Index for Value-Added Tax
Value-Added Tax Description
Value-Added Tax (VAT) is a form of sales 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. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.
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Who are Required to File VAT Returns?
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Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Three Million Pesos (Php3,000,000.00)
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A person required to register as VAT taxpayer but failed to register
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Any person, whether or not made in the course of his trade or business, who imports goods
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Monthly VAT Declarations
BIR Form 2550M - Monthly Value-Added Tax Declaration (February 2007 ENCS)
Documentary Requirements
- Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No. 2307), if applicable
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Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable
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Duly approved Tax Debit Memo, if applicable
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Duly approved Tax Credit Certificate, if applicable
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Authorization letter, if return is filed by authorized representative.
Procedures
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Fill-up BIR Form No. 2550M in triplicate copies (two copies for the BIR and one copy for the taxpayer).
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If there is payment:
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File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business establishment) is registered.
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Accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and payment of the tax.
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In places where there are no AAB, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue Collection Officer (RCO)
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The RCO shall issue a Revenue Official Receipt upon payment of the tax.
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If there is no payment:
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File the Monthly VAT Declaration, together with the required attachments, with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent having jurisdiction over the registered address of the taxpayer (head office of the business establishment).
Deadline
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Quarterly Value-Added Tax Return
BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)
Documentary Requirements
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Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable
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Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable
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Duly approved Tax Debit Memo, if applicable
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Duly approved Tax Credit Certificate, if applicable
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Previously filed return and proof of payment, for amended return
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Authorization letter, if return is filed by authorized representative
Procedures
Fill-up BIR Form 2550Q in triplicate copies (two copies for the BIR and one copy for the taxpayer)
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If there is payment:
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File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business establishment) is registered.
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Accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and payment of the tax.
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In places where there are no AAB, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue Collection Officer (RCO)
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The RCO shall issue a Revenue Official Receipt upon payment of the tax.
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If there is no payment:
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File the Quarterly VAT Return, together with the required attachments with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent having jurisdiction over the registered address of the taxpayer (head office of the business establishment).
Reminders:
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Only one consolidated Monthly VAT Declaration/Quarterly VAT Return shall be filed covering the results of operation of the head office as well as the branches for all lines of business subject to VAT.
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The Quarterly Summary Lists of Sales and Purchases shall be submitted in Compact Disk-Recordable (CDR) following the format provided under Section 4.114-3(g) of RR No. 16-2005, as amended by RR No. 1-2012.
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The Quarterly Summary Lists 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 the taxable quarter.
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Value-Added Tax Rates
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On sale of goods and properties - twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged
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On sale of services and use or lease of properties - twelve percent (12%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties
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On importation of goods - twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such as tax to be paid by the importer prior to the release of such goods from customs custody; provided, that where the customs duties are determined on the basis of quantity or volume of the goods, the VAT shall be based on the landed cost plus excise taxes, if any.
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On export sales and other zero-rated sales - 0%
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Related Revenue Issuances
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REVENUE REGULATIONS (RRs)
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Issuance No.
