VALUE ADDED TAX
(VAT)
Persons liable
Any person who in the course of his trade or
business, sells, barters, exchanges or leases
goods or properties (including transactions
deemed sale) or renders services and any
person who imports goods
In case of importation of taxable goods, the
importer whether an individual or corporation
and whether or not made in the course of his
trade or business shall be liable to VAT
VAT Liable: Goods or properties
Refer to all tangible and intangible objects which are
capable of pecuniary estimation and shall include :
1. Real properties held primarily for sale to customers or
held for lease in the ordinary course of business
2. Right or privilege to use patent, copyright, design or
model plan, secret formula or process, goodwill,
trademark, trade name, trade brand or other like
property or right
VAT Liable: Goods or properties (cont….)
3. The right or the privilege to use any industrial
commercial or scientific equipment
4. The right or the privilege to use motion picture films,
films, tapes and discs
5. Radio, television, satellite, transmission and cable
television time
VAT Liable: Sale or Exchange of Service
Refer to the performance of all kinds of services in
the Phils. for others for a fee, remuneration or
consideration whether in kind or in cash including
those performed by the ff. –
1. Construction and service contractor
2. Stock, real estate, commercial, customs and
immigration brokers
3. Lessors of property, whether personal or real
4. Persons engaged in warehousing services
VAT Liable: Sale or Exchange of Service (cont…)
5. Lessors, distributors of cinematographic films
6. Persons engaged in milling, processing,
manufacturing or repacking goods for others
7. Proprietors, operators, or keepers of hotels,
motels, rest houses, pension houses, inns,
resorts, theaters, and movie houses
8. Proprietors or operators of restaurants,
refreshment parlors, cafes and other eating
places, including clubs and caterers
9. Dealers in securities
VAT Liable: Sale or Exchange of Service (cont…)
10. Lending investors
11. Transportation contractors of goods or cargoes,
including persons who transports goods or
cargoes for hire and other domestic common
carriers by land relative to their transport
of goods and cargo
12. Common carriers by air and sea relative to their
transport of passengers, goods or cargoes from
one place in the Phil to another place in the Phil.
VAT Liable: Sale or Exchange of Service (cont…)
13. Sales of electricity by generation, transmission, and/or
distribution companies
14. Franchise grantees of electric utilities, telephone
and telegraph, radio and/or television
broadcasting and all other franchise grantees,
(except franchise grantees of radio and/or
television broadcasting whose annual gross
receipts does not exceed P10M and franchise grantees of
gas and water utilities)
VAT Liable: Sale or Exchange of Service (cont…)
15. Non-life insurance companies (except crop insurance),
including surety, fidelity, indemnity and bonding
companies
16. Other similar services
17. Lease or the use of or the right or privilege to use any
copyright, patent, design or model, plan, secret formula
or process, goodwill, trademark, trade brand, or other like
property right
18. Lease or the use of, or the right to use any industrial,
commercial or scientific equipment
19. Supply of scientific, technical industrial or
commercial knowledge or information
VAT Liable: Sale or Exchange of Service (cont…)
20.
Supply of any assistance that is ancillary and subsidiary as
a means of enabling the application and enjoyment of the
property, right, or knowledge, information as mentioned in
(18) and (19)
21.
Supply of services by a non-resident or his employee
22.
Supply of technical advice, assistance or services
23.
Lease of motion picture films, films, tapes and discs
24.
Lease or the use of, or the right to use, radio, television,
satellite, transmission and cable television time
Zero-rated sales: goods
It is a taxable transaction for VAT purposes but shall not result
in any output tax. Input tax on purchases related to such
zero-rated sales shall be available as tax credit
A. Export sales
B. Foreign currency denominated sales
C. Effectively zero-rated sales
Zero-rated sales: goods
A. EXPORT SALES
1. sale and actual shipment of goods from the Phil. to a foreign
country, paid for in acceptable foreign currency and
accounted for in accordance with BSP rules and regulations
2. sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented
enterprise to be used in the manufacturing, processing,
packing or repacking in the Phil of the said buyer’s goods,
paid for in acceptable foreign currency and accounted for in
accordance with BSP rules and regulations
Zero-rated sales: goods
3. Sale of raw materials or packaging materials to an
export-oriented enterprise whose export sales exceed
70% of total annual production
4.
Sale of gold to BSP
5.
