Tax Form
BIR Form 2550 Q - Quarterly VAT Return
Documentary Requirements
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax At Source (SAWT), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. Duly approved Tax Compliance Certificate, if applicable
5. Previously filed return and proof of payment, for amended return
6. Authorization letter, if return is filed by authorized representative
7. Summary List of Sales (if quarterly total Sales/Receipts (net of VAT) exceeds P 2,500,000) with the following information:
a. BIR-registered name of the buyer who is engaged in business/exercise of profession;
b. Taxpayer Identification Number (TIN) of the buyer (Only for sales that are subject to VAT);
c. Exempt Sales;
d. Zero-rates Sales;
e. Sales subject to VAT (exclusive of VAT)
f. Sales subject to Final VAT Withheld; and
g. Output Tax (VAT on Sales subject to 12%)
8. Summary List of Purchases (if quarterly total purchases (net of VAT) exceeds P 1,000,000) with the following information:
a. BIR-registered name of the seller/supplier/service-provider;
b. Address of seller/supplier/service-provider;
c. Taxpayer Identification Number (TIN) of seller/supplier/service-provider
d. Exempt purchases;
e. Zero-rated purchases;
f. Purchases subject to VAT (exclusive of VAT) - on services;
g. Purchases subject to VAT (exclusive of VAT) - on capital goods;
h. Purchases subject to VAT (exclusive of VAT) - on goods other than capital goods
i. Purchases subject to Final VAT Withheld
j. Creditable Input Tax
k. Non-creditable Input Tax
NOTE: Creditable input taxes and non-creditable input taxes are to be computed not on a per supplier basis but on a per month basis.
9. The Quarterly Summary List of Importation with the following information:
a. Import Entry Declaration Number;
b. Assessment/Release Date;
c. Date of Importation;
d. Name of the Seller;
e. Country of Origin;
f. Dutiable Value;
g. All Charges Before Release from Customs Custody;
h. Landed Cost:
i. Exempt
j. Taxable (Subject to VAT)
k. VAT paid;
l. Official Receipt (OR) Number of the Official Receipt evidencing payment of tax; and
m. Date of VAT payment
Procedures
1. Fill-up BIR Form 2550 Q in triplicate copies.
2. If there is payment:
· Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 Q with the required attachments and your payment.
· In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments and your payment.
· Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no payment:
· Proceed to the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments.
· Receive your copy of the duly stamped and validated form from the RDO representative.
NOTE:
1. For taxpayers with branches, only one consolidated return shall be filed for the principal place of business or head office and all the branches.
2. The Quarterly List of Sales and Purchases shall be submitted in magnetic form using 3.5-inch floppy diskette following the format provided under Section 4.110-4 (Subsection G) of RR 8-2002.
3. The Quarterly List of Sales and Purchases shall be submitted through electronic filing facility for taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and those enrolled under the eFPS.
Deadline
Within twenty five (25) days following the close of taxable quarter of the taxpayer (for manual filing).
Within thirty (30) days following the close of taxable quarter of the taxpayer (for taxpayers under the jurisdiction of the LTS and for filing through eFPS)
· RR No. 5-87-Regulations implementing the provisions of Title IV of the Tax Code imposing VAT on importation of goods and sales and services
· RR No. 3-89 - Regulations governing the imposition of 10% VAT on deposits for returnable containers
· RR No. 5-93 - Implementing guidelines requiring the monthly payment of VAT and amending thereby Section 110 of the Tax Code
· RR No. 7-95 - Consolidated Value-Added Tax Regulations
· RR No. 5-96 - Amendment to Sections 245 of the Tax Code in relation to Revenue Regulations No. 7716 - Export Services and Importation of Meat to WTO Member VAT exempt.
