VAT - is a tax on the value added by every seller to the purchase price or

cost in the sale or lease of goods, property or service in the ordinary course of
trade and business.

- They can be subject to other percentage tax if it’s exempted from business
taxes like subsistence or livelihood goods or service

VATABLE TRANSACTION

- Vatable sales of goods and services (actual sales, transaction deemed

sales)
- Sales to Government
- Zero-Rated Sales

VAT EXEMPT TRANSACTIONS

Vatable sale of goods and services ( Regular Sales)

- Transaction (VAT subject) actual gross sales or receipts exceed to general

threshold of 3,000,000
- Special threshold of 10,000,000
- Output (12%) , Input ( 2% transitional, 4% presumptive or 12% regular) ,
Either VAT payable or Excess Input Tax

Zero-Rated Sales

- Vatable Sales with 0% output tax with benefit of input tax credit
- Output (0%) , Input (12%) , Excess Input Tax

Sales to Government

- Vatable sales with different allowable input tax credit

- Output (12%) , Input (7% Standard) , Zero

VAT-exempt Sales

- Sales of Goods, Properties or service, and the use or lease of properties that
are not subject to VAT (Output Tax) and the seller or lessor is not allowed to
put any tax credit on VAT (Input Tax on purchase
- All Exempted

OUTPUT TAX

- VAT Due on the sale, lease or exchange of taxable goods or properties or

service
- Its a Ad valorem tax charged on the SELLING PRICE of taxable goods and
services and is payable by customer.

INPUT TAX
- VAT Due from PURCHASE of goods, properties or services, including lease
or use of property in course of his trade and business.
- IMPORTATION of goods
- Output - Input = VAT Payable , Called Tax Credit Approach

OPTIONAL REGISTRATION

Mandatory Registration

- gross sales or receipt exceed 3,000,000 for past 12 months

- reasons to believe that the gross sales or receipt will exceed 3,000,000
-They can benefit to input tax credit if they fail register they will not receive the
credit
- TV and/or radio broadcasting companies exceed 10,000,000

Optional Registration

- VAT-exempt or not required to required to register for VAT

- If the avail the VAT, they can’t canceled it for the next 3 years
- TV and/or Radio, If not exceeded 10,000,000 but if exceed then they are
automatically subject to VAT

Invoicing Requirements

- VAT invoice for every sale, barter or exchange of goods or properties

- VAT official receipt for every lease of goods or properties and every sales,
barter or exchange of goods and properties

- VAT register taxpayer may issue a single invoice/receipt involving VAT

- Non-VAT has a invoice/receipt the breakdown of what are taxable and not

SOURCES OF OUTPUT VAT

- Actual Sales (Domestic Sale)

- Transaction deemed sales
- Zero-Rated Sales (Export Sale)

SOURCES OF INPUT VAT

- Local purchases of goods and services

- Acquisition of Capital Goods
- Importation
- Presumptive Input VAT
- Transitional Input VAT
- Creditable withholding VAT

Kinds of Excise Tax

- Only specific goods like (Tobacco, fuel, and alcohol)

- Known as Tax on production, sales or consumption of commodity in a
country, including certain services
- Certain goods made or produced in the Philippines for domestic sale
- “ ” goods imported
- “ “ services performed in the Philippines
- Value added tax under Title iv of the Tax Code

Specific Tax
- Made weight and volume capacity or any physical measurement
- 34. 6864

NO. UNIT / OTHER MEASUREMENT X SPECIFIC TAX RATE

Ad Valorem Tax

- Selling price or other specified value or goods/articles.

- 20%

AD VALOREM = NO. UNITS / OTHER X SELLING PRICE OF ANY

SPECIFIC VALUE PER UNIT X AD VALOREM TAX RATE

PERSONS LIABLE TO EXCISE TAX

In General

A. Domestic or local articles

Manufacturer or producers
Owner or person having possession of articles removed from the palce of
production without the payment of the tax

B. Imported Articles
Importer
Owner
Person who is found in possession of articles which are exempt from
excise taxes other than those legally entitled to exemption

OTHERS

On indigenous petroleum, natural gas or liquefied natural gas

Local sale, Barter or Transfer
Exportation