Transactions considered as export sales under
EO 226 and other special laws
On constructive export
The following shall be considered constructively exported even
without actual exportation, pursuant to EO 226 and other
special laws:
(i) sales to bonded manufacturing warehouses of exportoriented manufacturers
(ii) sales to export processing zones pursuant to
Republic Act (RA) Nos. 7916, as amended, 7903,
7922 and other similar export processing zones
On constructive export (cont…)
(iii) sale to enterprises duly registered and accredited with
the Subic Bay Metropolitan Authority pursuant to RA7227
(iv) sales to registered export traders operating bonded trading
warehouses supplying raw materials in the manufacture of
export products under guidelines to be set by the Board
in consultation with the BIR and the BOC
(v) sales to diplomatic missions and other agencies and/or
instrumentalities granted tax immunities, of locally
manufactured, assembled or repacked products whether paid
for in foreign currency or not.
Zero-rated sales: goods
6. sale of goods, supplies, equipment and fuel to persons engaged in
international shipping or international air transport operations,
pertaining to or attributable to the transport of goods and passengers
from a port in the Philippines directly to a foreign port, or vice versa,
without docking or stopping at any other port in the Philippines
unless the docking or stopping at any other Philippine port is for
the purpose of unloading passengers and/or cargoes that
originated from abroad, or to load passengers and/or cargoes
bound for abroad
Zero-rated sales – goods (cont.)
b. Foreign currency denominated sales
c. Effectively zero-rated sales
Sale of goods or property to persons or entities who
are tax-exempt under special laws or international
agreements to which the Philippines is a signatory,
such as, ADB, IRRI, etc., shall be effectively subject
to VAT at zero-rate.
(Note: Sales to enterprises duly registered and
accredited by SBMA and with the PEZA –deleted)
Zero-rated sales (services)
1. Processing, manufacturing or repacking goods for others
doing business outside the Phil, which goods are
subsequently exported, paid for in acceptable foreign
currency and accounted for in accordance with BSP rules and
regulations
2. Services other than processing, manufacturing or repacking
rendered to persons outside the Phil, paid for in acceptable
foreign currency and accounted for in accordance with BSP
rules
Zero-rated sales (services)
3. Services rendered to persons or entities whose exemption
under special laws or int’l agreement to which the Phil. is a
signatory effectively subjects the services to 0% rate
4. Services rendered to persons engaged in int’l shipping or air
transport operations, including leases of property for use
thereof (except services of common carriers by air or sea
relative to transport of passengers, goods or cargoes from
one place in the Phil. to another place in the Phil.)
Zero-rated sales (services)
5. Services performed by subcontractors/contractors in
processing, converting or manufacturing goods for an
enterprise whose export sales exceed 70% of total annual
production
6. Transport of passenger and cargo by domestic air or sea
carriers from Phil. to foreign country
Zero-rated sales (services)
7. Sale of power or fuel generated thru renewable sources of
energy such as biomass, solar, wind, hydropower, geothermal
and steam, ocean energy and other emerging sources using
technologies such as fuel cells and hydrogen fuel (excluding
services related to the maintenance or operation of plant
generating said power
Effectively zero-rated sales
- shall refer to the local sale of goods, properties or services
by a VAT-registered person to a person or entity who was
granted indirect tax exemption under special laws or
international agreement
(Note: Provision for the required prior approval for
effectively zero rated sales – deleted pursuant to RR
4-2007)
Transactions deemed sale
Tax Base
 The Commissioner of Internal Revenue shall determine the appropriate
tax base in cases where a transaction is deemed a sale, barter or
exchange of goods or properties or where the gross selling price is
unreasonably lower (lower by more than 30%) than the actual market
value.
 If one of the parties in the transaction is the government as
defined and contemplated under the Administrative Code, the
output VAT on the transaction shall be based on the actual selling
price
Rules on invoicing and recording of
“deemed sale” transactions
• Memorandum entry in the subsidiary sales journal to record
withdrawal of goods for personal use must be made
- For distribution to shareholders and creditors –
•
invoice shall be prepared at the time of the occurrence of the
transaction recorded in the subsidiary journal
Rules on invoicing and recording of
“deemed sale” transactions
For retirement or cessation of business –
•
•
•
inventory shall be prepared and submitted to RDO not later than 30 days
from retirement
invoice shall be prepared for the entire inventory
entry in the subsidiary sales journal
Note: If business is to be continued by new owner, the entire amount of
output tax shall be allowed as input tax
Change or Cessation of Status as VAT
Registered
Subject to output tax
VAT shall apply to goods or properties originally intended for sale or use
in business and capital goods which are existing as of the occurrence of
the following:
1. Change of business activity from VAT to exempt status
2. Cancellation of registration due to reversion to exempt status
3. Cancellation of registration, of a person who voluntarily registered
despite being exempt, to revert to exempt status after the lapse of 3
years
4. Cancellation of registration of a VAT registered person who failed to
exceed P1.5 M during the 12 month period.