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Subject Matter
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Date of Issue
|
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RR No. 15-2018
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Amends RR No. 8-2018 particularly on the due date for the updating of registration from VAT to Non-VAT (Published in Manila Bulletin on April 7, 2018) Digest| Full Text |
April 5, 2018
|
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RR No. 13-2018
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Prescribes the Regulations implementing the Value-Added Tax (VAT) provisions under RA No. 10963 (TRAIN Law), which further amends RR No. 16-2005 (Consolidated VAT Regulations of 2005), as amended (Published in Manila Bulletin on March 19, 2018) Digest| Full Text |
March 15, 2018
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RR No. 8-2018
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Implements the amended provisions on Income Tax pursuant to RA No. 10963 (TRAIN Law)
(Published in Manila Bulletin on February 22, 2018) Digest|Full Text |
February 20, 2018
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RR No. 1-2017
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Prescribes the regulations governing applications for Value-Added Tax (VAT) credit/refund filed under Section 112 of the Tax Code, as amended, prior to the effectivity of RMC No. 54-2014
(Published in Manila Bulletin on January 20, 2017)
Digest|Full Text |
January 18, 2017
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RR No. 5-2016
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Amends Revenue Regulations No. 15-2012 by providing additional criteria in the accreditation of printers engaged in printing services of official receipts, sales invoices and other commercial receipts and/or invoices (Published in Manila Bulletin on June 2, 2016) Digest|Full Text|Annex A |
June 1, 2016
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RR No. 15-2015
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Amends Sections 4.109-1(B)(1)(s), (t) and (u) of RR No. 16-2005, as amended, relative to sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations
(Published in Manila Bulletin on December 29, 2015)
Digest|Full Text |
December 28, 2015
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RR No. 8-2015
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Amends RR No. 6-2015 on the definition of raw cane sugar for purposes of the imposition of advance business tax (Value-Added Tax or Percentage Tax) and for other related purposes
(Published in Manila Bulletin on May 28, 2015) Digest|Full Text |
May 27, 2015
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RR No. 6-2015
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Implements regulations imposing advance Business Tax (VAT or Percentage Tax) payments on sugar and for other related purposes
(Published in Manila Bulletin on April 1, 2015) Digest|Full Text |
March 31, 2015
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RR No. 5-2015
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Amends RR No. 6-2014 and imposes penalties to taxpayers mandatorily covered by eFPS or eBIRForms who failed to file tax returns under the electronic systems of the BIR
(Published in Manila Bulletin on March 19, 2015) Digest|Full Text|Annex A |
March 17, 2015
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RR No. 4-2014
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Prescribes the policies and guidelines in the monitoring of service fees of professionals
(Published in Manila Bulletin on March 21, 2014)
Digest|Full Text |
March 20, 2014
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RR No. 17-2013
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Prescribes the guidelines on the preservation of books of accounts and other accounting records
(Published in Manila Bulletin and Philippine Daily Inquirer on September 28, 2013)
Digest | Full text |
September 27, 2013
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RR No. 13-2013
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Amends Section 2 (b) of Revenue Regulations No. 13-08 relative to the definition of raw sugar for Value-Added Tax purposes
(Published in Manila Bulletin on September 24, 2013)
Digest | Full Text |
September 20, 2013
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RR No. 5-2013
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Prescribes the tax treatment of sale of jewelry, gold and other metallic minerals to a non-resident alien individual not engaged in trade or business within the Philippines or to a non-resident foreign corporation
(Published in Manila Bulletin on April 24, 2013)
Digest | Full Text |
April 22, 2013
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RR No. 1-2013
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Further expands the coverage of taxpayers required to file tax returns and pay taxes through the Electronic Filing and Payment System to include National Government Agencies mandatorily required to use the Electronic Tax Remittance Advice
(Published in Manila Bulletin on January 25, 2013)
Digest | Full Text | Annex A | Annex B |
January 23, 2013
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RR No. 15-2012
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Prescribes the regulations on the accreditation of printers as a prerequisite to the printing services of official receipts, sales invoices and other commercial receipts and/or invoices
(Published in Manila Bulletin on December 7, 2012)
Digest | Full Text | Annex A |
