization of 77° minimum; and, Lump – polarization of 57° minimum.

Thus, only those falling under the above-definition of Raw Cane Sugar, including muscovado, are exempt from VAT, or from Percentage Tax,
pursuant to Section 109 (1)(A) of the Tax Code.

Sugar Regulatory Authority represents that it collects on a biweekly basis composite samples from mills for routine quality tests. For further
verification that the products produced by mills conform to the definition contained herein, the SRA shall provide the BIR with a copy of the
results of said test showing the polarimeter and color reading of the Raw Cane Sugar produced, within 15 days from the end of the calendar
month. The SRA shall also insure that they have in place rules and regulations requiring the “RAW CANE SUGAR” be clearly placed on
quedans issued for products falling under this definition.

Sugar — refers to sugar other than Raw Cane Sugar. This includes sugar whose content of sucrose by weight, in the dry state corresponds to a
polarimeter reading of 99.5° and above and/or whose color is 800 international color units (ICU) or less.

Exempt from VAT collection raw cane sugar with the following specifications: color is greater than 800 international color units (ICU), sucrose
3.4 VAT compliance requirements Page 5 of 8
 content by weight and dry state corresponding to a polarimeter reading of less than 99.5 degrees.

Sugar Refinery/Mill refers to entity, natural or juridical, engaged in the business or milling sugar cane into raw or in the refining of raw sugar.

Sugar "Owners" as used in this Regulations may refer to persons who have legal title over the sugar and may include any of the following:
1. Sugar Planters;
2. Traders;
3. Sugar Millers;
4. The Cooperative’s;
5. The Associations.
Requirements to Pay in Advance Business Taxes, such as VAT or Percentage Tax on Sale of Sugar
In general, the business tax (VAT or Percentage Tax) on the sale of sugar, shall be paid in advance by the owner/seller before any warehouse
receipt or quedans are issued or before the sugar is withdrawn from any sugar refinery/mill.
Moreover, any person whose sales or receipts are exempt under Section 109(1)(BB) of the NIRC from the payment of VAT and who is not a
VAT-registered person shall pay an advance percentage tax equivalent to THREE PERCENT (3%) of the gross monthly sales or receipts of
sugar.

Unutilized Advance Tax Payment

The advance tax payments made by the seller/owner of Sugar which remain unutilized at the end of taxpayer's taxable year where the advance
payment was made, which is tantamount to excess payment, may, at the option of the owner/seller, be available for the issuance of TCC upon
application duly filed with the BIR by the owner/seller within two (2) years from the date of filing of the 4th quarter VAT return of the year such
advance payments were made, or if filed out of time, from the last day prescribed by law for filing the return.

Unutilized advance Tax payments which have been the subject of an application for the issuance of TCC shall not be allowed as carry-over nor
credited against the output tax/percentage tax of the succeeding month/quarter/year.

Issuance of TCC shall be limited to the unutilized advance tax payments and shall not include excess input tax. Issuance of TCC for input tax
attributable to zero-rated sales shall be covered by a separate application for TCC following applicable pertinent rules.

END

Problems

Output Tax

1. ABC Corporation sold a parcel of land used in business to XYZ Company on July 2, 2016 for P1,000,000, plus the output VAT, with a monthly
installment payment of P10,000.00, plus the output VAT. Monthly installments are paid at the end of each month. The zonal value of the subject
property at the time of sale amounted to P1,500,000.00. Compute for the output tax due on the installment payment.

2. The following data are taken from sale of a real estate dealer on January 2, 2015:
Gross selling price P10,000,000
Assessed Value 15,000,000
Zonal Value 14,200,000
Downpament(January 5,2015): 1,000,000
January 31, 2015 1,000,000
January 31, 2016 2,000,000
January 31, 2017 2,000,000

a. How much is the output tax for January 31, 2015, January 31, 2016 and January 31, 2017 using 12% VAT rate?
b. Assuming the downpayment is P2,000,000,how much is the output tax for January 31, 2015, January 31, 2016 and January 31, 2017 using 12%
VAT rate?
c. Assuming the seller is not a real estate dealer but the real property sold is used in business, how much is the output tax for January 31, 2015,
January 31, 2016 and January 31, 2017 using 12% VAT rate?
d. Assuming the seller is not a real estate dealer andthe real property sold is not used in business, how much is the output tax for January 31,
2015, January 31, 2016 and January 31, 2017 using 12% VAT rate?

3.Solano Merchandising,VAT-registered seller made the following transactions:

Local sales of goods P1,000,000

Export sale and actual shipment of of goods to U.S.A. 2,000,000
Sales of raw materials and packaging materials to a local export oriented enterprise. 3,000,000
Local sales of goods to IRRI 1,000,000
Sale of goods, supplies and equipment ti an international shipping company 1,000,000
Sale of silver to BSP 100,000
Importation of VAT-subject goods (net of VAT) 100,000

a. Identify which of the following transactions above are subject to VAT and which are exempt. If subject to VAT indicate the VAT rate.
b. Compute the output tax of the VAT-registered seller?
3.4 VAT compliance requirements Page 6 of 8
4. (Adapted) Bea Corp. imported an article fromUSA. The imported article has an invoice value of was $100,000 ($1=P50). Customs duties of
P300,000 and P200,000 excise tax were paid in connection with the importation.T he following charges were also incurred before the release of
goods by the Bureau of Customs:
Insurance P100,000
Freight 100,000
Postage 10,000
Wharfage dues 100,000
Arrastre charges 90,000
Brokerage fees 50,000
Facilitation fee 50,000

After the release from the Bureau of Customs, Bea Corp. paid P60,000( VAT exclusive) for transport of goods to its warehouse in Malabon City.
It also paid warehousing rent and securiy of P100,000, net of VAT.

a. How much was the VAT on importation using 12% rate?

b. How much is the total input tax that Bea Corporation can deduct assuming the goods were sold?