Change or Cessation of Status as VAT Registered (cont.)
Not subject to VAT
VAT shall not apply to goods or properties existing as of the occurrence
of the following;
1. Change of control of a corporation (acquisition of controlling interest by
another stockholder or group of stockholders.
2. Change in trade of corporate name of business
3. Merger or consolidation of corporations
Change or Cessation of Status as VAT Registered (cont.)
Rules on exchange of real property
Exchange of real estate properties held for sale or for lease,
for shares of stocks, whether resulting to corporate control or
not, is subject to VAT, subject to exceptions provided
under Section 4.106-3 hereof.
Exception:
If the transferee of the transferred real property by a real
estate dealer is another real estate dealer, in an exchange
where the transferor gains control of the transfereecorporation, no output VAT is imposable on the said
transfer.
Rules on Non-life Insurance Companies
 Non-life insurance companies including surety, fidelity, indemnity
and bonding companies are subject to VAT. They are not liable to
the payment of the premium tax under Sec. 123 of the Tax Code.
 Non-life insurance premiums are subject to VAT whereas nonlife reinsurance premiums are not subject to VAT, the latter
being already subjected to VAT upon receipt of the insurance
premiums. Insurance and reinsurance commissions, whether life
of non-life, are subject to VAT.
Rules on Gross Receipts
refers to the total amount of money or its equivalent representing the contract price,
compensation, service fee, rental or royalty, including the amount charged for
materials supplied with the services and deposits applied as payments for services
rendered and advance payments actually or constructively received during the
taxable period for the services performed or to be performed for another person,
excluding the VAT,
Exception:
amounts earmarked for payment to unrelated third (3rd ) party or received as
reimbursement for advance payment on behalf of another which do not
redound to the benefit of the payor.
Rules on Gross Receipts (cont.)
A payment is a payment to a third (3rd) party if the same is made to settle an
obligation of another person, e.g., customer or client, to the said third party,
which obligation is evidenced by the sales invoice/official receipt issued by said
third party to the obligor/debtor (e.g., customer or client of the payor of the
obligation)
Advance payment is an advance payment on behalf of another if the same is
paid to a third (3rd) party for a present or future obligation of said another party
which obligation is evidenced by a sales invoice/official receipt issued by the
obligee/creditor to the obligor/debtor (i.e., the aforementioned “another party”)
for the sale of goods or services by the former to the latter
Unrelated party shall not include taxpayer’s employees, partners, affiliates
(parent, subsidiary and other related companies), relatives by consanguinity or
affinity within the fourth (4th) civil degree, and trust fund where the taxpayer is
the trustor, trustee or beneficiary, even if covered by an agreement to the
contrary.
Value-Added Tax Rates
• February 1, 2006
12% & 0%
If any of the following conditions has been satisfied:
• VAT collection as a percentage of Gross Domestic
Product (GDP) of the previous year exceeds two and four
fifth percent (2 4/5% or 2.8%); or
• National government deficit as a percentage of GDP of
the previous year exceeded one and half percent
(1 1/2% or 1.5%).
New VAT Coverage - 12% VAT
• Sale of nonfood agricultural products; marine and forest products in
their original state by primary producer or owner of the land
• Sale of cotton and cotton seeds in their original state
Note: COPRA has been reclassified as food agricultural product and
still exempt from VAT under the amendatory Act
• Sale or importation of coal and natural gas, in whatever form or state
• Sale or importation of petroleum products, including raw materials for
their production
• Toll road operations
• PAGCOR and its licenses and franchises;
New VAT Coverage - 12% VAT
• Sale of residential lot exceeding P1.5M, residential house and
lot or other residential dwellings exceeding P2.5M
• Sale by the artist of his works of art, literary works, musical
compositions and similar creations, or his services performed for
the production of such works;
• Services rendered by doctors of medicine duly registered with
the PRC;
• Services rendered by lawyers duly registered with IBP;
• Common carriers by air and sea relative to their transport of
passengers from one place in the Philippines to another place in
the Philippines;
New VAT Coverage - 12% VAT
• Sale of electricity by generation, transmission and distribution
companies (except sale of power fuel generated through
renewable sources of energy which is 0%); and
• Sale by electric cooperatives as well as importation of
machines and equipments including spare parts.