December 5, 2012
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RR No. 13-2012
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Prescribes the VAT treatment on sale of adjacent residential lots, house and lots or other residential dwellings, thereby amending certain provisions of RR No. 16-2005, as amended
(Published in Manila Bulletin on October 17, 2012)
Digest | Full Text |
October 12, 2012
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RR No. 6-2012
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Clarifies the taxation on the sale of gold and other metallic minerals to Bangko Sentral ng Pilipinas and other persons or entities
(Published in Manila Bulletin on April 4, 2012)
Digest | Full Text |
April 2, 2012
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RR No. 3-2012
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Prescribes the effectivity of threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale or lease of goods or properties or performance of services covered by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as amended
(Published in Manila Bulletin on February 22, 2012)
Digest | Full Text |
February 20, 2012
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RR No. 1-2012
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Requires the mandatory submission of Quarterly Summary List of Sales and Purchases by all VAT registered taxpayers
(Published in Manila Bulletin on February 22, 2012)
Digest | Full Text |
February 20, 2012
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RR No. 18-2011
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Provides the penalties for violation of the requirement that Output Tax on the sale of goods and services should be separately indicated in the sales invoice or official receipt
(Published in Manila Bulletin on November 23, 2011)
Digest | Full Text |
November 21, 2011
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RR No. 16-2011
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Increases the amount of threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale or lease of goods or properties or performance of services covered by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as amended, thereby amending certain provisions of RR No. 16-2005, as amended, otherwise known as the “Consolidated VAT Regulations of 2005”
(Published in Manila Bulletin on November 2, 2011)
Digest | Full Text |
October 28, 2011
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RR No. 10-2011
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Amends certain provision of RR No. 16-2005, as amended by RR No. 4-2007, otherwise known as the "Consolidated Value-Added Tax Regulations of 2005", as amended
(Published in Manila Bulletin on July 9, 2011)
Digest | Full Text |
July 7, 2011
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RR No. 9-2011
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Amends RR No. 3-2011 relative to the policies, guidelines and procedures on the application for change in accounting period
(Published in Manila Bulletin on July 1, 2011)
Digest | Full Text |
June 29, 2011
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RR No. 3-2011
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Provides the policies, guidelines and procedures on the application for change in accounting period
(Published in Manila Bulletin on March 9, 2011)
Digest | Full Text | Annex A | Annex B | Annex C |Annex D | Annex E | Annex F |
March 7, 2011
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RR No. 9-2009
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Promulgates the requirements for the maintenance, retention and submission of electronic records
(published in Manila Bulletin on December 31, 2009)
Digest | Full Text |
December 29, 2009
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RR No. 13-2008
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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 Purposed
(published in Philippine Star on October 7, 2008)Digest | Full Text | Annex A-B, E-J | Annex C | Annex D |
September 9,
2008
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RR No. 13-2007
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Prescribing the Rules on the Advance Payment of Value-Added Tax/Percentage Tax on the Transport of Naturally Grown Planted Timber Products (published in Philippine Daily Inquirer on December 7, 2007)
Digest | Full Text | Annex A |
December 5,
2007
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RR No. 11-2007
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Suspension of the Implementation of Revenue Regulations No. 6-2007
(published in Manila Bulletin on August 29, 2007) Digest | Full Text |
August 28,
2007
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RR No. 6-2007
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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
(published in Manila Bulletin on May 11, 2007) Digest | Full Text | Annex A-E | Annex F-J |
May 9, 2007
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RR No. 4-2007
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Amending Certain Provisions of RR No. 16-2005, As Amended, Otherwise Known as the Consolidated Value-Added Tax Regulations of 2005
(published in Manila Bulletin on March 22, 2007) Digest | Full Text |
March 20,
2007
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RR No. 2-2007
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Amending Certain Provisions of RR No. 16-2005, As Amended, Otherwise Known as the Consolidated Value-Added Tax Regulations of 2005