· RR No. 6-97 - Implementing Republic Act. No. 2241 An Act Amending Republic Act no. 7716, otherwise known as the Expanded Value-Added Tax Law, and other pertinent provisions of the National Internal Revenue Code, as amended and further amending Revenue Regulations No. 7-95, as amended otherwise known as the Consolidated Value-Added Tax Regulations
· RR No. 13-97 - Amending further Revenue Regulations No. 7-95 as last amended by Revenue Regulations No. 6-97
· RR No. 7-99 - Amends further Revenue Regulations No. 7-95 relative to the submission of the Summary Lists of Sales and Purchases in magnetic form
· RR No. 8-99 - Provides penalties for violation of the requirement that output tax on sale of goods and services should not be separately indicated in the sales invoice or official receipt
· RR No. 18-99 - Prescribes the regulations relative to the imposition of VAT on services of banks, non-bank financial intermediaries and finance companies beginning January 1, 2000
· RR No. 19-99 - Prescribes the regulations relative to the imposition of VAT beginning January 1, 2000 on the sale of services by persons engaged in the practice of profession or calling and professional services rendered by general professional partnerships; services rendered by actors, actresses, talents, singers, and emcees; radio and television broadcasters and choreographers; musical, radio, movie, televisions and stage directors; and professional athletes
· RR No. 4-2000 - Prescribes the posting in place of business of a notice on the requirement for the issuance of sales/commercial invoices and/or official receipts by persons engaged in trade or business, including the exercise of profession
· RR No. 6-2001 - Amends pertinent provisions of certain revenue issuances relative to the inclusion of additional taxpayers to be subject to Final Withholding Tax, revision of the Withholding Tax rates on certain income payments subject to Creditable Withholding Tax, time for the filing of various tax returns and payment of the taxes due thereon and others
· RR No. 1-2003 - Implementing Sec. 5 of R.A. No. 8424, otherwise known as the Tax Reform Act of 1997, and other pertinent provisions of the NIRC of 1997, as last amended by R.A. No. 9010, imposing VAT on sale of services by persons engaged in the practice of profession or calling and professional services rendered by general professional partnerships; services rendered by actors, actresses, talents, singers and emcees; radio and television broadcasters and choreographers; musical, radio, movie, television and stage directors; and professional athletes, as well as services rendered by customs, real estate, stock, immigration and commercial brokers, beginning January 1, 2003.
· RR No. 3-2003 - Extends the deadline for registration and other compliance requirements during the transitory period of the imposition of Value-Added Tax (VAT) on sale of services by professional and brokers.
· RR No. 11-2003 - Extends further the deadline for registration and other compliance requirements during the transitory period of the imposition of Value-Added Tax (VAT) on sale of services by professionals and brokers
· RR No. 12-2003 -Amends certain provisions of RR No. 18-99 which governs the imposition of VAT on services of banks, non-bank financial intermediaries and finance companies beginning January 1, 2003
· RR No. 14-2003 - Amending Revenue Regulations No. 2-98, as amended, in order to simplify the collection of tax, through withholding at the source, on sales of goods or services subject to 3% percentage tax under Section 116 of the Code, and/or to the value-added tax (VAT) under Sections 106 and 108 of the same Code
· RMC No. 14-2003 - Waiver of penalties on professionals and brokers becoming liable to VAT or percentage tax, beginning January 1, 2003 who failed to file their VAT/ percentage tax returns for the months of January and February on the due dates specified under RR No. 1-2003, as amended by RR Nos. 3-2003 and 11-2003.
· RR No. 1-2005 – Amending further Revenue Regulations No. 7-95 as last amended by Revenue Regulation No. 8-2002. However, this regulation is not yet being implemented pending the lifting of a Temporary Restraining Order (TRO) from the Supreme Court.
· RR No. 14-2005 – Consolidated Value-Added Tax Regulations of 2005.
· RR No. 16-2005 – Consolidated Value-Added Tax Regulations of 2005.
· RR No. 4-2007 – Amending certain provisions of RR No. 16-2005, as amended, otherwise known as the Consolidated VAT Regulations of 2005.
· RR No. 6-2007 – Consolidated Regulations on Advance Value Added Tax on the Sale of Refined Sugar, Amending and/or Revoking All Revenue Issuances Issued to this Effect, and for Other Related Purposes.
· RR No. 11-2007 – Suspension of the Implementation of RR No. 6-2007.
I. General VAT Queries
II. RELIEF Related Queries
III. RELIEF Technical Queries
IV. VAT on Professionals
V. VAT on Insurance Agents
VI. Other Professional Practitioners
I. General VAT Queries
1) Where are VAT returns filed?
The Monthly VAT Declaration (BIR Form 2550M) and Quarterly VAT Return (BIR Form 2550Q) shall be filed with any Authorized Agent Bank (AAB) in the place where the taxpayer is registered or required to be registered.
In cases of no-payment, the return shall be filed with the Revenue District Office (RDO)/LTDO and LTAD where the taxpayer is registered or required to be registered.
In places where there are no AABs, it shall be filed with and the tax paid to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the place where the RDO is located.
2) What is "output tax"?
Output tax means the VAT due on the sale, lease or exchange of taxable goods or properties or services by any person registered or required to register under section 236 of the Tax Code.
3) What is "input tax"?
Input tax means the VAT paid by a VAT-registered person in the course of his trade or business on importation of goods or local purchase of goods or services, including lease or use of property, from a VAT-registered person. It shall also include the transitional input tax determined in accordance with Section 111 of the Tax Code
4) What comprises "goods or properties"?
The term "goods or properties" shall mean all tangible and intangible objects, which are capable of pecuniary estimation and shall include:
a. Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business
b. The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right
c. The right or the privilege to use in the Philippines any industrial, commercial or scientific equipment
d. The right or the privilege to use motion picture film, films, tapes and discs
e. Radio, television, satellite transmission and cable television time
5) What comprises "sale or exchange of services"?