REPEALED:
• Zero-rating of generation companies
• VAT exemption of NPC
• VAT exemption of electric cooperatives including their
importation of machineries and equipment
• 3% franchise tax on electric utilities
New VAT Coverage – Zero-Rated
• Sale of goods, supplies, equipment and fuel (including
leases of property) and services to persons engaged in
international shipping or international air transport
operations. (However, services and goods pertaining to
transport from one place in the Philippines to another
place in the Philippines is subject to 12% VAT)
• Transport of passengers and cargo by domestic air or
sea vessels from the Philippines to a foreign country.
New VAT Coverage – Zero-Rated
• Sale of power or fuel generated through renewable sources of
energy such as biomass, solar, wind hydropower, geothermal,
ocean energy, and other emerging energy sources using
technologies such as fuel cells and hydrogen fuels.
• Sale of services paid for in acceptable foreign currency and
accounted for in accordance with BSP rules provided that
services should be performed for the following:
• Persons engaged in business conducted outside the
Philippines;
• Non-resident persons not engaged in business who is
outside the Philippines when the services are performed.
Additional Exemptions
• Gross receipts from lending activities by credit or multipurpose cooperatives duly registered with Cooperative
Development Authority (Note: Previously covers lending to
members only now including lending to non-members);
• Private educational institutions accredited by DepEd,
CHED, TESDA and government educational institutions;
• Sale of vatable goods or lease of goods and properties and
performing of services with gross annual sales/receipts not
exceeding P1.5M.
Additional Exemptions
• Sale, importation or lease of passenger or cargo vessels and
aircrafts, including engine, equipment and spare parts for
domestic or international transport operations. Provided that the:
• Exemption from VAT on the importation and local purchase of
passenger and/or cargo vessels shall be limited to those of
one hundred fifty (150) tons and above, including engine and
spare parts of said vessels;
• Vessels to be imported shall comply with the age limit
requirement, as follows:
1. passenger and/or cargo vessels - 15 yrs. old
2. tankers - 10 yrs. old
3. high-speed passenger crafts - 5 yrs. old
Additional Exemptions
•
Importation of fuel, goods and supplies by persons engaged in
international shipping or air transport operations; Provided that the:
•
Fuel, goods and supplies shall be used exclusively or shall pertain to
the transport of goods and/or passenger from a port in the
Philippines directly to a foreign port without stopping at any other
port in the Philippines or vice versa without docking or stopping at
any other port in the Phil. unless the docking or stopping is for the
purpose of unloading passengers and/or cargoes that originated from
abroad, or to load passengers and/or cargoes bound for abroad.
•
Fuel, goods or supplies is used for purposes other than that
mentioned in this paragraph, such portion of fuel, goods and supplies
shall be subject to 12% VAT.
Additional Exemptions
• Importation of life-saving equipment, safety and rescue equipment
and communication and navigational safety equipment, steel
plates and other metal plates including marine-grade aluminum
plates, used for shipping transport operations
• Importation of capital equipment, machinery, spare parts, life
saving and navigational equipment, steel plates and other metal
plates including marine-grade aluminum plates to be used in the
construction repair, renovation or alteration of any merchant
marine vessel operated or to be operated in the domestic trade.