(published in Manila Bulletin on January 12, 2007) Digest | Full Text |
January 11,
2007
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RR No. 16-2005
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Consolidated Value-Added Tax Regulations of 2005
(published in Manila Times on October 21, 2005)
Digest | Full Text |
October 19,
2005
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RR No. 7-2004
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Implementing Sec. 109(bb) and (cc) of the National Internal Revenue Code, as Amended by RA 9238, Excluding Services Rendered by Doctors of Medicine Duly Registered with the Professional Regulatory Commission (PRC), and Services Rendered by Lawyers Duly Registered with the Integrated Bar of the Philippines (IBP) from the Coverage of Value-Added Tax
(published in Philippine Star on May 28, 2004) Digest | Full Text |
May 21, 2004
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RR No. 4-2004
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Supplementing the Rules on the Advance Payment of Value-Added Tax on Sale of Refined Sugar as Provided for in RR 2-2004
(published in Taliba on March 31, 2004) Digest | Full Text |
March 26,
2004
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RR No. 2-2004
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Further Enhancing the Rules on the Advance Payment of Value-Added Tax on Sale of Refined Sugar, Amending RR 7-89 and 29-2002
(published in Manila Standard on February 28, 2004) Digest | Full Text |
February 26,
2004
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RR No. 29-2003
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Advance Payment of VAT on the Sale of Flour
(published in Manila Times on December 2, 2003)
Digest | Full Text |
December 1,
2003
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RR No. 28-2003
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Amending Further Pertinent Provisions of RR 2-98 as Amended, Relative to the Issuance of Certificate of Value-Added Tax Withheld at Source, Thereby Amending RR 4-2002; and for the Purpose
(published in Manila Times on November 25, 2003) Digest | Full Text |
November 20,
2003
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RR No. 27-2003
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Regulations Further Amending the Transitory Provisions of RR 18-99 as Amended by RR 12-2003, Pertaining to the Deadline for the Usage of Properly Stamped Unused Non-VAT Invoices or Receipts
(published in Manila Times on October 10, 2003) Digest | Full Text |
October 9,
2003
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RR No. 5-2003
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Rules and Regulations To Implement The Remittance of the Following: (a) 70% Share of the ARMM in the Withholding Tax Payments of National Government Agencies (NGAs) and in the National Collections from Taxpayers Other Than NGAs Provided for Under Section 9, Article IX of RA 9054, Amending Therein Certain Sections of RR 4-98; (b)Allotment to the Regional Government (RG) of the 30% Share of the National Government (NG) of all Current Year Collections of Internal Revenue Taxes Within ARMM for a Period of Five (5) Years as may be Provided in the Annual Appropriations Act as Provided for Under Section 15, Article IX of RA 9054; and c) 50% of the 80% Share of the NG from the Yearly Incremental Revenue From VAT Collections Within ARMM Received by the Central Government as Provided for Under Section 15, in Relation to Section 9, both of Article IX of RA 9054 As Well As in Relation to Section 283 of the National Internal Revenue Code (NIRC) of 1997
Digest | Full Text |
February 4,
2003
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|
RR No. 29-2002
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Enhancing the Rules on the Advance Payment of Value- Added Tax on the Sale of Refined Sugar, thereby Amending RR 7-89, and Other Purposes
(published in Philippine Star on December 22, 2002) Digest | Full Text |
December 20,
2002
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|
RR No.26-2002
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Amends further RR No. 9-2001, as amended, by providing for the staggered filing of returns of taxpayers enrolled in the Electronic Filing and Payment System based on industry classification
(published in Manila Bulletin on Dec. 20, 2002)
Digest|Full Text |
December 19, 2002
|
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RR No. 8-2002
|
Amending Further Pertinent Provisions of RR 7-95, as Amended, With Respect to the Time of Filing of Quarterly VAT Returns; Contents and Submission of Quarterly Total of Monthly Sales and Purchases Per Supplier or Customer, and Providing for the Penalties and Effect of Non-Submission Thereof; and Clarifying Further the Mode of Remittance of VAT Due from Non-Residents
(published in Philippine Daily Inquirer on June 27, 2002) Digest | Full Text | Attachment 2550 (front) | Attachment 2550 (back) |
June 24,
2002
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RR No. 2-98
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Implementing Republic Act No. 8424, "An Act Amending the National Internal Revenue Code (NIRC) as Amended" relative to the Withholding on Income Subject to the Expanded Withholding Tax and Final Withholding Tax, Withholding of Income Tax on Compensation, Withholding of Creditable VAT and other Percentage Taxes
Digest |
May 17, 1998
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REVENUE MEMORANDUM ORDERS (RMOs)
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Issuance No.