Input Tax

1. ERA Corporation has the following sales during the month:

Sale to private entities subject to 12% P100,000.00

Sale to private entities subject to 0% 100,000.00
Sale of exempt goods 100,000.00
Sale to gov’t. subjected to 5% final VAT Withholding 100,000.00
Total Sales for the month P400,000.00
The following input taxes were passed on by its VAT suppliers:
Input tax on taxable goods 12% P5,000.00
Input tax on zero-rated sales 3,000.00
Input tax on sale of exempt goods 2,000.00
Input tax on sale to government 4,000.00
Input tax on depreciable capital good not attributable to any specific activity (monthly amortization for
60 months) P20,000.00

Compute the VAT payable

2. A government agency has the following purchases for the month of January, 2017 from VAT registered suppliers of goods and/or services:

Invoice Amount
Purchase of Goods (inclusive of VAT) P1,120.00
Purchase of Services (inclusive of VAT) 5,600.00

a. Prepare the necessary journal entries for the sale made by the VAT-registered supplier of goods assuming that the goods sold has a cost of
P500 exclusive of VAT.
b. Prepare the necessary journal entries for the services made by the VAT-registered service provider assuming that the supplies in relation to the
services has a cost of P100 exclusive of VAT..
c. Prepare the necessary entries for the transactions made by the government agency.
d. How will the government agency compute for the amount due to their suppliers?
e. How will the government agency compute for the amount of withholding tax to be filed and remitted for the month of January, 2017?

3. Jack and Jill Corporation is aVAT-registered trader of bags. It has waived its privilege to claim input tax credit.It filed a notice availment of the
option to pay the tax through the withholding process. For the previous month, it sold P150,000 (net of VAT) worth of bags to a buyer in the
course of trade or business. Last month, its purchases from a VAT-registerd supplier amounted to P100,000 (VAT exclusive) worth of goods.

a. Prepare the necessary journal entries for the transactions made by the seller and the journal entries made by the buyer who buys in the course
of trade or business.
b. Prepare the necessary journal entries for the transactions made by the seller and the journal entries made by the buyer who does not buy in the
course of trade or business.
c. Compute the total withholding VAT.
d. How much is the VAT payable of the seller (payee)?

4.GJ Company, VAT regisrtered taxpayer hired an architect in USA to design a new building for his company. The architects fee is US$10,000.
(P50=1US$).net of 12% VAT.

a.How much is the VAT to be withheld by GJ Company?

b. Prepare the necessary entries in the books of GJ Company.

3.4 VAT compliance requirements Page 7 of 8

5.The following are the transactions of Mr. Tony Horsi, a non-VAT registered taxpayer whose gross sales do not exceed P1,919,500.

Purchases
May 1 From a VAT-registered person P200,000
5 From a VAT-registered person 300.000
17 From a non VAT-registered person 100,000
Sales
May 25 Goods bought on May 1 300,000

The following month He decided to register as VAT taxpayer and made the following transactions
Purchases
June 10 From a VAT-registered person P100,000
Sales
June 11 Goods bought on May 5 500,000
25 Goods bought on May 17 200,000
26 Goods bought on June 10 200.000

How much is the transitional input tax?

6. (Adapted)Bam and Trixia Merchadising, VAT-registered, has the following transactions during the month of January, 2017:

Sales, exclusive of VAT P 3,000,000

Export sales 1,000,000
Importation of goods in commercial quantity. VAT exclusive 300,000
Importation of personal effects of the owners 100,000
Purchase of office supplies, inclusive of VAT 112,000
Purchase of office equipment, total invoice price (estimated life is 2 years), exclusive of VAT 500,000
Purchase of office furniture total invoice price (estimated life is 6 years) including VAT 1,680,000
Purchase of home appliances for the residence of Bam and Trixia, gross of VAT 112,000
Payment of services for wirings of electricity lines, contractor not VAT- registered but issued VAT official
receipt (total invoice amount) 33,600
Salaries of employees 100,000
Payment of service fees of carpenters for repairing the store (no official receipt issued by the carpenters) 4,480
Purchase of real property to be used as office, VAT not included, purchase price not paid yet 500,000
Purchase of vehicle for land transport and for business use, net of VAT 3,000,000
Payment of maintenance expenses for vehicle for land transport, net of VAT 300,000
a.How much of the VAT on importation can be claimed as input tax credit?
b. How much of the input tax on purchase of office equipment and office furniture be claimed as input tax credit?
c. How much input VAT can be claimed from the purchase of vehicle for land transport?
d. How much is the total output tax?
e. How much is the total allowable input taxes for the month?
f. How much is the total VAT payable for the month?

3.4 VAT compliance requirements Page 8 of 8