The term "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by the following:
a. Construction and service contractors
b. Stock, real estate, commercial, customs and immigration brokers
c. Lessors of property, whether personal or real
d. Warehousing services
e. Lessors or distributors of cinematographic films
f. Persons engaged in milling, processing, manufacturing or repacking goods for others
g. Proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts
h. Proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers
i. Dealers in securities
j. Lending investors
k. Transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land, air and water relative to their transport of goods or cargoes
l. Services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of the Tax Code
m. Services of non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies
n. Similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties
The phrase "sale or exchange of services" shall include:
a. The 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 or right
b. The lease or the use of, or the right to use of any industrial, commercial or scientific equipment
c. The supply of scientific, technical, industrial or commercial knowledge or information
d. The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right or any such knowledge or information
e. The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any brand, machinery or other apparatus purchased from such non-resident person
f. The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme
g. The lease of motion picture films, films, tapes and discs
h. The lease or the use of or the right to use radio, television, satellite transmission and cable television time
6) What is a zero-rated sale?
It is a sale, barter or exchange of goods, properties and/or services subject to 0% VAT pursuant to Sections 106 (A) (2) and 108 (B) of the Tax Code.
7) What transactions are considered as zero-rated sales?
The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate:
a. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
b. Services other than those mentioned in the preceding paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
c. Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate
d. Services rendered to vessels engaged exclusively in international shipping
e. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceeds seventy percent (70%) of total annual production
The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:
a. Sale of goods which are directly shipped by a VAT-registered resident to a place outside the Philippines
b. Sale of goods which are considered as "deemed" export sales by a VAT-registered person to certain entities who are also residents of the Philippines:
· Sales to export-oriented enterprises which the Code considers as export sales at the level of the supplier of raw materials
· Sales of gold to the Bangko Sentral ng Pilipinas
· Sales considered as exportation of goods under a special law such as Executive Order No. 226 (Omnibus Investments Code of 1987) and Republic Act No. 7916 (PEZA Law)
c. Foreign currency denominated sales of goods
d. Sales to entities, the exemption of which, under a special law or an international agreement with the Government of the Philippines, effectively zero rates such sales
8) Where will taxpayers file their applications for VAT zero-rating?
Taxpayers may file their application with the Audit Information, Tax Exemption and Incentives Division (AITEID) at the BIR National Office.
9) What is a Contractor's Final Payment Release Certificate and where should taxpayers file their application for this?
The Contractor's Final Payment Release Certificate is issued by the BIR before a government contractor is fully paid for his contract with the government. Taxpayers may file their application at the BIR National Office at the Audit Information, Tax Exemption and Incentives Division (AITEID)
10) What transactions are considered as deemed sales?
The following transactions are considered as deemed sales:
a. Transfer, use or consumption, not in the course of business, of goods or properties originally intended for sale or for use in the course of business
b. Distribution or transfer to:
- Shareholders or investors as share in the profits of the VAT-registered person; or
- Creditors in payment of debt
c. Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned
d. Retirement from or cessation of business, with respect to inventories of taxable goods existing as of such retirement or cessation
11) What is VAT-exempt sale?
It is a sale of goods, properties or service and the use or lease of properties which is not subject to output tax and whereby the buyer is not allowed any tax credit or input tax related to such exempt sale.
12) What are the VAT-exempt transactions?