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Subject Matter
|
Date of Issue
|
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RMO No. 20-2018
|
Prescribes the revised policies and procedures on the processing of Tax Credit Certificates (TCCs) for cash conversion
Full Text |
May 3, 2018
|
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RMO No. 16-2017
|
Amends certain provisions of RMO No. 5-2004 particularly on the application, processing and issuance of ATRIG on importation of wheat by millers and traders relative to the advance payment of Value-Added Tax on the sale of flour
Digest|Full Text |
July 21, 2017
|
|
RMO No. 16-2015
|
Amends RMO No. 19-2012 re: Value-Added Tax Audit Program of the Large Taxpayers Service
Digest|Full Text|Annex A
|
August 14, 2015
|
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RMO No. 16-2014
|
Reiterates and prescribes certain policies relative to the VAT Audit Program
Digest|Full Text |
April 3,
2014
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RMO No. 27-2013
|
Amends the 2012 Value-Added Tax (VAT) Audit Program
Digest | Full Text |
October 11, 2013
|
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RMO No. 5-2013
|
Prescribes the procedures and guidelines on the redemption of Notice of Payment Schedule relative to the implementation of the VAT TCC Monetization Program
Digest | Full Text |
March 21, 2013
|
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RMO No. 21-2012
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Prescribes the policies, guidelines and procedures in the acceptance, processing, evaluation, approval of applications for monetization and issuance of Notice of Payment Schedule of outstanding VAT Tax Credit Certificates solely issued by the BIR and jointly issued by the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance and the BIR
Digest | Full Text | Annex A-J | Annex K | Annex L |Annex M |
September 10, 2012
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RMO No. 20-2012
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Prescribes the policies and procedures for the implementation of the 2012 Value-Added Tax Audit Program
Digest | Full Text | Annex A | Annex B | Annex C |Annex D | Annex E |
September 5, 2012
|
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RMO No. 19-2012
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Prescribes the policies and procedures in the Value-Added Tax Audit Program for Large Taxpayers Service
Digest | Full Text | Annex A | Annex B | Annex B-1 |Annex C | Annex C-1 |
August 31, 2012
|
|
RMO No. 12-2009
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Enjoins the strict implementation of the penalty provisions for non-submission of Quarterly Summary Lists of Sales and Purchases
Digest | Full Text |
April 30, 2009
|
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RMO No. 3-2009
|
Amendment and Consolidation of the Guidelines in the Conduct of Surveillance and Stock-Taking Activities, and the Implementation of the Administrative Sanction of Suspension and Temporary Closure of Business
Digest | Full Text | Annex A | Annex B | Annex D | Annex E | Annex F | Excel File Annexes |
January 23,
2009
|
|
RMO No. 6-2008
|
Prescribing the Guidelines and Procedures in the Printing, Requisition, Reporting, Issuance and Distribution of Certificate of Advance Payment of Value-Added Tax/ Percentage Tax on the Transport of Naturally Grown and Planted Timber Products as Prescribed in RR No. 13-2007 Dated October 15, 2007
Digest | Full Text | Annex A | Annex B-F |
February 20,
2008
|
|
RMO No. 16-2007
|
Prescribing Additional Procedures in the Audit of Input Taxes Claimed in the VAT Returns by Revenue Officers and Amending "Annex B" of RMO No. 53-98 With Respect to the Checklist of Documents to be Submitted by a Taxpayer Upon Audit of his/its VAT Liabilities as well as the Mandatory Reporting Requirements to be Prepared by the Assigned Revenue Officer/s Relative Thereto, All of Which Shall Form an Integral Part of the Docket
Digest | Full Text |
July 23,
2007
|
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RMO No. 7-2006
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Prescribing the guidelines and procedures in the processing of applications for zero-rating of effectively zero-rated transactions for Value-Added Tax purposes
Digest | Full Text | Annex A | Annex B-B2 | Annex C-D |
February 28,
2006
|
|
RMO No. 26-2005
|
Suspension of issuance of assessments for deficiency Value-Added Tax against cinema/theater operators/owners
Digest | Full Text |
October 21,
2005
|
|
RMO No. 22-2004
|
Value-Added Tax (VAT) Exemption Certificate/ Identification Card Issued to qualified foreign embassies and their qualified personnel Amending/ Modifying RMO No. 81-99
Digest | Full Text |
May 24, 2004
|
|
RMO No. 5-2004
|
Prescribing the guidelines and procedures in the implementation of RR No. 29-2003 on the advance payment of Value-Added Tax on the sale of flour
Digest | Full Text | Annex A |
February 4,
2004
|
|
RMO No. 35-2002
|
Prescribing the guidelines and procedures in the processing and issuance of Authority to Release Imported Goods (ATRIG) for Excise and Value-Added Tax Purposes
Digest | Full Text | Annex A | Annex B | Annex C | Annex D | Flowchart |
December 11,
2002
|
|
RMO No. 9-2000
|
Tax treatment of sales of goods, properties and services made by VAT- registered suppliers to BOI-registered manufacturers-exporters with 100% export sales
Digest |
March 29,
2000
|
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RMO No. 81-99
|
Issuance of Value-Added Tax (VAT) Exemption Certificate to all qualified embassies and their personnel
Digest |
November 5,
1999
|
|
RMO No. 40-94
|
Prescribing the Modified Procedures on the Processing of Claims for VAT Credit/ Refund
|
|
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REVENUE MEMORANDUM CIRCULARS (RMCs)
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Issuance No.