Exemptions, as amended
•
Sale of residential lot valued at P1.5 million and below, and house
and lot and other residential dwellings valued at P2.5 million and
below;
Note: Previously P1M per 1997 NIRC/P1.5M per RR 1-2005
•
Lease of residential units with a monthly rental per unit not
exceeding P10,000;
Note: Previously P8,000 per RR 1-2005
•
Sale of goods and services with gross annual sales/receipts not
exceeding P1.5M
Note: Previously P550,000 per 1997 NIRC/P750,000 per RR 12005
Specific Rules on Exempt Transactions
• Agricultural cooperatives (duly registered and in good standing with CDA)
Exempt transactions
 Sale or importation of agricultural food products in their original state
 Sale to their members
 Sale of their produce to non-members
 Importation of direct farm inputs, machineries and equipment, including spare parts
thereof, to be used directly and exclusively in the production and/or processing of their
produce
Note: Sale by agricultural cooperatives to non-members can only be exempted from
VAT if the producer of the agricultural products sold is the cooperative itself
If the cooperative is not the producer (e.g. trader) only those sales to its
members shall be exempted from VAT
Specific Rules on Exempt Transactions
• Sale of real properties
Exempt transaction
 Sale of real properties not primarily held for sale or for lease in the ordinary course of
trade or business
Exclusion:
Real properties not primarily held for sale or for lease but is used in the trade or
business of the seller (transactions incidental to the taxpayer’s main business)
Apportionment of input tax on mixed transactions
• Input tax directly attributed to VATable transactions may be recognized for
input tax credit
• Input tax directly attributable to VATable sales to government shall not be
credited against output tax from sales to non-government entities
• Claims for VAT refund/TCC with the BIR, BOI, One-Stop-Shop and Duty
Draw Back Center of DOF should be deducted from the allowable input tax
that are attributable to zero-rated sales.
• Input tax that cannot be directly attributed to either VATable or exempt
transaction shall be pro-rated and only the ratable portion can be allowed as
tax credit
• Input tax attributable to VAT exempt transaction shall not be allowed as tax
credit but should be treated as part of cost or expense
• Input tax attributable to the zero-rated sales may be refunded or applied for
tax credit certificate
Apportionment of Input Tax on Mixed Transactions
Taxable sales to private
X
Total sales
Input Tax
=
Creditable
Taxable sales to govt.
Total sales
X
Input Tax
=
Creditable
Exempt sales
Total sales
X
Input Tax
=
Expense or cost
VAT on Government Purchases
• Sale of goods and services to government is subject to 12% VAT;
• The 5% VAT withheld represents the net VAT payable of the seller
• The remaining 7% effectively accounts for the standard input tax
in lieu of the actual input VAT
• If actual input VAT exceeds 7% of gross payments, the excess
may form part of the sellers’ cost; and
• If actual input VAT is less than 7% of gross payments, the
difference must be treated as income of the seller.
• The income received from the government while subject to final
withholding on VAT shall still be reported in the VAT return
Withholding of VAT from Non-residents
Government as well as private entities shall withhold a 12%
VAT with respect to the following payments
1. Lease or use of properties or property rights owned by nonresidents
2. Services rendered to local insurance company with respect
to reinsurance premiums payable to non-residents
3. Other services rendered in the Philippines by non-residents
Rules for Unutilized Advance VAT Payments
(For Sugar and Wheat/Flour)
*In general, advance payments shall be allowed as
credit against output tax*
• Unutilized advance payments at the end of the taxable year where
advance payment was made may at the option of the taxpayer be –
 Allowed as credit against output tax
or
 Available for the issuance of TCC
-
application to be filed w/in 2 years from the date of filing the 4th
qtr VAT return
or
-
from the last day prescribed by law for filing the return
Rules for Unutilized Advance VAT Payments
(For Sugar and Wheat/Flour)
• Advance VAT payments which have been the subject of an
application for the issuance of TCC shall not be allowed as carryover nor credited against the output tax of the succeeding
quarter/year
• Issuance of TCC shall be limited to the unutilized advance VAT
payment and shall not include excess input tax
Summary
VAT
Zero-Rated
Subject to 12%
Subject to 0%
VAT (for VAT liable Local sales – 12%
transactions)
(if VAT liable,
otherwise
exempt)
Allowed to claim
input tax of 12%
on VAT
purchases of
goods & services
Allowed to
claim input tax of
12%. Option to
claim TCC on
excess input
taxes.
Effectively
Zero-Rated
Exempt
Sale to ZeroNot subject
rated entities is –
subject to 0%
Local sales – 12%
Allowed to claim
input tax of 12%
on VAT
purchases of
goods & services
Not allowed to
claim input
taxes. VAT forms
part of the asset,
cost or expense.