a. Sale of non-food agricultural, marine and forest products in their original state by the primary producer or owner of the land where the same were produced
b. Sale of cotton and cotton seeds in their original state and copra
c. Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption and breeding stock and generic materials therefor
d. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets)
e. Sale or importation of coal and natural gas, in whatever form or estate, and petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to the Excise Taxes imposed under Title VI of the Tax Code
f. Sale or importation of raw materials to be used by the buyer or importer himself in the manufacture of petroleum products subject to excise tax, except lubricating oil, processed gas, grease, wax and petrolatum
g. Importation of passenger and/or cargo vessels of more than five thousand tons, whether coastwise or ocean-going, including engine and spare parts of said vessel to be used by the importer himself as operator thereof
h. Importation of personal and household effects belonging to residents of the Philippines returning from abroad and nonresident citizens coming to resettle in the Philippines; Provided, that such goods are exempt from customs duties under the Tariff and Customs Code of the Philippines
i. Importation of professional instruments and implements, wearing apparel, domestic animals, and personal household effects (except any vehicle, vessel, aircraft, machinery, other goods for use in the manufacture and merchandise of any kind in commercial quantity) belonging to persons coming to settle in the Philippines, for their own use and not for sale, barter or exchange, accompanying such persons, or arriving within ninety (90) days before or after their arrival, upon the production of evidence satisfactory to the Commissioner of Internal Revenue, that such persons are actually coming to settle in the Philippines and that the change of residence is bona fide
j. Services subject to percentage tax under Title V of the Code
k. Services by the agricultural contract growers and milling for others of palay into rice, corn into grits, and sugar cane into raw cane sugar
l. Medical, dental, hospital and veterinary services except those rendered by professionals
m. Educational services rendered by private educational institutions, duly accredited by the Dept. of Education Culture and Sports (DECS), and Commission on Higher Education (CHED), and those rendered by the government educational institutions
n. Sale by the artist himself of his works of art, literary works, musical compositions and similar creations, or his services performed for the production of such works
o. Services rendered by individuals pursuant to an employer-employee relationship
p. Services rendered by regional or area headquarters established in the Philippines by multinational corporations which act as supervisory communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific Region and do not earn or derive income from the Philippines
q. Transactions which are exempt under international agreements to which the Philippines is a signatory, or under special laws, except those under the following laws:
- P.D. No. 66 - Export Processing Zone Authority (EPZA) registered firms
- P.D. No. 529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949
- P.D. No. 1590 - Philippine Airlines (PAL) relative to domestic transport of goods or cargoes
r. Sales by agricultural cooperatives duly registered with the Cooperative Development Authority (CDA) to their members as well as sale of their produce, whether in its original state or processed form, to non-members; their 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
s. Sales by electric cooperatives duly registered with the Cooperative Development Authority (CDA) or National Electrification Administration (NEA), relative to the generation and distribution of electricity, as well as their importation of machineries and equipment, including spare parts, which shall be directly used in the generation and distribution of electricity
t. Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered with the Cooperative Development Authority (CDA) whose lending operation is limited to their members
u. Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with the Cooperative Development Authority: Provided, that the share capital contribution of each member does not exceed Fifteen Thousand Pesos (P 15,000) and regardless of the aggregate capital and net surplus ratably distributed among the members
v. Export sales by persons who are not VAT-registered
w. Sale of real properties as follows:
i. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business;
ii. Sale of real properties utilized for low-cost housing as defined by R.A. No. 7279, otherwise known as the “Urban Development Housing Act of 1992” and other related laws, such as R.A. No. 7835 and R.A. No. 8763 wherein the price ceiling per unit is P750,000.00 or as may from time to time be determined by the Housing and Urban Development Coordinating Council (HUDCC) and the National Economic Development Authority (NEDA);
iii. Sale of real properties utilized for socialized housing as defined under R.A. No. 8763, wherein the price ceiling per unit is P225,000.00 or as may from time to time be determined by the HUDCC and the NEDA and other related laws;
iv. Sale by real estate dealers and/or lessors of house and lot and other residential dwellings valued at P1,500,000.00 and below: Provided, that not later that January 31, 2006 and each calendar year thereafter, the amount shall be adjusted to its present value using the Consumer Price Index as published by the National Statistics Office (NSO).
x. Lease of a residential unit with a monthly rental per unit not exceeding Ten Thousand Pesos (P10,000.00), regardless of the amount of aggregate rentals received by the lessor during the year: Provided, that the exemption likewise applies to lease of residential units where the monthly rental per unit exceeds P10,000.00 but the aggregate rentals of the lessor during the year do not exceed P750,000.00. Provided finally, that not later than January 31, 2006 and each calendar year thereafter, the amount of P10,000.00 shall be adjusted to its present value using the Consumer Price Index, as published by the NSO;
y. Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements
z. Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales and/or receipts does not exceed the amount of P750,000.00: Provided, that not later than January 31, 2006 and each calendar year thereafter, the amount shall be adjusted to its present value using the Consumer Price Index, as published by the NSO.
aa. Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries;
bb. Services rendered by doctors of medicine duly registered with the Professional Regulations Commission (PRC); and
cc. Services rendered by lawyers duly registered with the Integrated Bar of the Philippines (IBP).
II. RELIEF-Related Queries
1) What is 'RELIEF"?
RELIEF means Reconciliation of Listings for Enforcement. It supports the third party information program of the Bureau through the cross referencing of third party information from the taxpayers' Summary Lists of Sales and Purchases prescribed to be submitted on a quarterly basis.
2) Who are required to submit Summary List of Sales?
VAT taxpayers with quarterly total sales/receipts (net of VAT) exceeding Two Million Five Hundred Thousand Pesos (P 2,500,000) are required to submit a Summary List of Sales.
3) Who are required to submit Summary List of Purchases?
VAT taxpayers with quarterly total purchases (net of VAT) exceeding One Million Pesos (P 1,000,000) are required to submit Summary List of Purchases.
4) What are the Summary Lists required to be submitted?
a) Quarterly Summary List of Sales to Regular Buyers/Customers and Casual Buyers/Customers and Output Tax;
b) Quarterly Summary List of Local Purchases and Input tax; and
c) Quarterly S