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Subject Matter
|
Date of Issue
|
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RMC No. 17-2018
|
Amends certain provisions of RMC Nos. 89-2017 and 54-2014 on the processing of claims for issuance of Tax Refund/Tax Credit Certificate in relation to amendments made in the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law)
Digest|Full Text|Annex A.1|Annex A.1.1| Annex A.1.2-1.12|Annex A.2|Annex B|Annex C|Annex D|Annex E|Annex F |
March 8, 2018
|
|
RMC No. 89-2017
|
Amends RMC No. 51-2007 relative to the processing of claims for issuance of tax refund/Tax Credit Certificate (TCC) and the revenue officials authorized to approve and/or issue the tax refund/TCC
Digest|Full Text |
October 24, 2017
|
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RMC No. 23-2017
|
Prescribes the new template of Value-Added Tax Exemption Identification Card issued to qualified diplomats, officials and dependents of the US Embassy
Digest|Full Text|Annex A|Annex B |
March 7, 2017
|
|
RMC No. 19-2017
|
Amends Question and Answer to No. 12 of RMC No. 80-2010 regarding the issuance of Electronic Letters of Authority for Value-Added Tax credit/refund claims filed by direct exporters
Digest|Full Text |
March 2, 2017
|
|
RMC No. 82-2014
|
Publishes the full text of Joint Circular No. 002.2014 of the DOF, DBM, BOC and BIR, providing for the establishment of a mechanism for qualified VAT-registered persons to receive the cash equivalent of their outstanding VAT Tax Credit Certificates
Digest|Full Text |Joint Circular |
December 2,
2014
|
|
RMC No. 55-2014
|
Clarifies the livestock and poultry feeds or ingredients used in the manufacture of finished feeds to be exempt from VAT
Digest|Full Text |
June 27,
2014
|
|
RMC No. 54-2014
|
Clarifies the issues relative to the application for Value-Added Tax (VAT) refund/credit under Section 112 of the Tax Code, as amended
Digest|Full Text|Annex A|Annex B |
June 17,
2014
|
|
RMC No. 57-2013
|
Circularizes BIR Ruling No. 123-2013 re: recovery of unutilized creditable input taxes attributable to VAT zero-rated sales
Digest | Full Text |
August 29, 2013
|
|
RMC No. 8-2013
|
Publishes the full text of Joint Circular No. 6-2012 entitled “Joint Guidelines Implementing the Special Provision of the General Appropriations Act on Value-Added Tax (VAT) Refunds”
Digest | Full Text | Annex A |
January 25, 2013
|
|
RMC No. 5-2013
|
Publishes the full text of Joint Circular No. 5-2012 entitled "Joint Guidelines Implementing the Special Provision of the General Appropriations Act on VAT Refunds on Importation"
Digest | Full Text | Annex A |
January 18, 2013
|
|
RMC No. 75-2012
|
Clarifies Section 109(1)(R) of the National Internal Revenue Code of 1997, as amended, on the VAT exemption of the sale, importation, printing or publication of books, newspapers, magazines, reviews or bulletins
Digest | Full Text |
November 23, 2012
|
|
RMC No. 58-2012
|
Reiterates the requirement on the submission of Quarterly Value-Added Tax (VAT) Report per city/municipality
Digest | Full Text |
September 27, 2012
|
|
RMC No. 51-2012
|
Amends the deadline for the filing of Applications for Value-Added Tax (VAT) Tax Credit Certificates (TCCs) Monetization
Digest | Full Text |
September 3, 2012
|
|
RMC No. 47-2012
|
Prescribes the guidelines in the filing of application for enrollment in the Value-Added Tax (VAT) Tax Credit Certificates (TCCs) Monetization Program
Digest | Full Text | Annex A |
August 22, 2012
|
|
RMC No. 21-2012
|
Circularizes the full text of Executive Order No. 68 entitled “Monetization Program of Outstanding Value-Added Tax (VAT) Tax Credit Certificates (TCCs)”
Digest | Full Text |
May 3, 2012
|
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RMC No. 54-2011
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Circularizes the En Banc Resolution of the Supreme Court denying with finality the Motion for Reconsideration on G.R. No. 193007 upholding the validity of imposition of VAT on Toll Fees
Digest | Full Text |
November 8, 2011
|
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RMC No. 49-2011
