INPUT VAT

Sources of Creditable Input VAT

Special Sources
1. Input VAT Carryover
2. Deferred Input VAT
3. Transitional Input VAT
4. Presumptive Input VAT

Current Transactions
1. Local Purchase of Goods from VAT Sellers
2. Local Purchase of Services from VAT Sellers
3. Importation of Goods other than Capital Goods
4. Services rendered by Non-Residents

Input VAT Carryover

Excess input VAT is realized as a carryover on the succeeding period.
Previous Quarter Month 1 of Current Quarter Month 2 of Current Quarter Current Quarter

Deferred Input VAT

For Purchase of Capital Goods on or before December 31, 2021
MAAC > 1,000,000 Claim the input VAT equally between the shorter of the useful life of each asset and five years
MAAC ≤ 1,000,000 Claim the whole of the input VAT on the month of purchase

The monthly aggregate acquisition cost of a depreciable asset in any calendar month refers to the total price, excluding
the VAT, agreed upon for one or more asset acquired and not on the payments actually made during the calendar month.
An asset acquired in installment for an acquisition cost of more than P1,000,000, excluding the VAT, will be subject to
the amortization of input tax despite the fact that the monthly payments or installment may not exceed P1,000,000.

If the depreciable capital good is sold or transferred within a period of 5 years or prior to the exhaustion of the amortizable
input tax thereon, the entire unamortized input tax on the capital goods sold or transferred can be claimed as input tax
credit during the month or quarter when sale or transfer was made.

For Purchase of Capital Goods after December 31, 2021

The whole of the input VAT will be claimed on the month of purchase.

Transitional Input VAT

Scope
a. Taxpayers who became VAT registered persons upon exceeding the minimum turnover of P3,000,000 in any 12-
month period
b. Taxpayers who voluntarily register even if their turnover does not exceed P3,000,000 (except franchise grantee
of radio and/or television broadcasting whose threshold is P10,000,000)

Amount
Higher of
a. 2% of the value of the vatable beginning inventory
b. actual VAT paid
 Presumptive Input VAT
Scope
Processors and manufacturers of:
1. Sardines
2. Mackerel
3. Milk
4. Cooking oil
5. Packed Noodles
6. Refined Sugar

Amount
4% of the gross value in money of purchases of primary agricultural products which are used as input to their production

Availment of Input Tax Credit

The input tax credit on importation of goods or local purchases of goods, properties or services by a VAT-registered person
shall be creditable upon:
Import of Goods payment of VAT prior to the release of goods from custom custody
Purchase of domestic goods or properties consummation of the sale
Purchase of services or the lease or licensee payment of the compensation, rental or royalty or fee
Purchase of services in relation to a based on the progress billings
Construction in Progress
Contract for the sale of service where only the On the labor, recognized on the month the payment was made based on
labor will be supplied the progress billings
On the materials, time when the materials were purchased

Disallowance of Deductions
This relates to purchases of vehicles.
1. If the depreciable cost exceed P2,400,000:
a. No input tax
b. No depreciation expense
c. No maintenance expense
2. Only one vehicle for land transport is allowed for use of an official or employee, the value of which should not
exceed Two Million Four Hundred Thousand Pesos (P2,400,000).
3. No depreciation shall be allowed for yachts, helicopters, airplanes and/or aircrafts, and land vehicles which exceed
the above threshold amount, unless the taxpayer’s main line of business is transport operations or lease of
transportation equipment and vehicles purchased are used in said operations;
4. All maintenance expenses on account of non-depreciable vehicles for taxation purposes are disallowed in its entirely;
5. The input taxes on the purchase of non-depreciable Vehicles and all input taxes on maintenance expenses incurred
thereon are likewise disallowed for taxation purposes.

Allocation of Input VAT

Should an amount of Input VAT be unattributable to specific sales of a VAT taxpayer with mixed transactions, such shall be
allocated basing on the gross sales/receipts, with those allocated to exempt sales as non-deductible and to zero-rated sales
as either deductible, refundable or issued for TCC.
 VAT CREDITS
Sources of VAT Credits
1. Monthly VAT Credits
2. Creditable VAT Withheld
3. Advanced VAT for Sugar and Flour Industries
4. VAT paid on amended return
5. Others

Advanced VAT
Scope and Rate
Sale of refined sugar 12% of P1,400 for every 50-kg bag produced
Sale of flour 12% of 75% of 105% of the sum of:
a. Invoice value multiplied by the current exchange rate at the date of payment
b. Estimated customs duties and other charges prior to release of the imported
wheat from custom’s custody
Transport of Naturally
Grown and Planted Timber
Products

Sale of jewelry, gold and 12% of the gross selling price

other metallic minerals