Persons Required to Register as VAT
NIRC
Every 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 for VAT
Mandatory
-GS/GR for any 12mo period exceeds
P550T
RA 9337
Mandatory
- GS/GR for the past 12 months
have exceeded P1,500,000
GS/GR for the next 12 months
will exceed P1,500,000
-
P750,000 per RR 12005
-
Optional
- VAT exempt person
(gross sales/receipts
do not exceed
P550,000/P750,000
Optional
-VAT exempt person (gross sales/
receipts do not exceed P1.5M)
-VAT registered person with mixed
transaction (for transaction which
would have been exempt)
-Franchise grantees of radio/TV
broadcasting where gross receipts
do not exceed P10M)
Irrevocable
for 3 years
irrevocable
Penalty for Failure to Register as VAT Taxpayer
He shall be liable to pay the tax as if he was a
VAT registered person, but he cannot avail of
the benefits of input tax credit for the period
he was not properly registered.
Persons Required to Register as Non-VAT Taxpayer
• VAT- exempt person under Sec. 109 of the Tax Code who did not opt to register as
VAT taxpayer
• Individuals engaged in business where the gross sales/receipts do not exceed
P100,000 during any 12-month period
• Non-stock, non-profit organization sand associations engaged in trade or business
whose gross sales/receipts do not exceed P1.5M in any 12-month period
• Cooperatives other than electric cooperatives
• Radio and TV broadcasting whose gross annual receipts do not exceed P10M and
which do not opt to be VAT registered
• PEZA and other ecozone registered enterprises enjoying the preferential tax rate of
5% in lieu of all taxes
• SBMA and other free pro zone-registered enterprises enjoying the preferential tax
rate of 5% in lieu of all taxes
Invoicing Requirements
A VAT-registered person shall issue:
• For every sale, barter or exchange of goods or properties
- VAT invoices
• For every sale, barter or exchange of services or lease of goods or properties
- VAT official receipts
Information needed in the VAT Invoice or VAT Official Receipt:
1. Name and business address of taxpayer who will use the invoice/official receipt;
2. TIN of taxpayer followed by the word “VAT”;
3. The amount of tax shown as a separate item;
4. Date of transaction, quantity, unit cost and description of the goods or properties
or the nature of the service;
5. Authority to Print details and serial number of booklets at the lower left corner of
receipt.
Invoicing Requirements
• The word “VAT EXEMPT SALE” written or printed
prominently if sale is VAT-exempt;
• The words “ZERO-RATED SALE” written or printed
prominently if sale is subject to zero percent
• Option to issue combined or separate invoices/receipts of
sale in a combination of VAT-liable and VAT-exempt sale. If
the sale is combined, the invoice or receipt should indicate
the break-down of the sale price between the taxable and the
exempt component and the calculation of the VAT
• For sale to VAT-registered persons amounting to P1,000 or
more, indicate the name, business style (if any), address
and TIN of the purchaser
Sample Invoice
Invoice No. 037585
ABAKA CORP.
88 East Avenue, Quezon City
VAT Reg. TIN: 115-688-025-000
June 06, 2005
Sold to
Address
TIN
: TAUWAYA Corp.
: 75 Fairview St., Brgy. Pio del Pilar, Makati City
: 215-880-000 VAT
DESCRIPTION
Spiral Notebook
100 pcs./box
Poultry productsEggs (Per Dozen)
Native Decors for
Export (100 pcs./box)
QTY
UNIT COST
TOTAL
50
P3,200
P160,000
Vatable
100
42
4,200
VAT-Exempt Sale
50
12,000
600,000
Zero-rated Sale
Vatable Sales
VAT-Exempt Sale
Zero-rated Sale
TOTAL SALES
10% VAT
TOTAL ATP AMOUNT PAYABLE
P160,000
4,200
600,000
P764,200
16,000
P780,000
TRANSACTION TYPE
Penalties for Erroneous Issuance of VAT Invoice
or VAT Official Receipt
Infraction
1. NON-VAT person who issues
a VAT invoice/official receipt
2. VAT-registered person who
issues a VAT invoice/official
receipt for a VAT-exempt sale
without the words “VATEXEMPT SALE”
Penalty
- payment of percentage tax, if
applicable
- payment of VAT (w/out input tax)
- 50% surcharge on the VAT due
- If the invoice/official receipt contains
the required information, purchaser
shall be allowed to recognize an
input tax credit
Subject to 12% VAT
Submission of SLS/SLP
Persons required to submit:
• Summary List of Sales – all VAT taxpayers with
quarterly gross sales/receipts exceeding P2.5M
• Summary List of Purchases – all VAT taxpayers
with gross purchases in excess of P1M.
Thank you!