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Further clarifies RMC No. 38-2011 on Expanded Withholding Tax obligation of Philippine Health Insurance Corporation (PHIC), including the Income Tax withholding obligation of hospitals/clinics on case rates of PHIC and the matter of 5% Final Withholding VAT for government money payments
Digest | Full Text |
October 11, 2011
|
|
RMC No. 63-2010
|
Imposes the Value-Added Tax on Tollway Operators
Digest | Full Text |
July 20, 2010
|
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RMC No. 60-2010
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Clarifies the coverage of RMO No. 56-2010 relative to the use of updated medium for submitting the Summary List of Sales and Purchases (SLSP)
Digest | Full Text |
July 13, 2010
|
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RMC No. 56-2010
|
Disseminates the most recent policies on the audit of all internal revenue tax liabilities for the year 2009
Digest | Full Text |
June 29, 2010
|
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RMC No. 39-2010
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Directs the Revenue District Offices to verify the VAT Compliance of Health Maintenance Organizations
Digest | Full Text |
May 21, 2010
|
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RMC No. 30-2010
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Clarifies Revenue Memorandum Circular No. 72-2009, which reiterated the imposition of the Value-Added Tax on Tollway Operators
Digest | Full Text |
March 26, 2010
|
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RMC No. 51-2009
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Clarifies the Requirement for the Submission of Summary Lists of Sales (SLS)/Summary Lists of Purchases (SLP); the imposition of penalties for their non-submission; the issuance of Subpoena Duces Tecum; and the imposition of penalties for failure to obey summons
Digest | Full Text |
September 16, 2009
|
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RMC No. 77-2008
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Taxability of Director’s Fees Received By Directors Who are not Employees of the Corporation for VAT or Percentage Tax Purposes as Espoused Under Revenue Memorandum Circular No. 34-2008
Digest | Full Text |
December 3,
2008
|
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RMC No. 46-2008
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Clarification of Issues Concerning Common Carriers by Air and Their Agents Relative to the Revenue and Receipt from Transport of Passengers, Goods/Cargoes and Mail, and from Excess Baggage
Digest | Full Text |
June 20,
2008
|
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RMC No. 34-2008
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Tax Treatment of Director’s Fees for Income Tax and Business Tax Purposes
Digest | Full Text |
April 18,
2008
|
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RMC No. 59-2007
|
Clarifying the Effect of Suspension of RR No. 6-2007, Otherwise Known As the "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"
Digest | Full Text |
September 14,
2007
|
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RMC No. 53-2007
|
Reiteration of the Amendment Made by RA No. 9337 Imposing VAT on the Sale of Non-Food Agricultural Products, Marine and Forest Products and on the Sale of Cotton and Cotton Seeds in their Original State
Digest | Full Text |
August 7,
2007
|
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RMC No. 39-2007
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Clarifying the Income Tax and VAT Treatment of Agency Fees/Gross Receipts of Security Agencies Including the Withholding of Taxes Due Thereon
Digest | Full Text | Annex A |
June 13,
2007
|
|
RMC No. 35-2006
|
Clarifying the Proper VAT and EWT Treatment of Freight and Other Incidental Charges Billed by Freight Forwarders
Digest | Full Text |
June 30,
2006
|
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RMC No. 31-2006
|
Value Added Tax (VAT) on the Construction or Renovation of Official Buildings or Properties of the United States of America Embassy
Digest | Full Text | Annex A |
May 30,
2006
|
|
RMC No. 30-2006
|
