VALUE ADDED 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
Tax Rates
• On sale of goods and properties
- 12% of the gross selling price

• On sale of services and use or lease of properties

- 12% of gross receipts derived from the sale
or exchange of services
• On importation of goods
- 12% based on the total value used by the
Bureau of Customs in determining tariff
and customs duties

• On export sales and other zero-rated sales

- 0%
Who are liable to register as VAT
taxpayers?
A person shall be liable to register if:

a. His gross sales or receipts for the past 12

months, have exceeded P1,500,000.00: or

b. There are reasonable grounds to believe that

his gross sales or receipts for the next 12
months, will exceed P1,500,000.00.
 Output tax

 These are taxes from sale of goods or

properties, services and transactions
deemed sale.
 The taxes of 12% multiply by the market
value of the goods.
 Input tax

 These are taxes imposed on purchases or

importation of goods for sale; use as
supplies in business; use as raw materials in
the sale of services
Tax Credits
 Creditable Input Tax

(1) Any input tax evidenced by a VAT

invoice or official receipt:

(a) Purchase or importation of goods:

(b) Purchase of services on which a value-
added tax has been actually paid.
(2) The input tax on domestic purchase or
importation of goods:

(a) To the purchaser upon consummation of sale

and on importation of goods or properties; and
(b) To the importer upon payment of the value-
added tax prior to the release of the goods from
the custody of the Bureau of Customs.
(3) A VAT-registered person who is also engaged
in transactions not subject to the VAT:

(a) Total input tax which can be directly attributed to

transactions subject to VAT; and
(b) A ratable portion of any input tax which cannot
be directly attributed to either activity.
Refunds or Tax Credits of Input Tax
(A) Zero-rated Sales
• 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.
(B) Cancellation of VAT Registration
A person whose registration has been cancelled
due to retirement from or cessation of
business, or due to changes in or cessation of
status within 2 years from the date of
cancellation, apply for the issuance of a tax
credit certificate for any unused input tax
which may be used in payment of his other
internal revenue taxes.
(C) Period within which Refund or Tax
Credit of Input Taxes shall be Made
• In proper cases, the Commissioner shall grant
a refund or issue the tax credit certificate for
creditable input taxes within 120 days from
the date of submission of complete
documents in support of the application filed.
• In case of full or partial denial of the claim for
tax refund or tax credit, or the failure on the
part of the Commissioner to act on the
application within the period prescribed
above, the taxpayer affected may, within 30
days from the receipt of the decision denying
the claim or after the expiration of the 120
day period, appeal the decision or the unacted
claim with the Court of Tax Appeals.
(D) Manner of Giving Refund
• Refunds shall be made upon warrants drawn
by the Commissioner or by his duly authorized
representative without the necessity of being
countersigned by the Chairman, Commission
on audit: Provided, that refunds shall be
subject to post audit by the Commission on
Audit.
Who are required to file vat returns?
• If the aggregate amount of actual gross sales
or receipts exceed 1,919,500.00.
• 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
Return and Payment of Value-Added
Tax
(A) In General.

• Every person liable to pay the VAT shall file a

quarterly return of the amount of his gross
sales or receipts within 25 days following the
close of each taxable quarter: Provided, that
VAT-registered persons shall pay the VAT on a
monthly basis.
• Any person, whose registration has been
cancelled shall file a return and pay the tax
due within 25 days from the date of
cancellation of registration: Provided, that
only one consolidated return shall be filed.
 (B) Where to File the Return and Pay
the Tax
- Except as the Commissioner otherwise
permits, the return shall be filed with and the
tax paid to an authorized agent bank, Revenue
Collection Officer or duly authorized city or
municipal Treasurer in the Philippines located
within the revenue district where the taxpayer
is registered or required to register.
Venue and Time of Payment

Modes of Payment
 MODES OF WITH WITHOUT
TAX FORM DEADLINE
PAYMENT PAYMENT PAYMENT
where the Not later than
taxpayer is the 20th day
BIR Form AAB or through
Monthly registered or following the
2550M eFPS
required to be end of each
registered month
where the
Within 25 days
taxpayer is
BIR Form No. AAB or through following the
Quarterly registered or
2550Q eFPS close of taxable
required to be
quarter
registered