Prescribing the Submission of a Narrative Memorandum Report to Accompany the VAT Credit Evaluation Report and Requiring the Attachment of Certain Documents Prior to Approval of the Tax Credit Certificate (TCC) Recommended by the Tax and Revenue Group (TRG), Department of Finance One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (DOF-OSS)
Digest |Full Text |
May 22,
2006
|
|
RMC No. 22-2006
|
Clarifying certain issues relating to the implementation of the increase in the Value-Added Tax rate from 10% to 12% on the sale of goods pursuant to Republic Act No. 9337
Digest | Full Text |
April 6, 2006
|
|
RMC No. 21-2006
|
Clarification of Issues on How to Fill-up the new Version of VAT Forms (September, 2005 Version) and other Related Issues
Digest | Full Text |
April 6, 2006
|
|
RMC No. 8-2006
|
Clarifying certain issues relating to the implementation of the increase in the VAT rate from 10% to 12% pursuant to Republic Act No. 9337
Digest | Full Text |
February 1,
2006
|
|
RMC No. 5-2006
|
Prescribing the use of the Government Money Payment Chart Implementing Sections 2.57.2, 4.114 and 5.116 of Revenue Regulations No. 2-98 as amended by Revenue Regulations No. 16-2005 in relation to Sections 57 (B), 114 (C) and 116 to 123 of Republic Act No. 8424 as amended by Republic Act No. 9337
Digest | Full Text | Annex A |
January 20,
2006
|
|
RMC No. 72-2005
|
Transition procedures for all Electronic Filing and Payment System filers (Large Taxpayers/Top 10,000 Corporations) in filing tax returns affected by the new VAT Law (R.A. 9337)
Digest | Full Text |
December 22,
2005
|
|
RMC No. 68-2005
|
Enhanced VAT forms – BIR Form No. 2550M (Monthly Value-Added Tax Declaration) and BIR Form No. 2550Q (Quarterly Value-Added Tax Return) – September 2005 version
Digest | Full Text | Annex A-1 | Annex A-2 | Annex B-1 |Annex B-2 |
December 8,
2005
|
|
RMC No. 62-2005
|
Revised guidelines in the registration and invoicing requirements including clarification on common issues affecting Value-Added Tax (VAT) taxpayers Pursuant to RA No. 9337 (An Act Amending Sections 27, 28, 34, 106, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 and 288 of the National Internal Revenue Code of 1997, as Amended, and for other Purposes)
Digest | Full Text |
November 3,
2005
|
|
RMC No. 57-2005
|
Attachments to the quarterly VAT return to be filed starting October 25, 2005
Digest | Full Text |
October 20,
2005
|
|
RMC No. 52-2005
|
Value-Added Tax (VAT) Liability of the Tollway Industry
Digest | Full Text |
October 3,
2005
|
|
RMC No. 29-2005
|
Clarifying the provisions of Republic Act No. 9337 (VAT Law of 2005) applicable to the petroleum industry
Digest | Full Text |
July 1,
2005
|
|
RMC No. 70-2004
|
Clarification on proper determination of amount of Value-Added Tax on VAT invoices or VAT official receipts
Digest | Full Text |
November 23,
2004
|
|
RMC No. 60-2004
|
Clarification regarding the withholding of creditable Value-Added Tax by government offices for purchases of P1,000.00 and below
Digest | Full Text |
September 23,
2004
|
|
RMC No. 37-2004
|
Settlement of the Value-Added Tax liabilities of pawnshops for taxable years 1996 to 2002
Digest | Full Text | Annex A | Annex 1 | Annex 2 |
June 16,
2004
|
|
RMC No. 9-2004
|
Guidelines and Policies Applicable to the Business Tax Applicable to Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions and other Non-Bank Financial Intermediaries As A Result of the Enactment and Effectivity of Republic Act No. 9238, An Act Amending Certain Provisions of the National Internal Revenue Code of 1997, As Amended, byExcluding Several Services from the Coverage of the Value-Added Tax and Re-Imposing the Gross Receipts Tax on Banks and Non-Bank Financial IntermediariesPerforming Quasi-Banking Functions and Other Non-Bank Financial Intermediaries Beginning January 1, 2004
Digest | Full Text | RA No. 9238 |
February 20,
2004
|
|
RMC No. 2-2004
|
Clarifying the Issues on VAT Taxable Transactions of Philippine Ports Authority Amending Revenue Memorandum Circular No. 20-88, Pursuant to Republic Act No. 7716 as Implemented by Revenue Regulations No. 7-95
Digest | Full Text |
January 7,
2004
|
|
RMC No. 6-2003
|
Clarifying Certain Issues Relative to the Services Rendered by Individual Professional Practitioners, General Professional Partnerships, Entertainers, and Professional Athletes Who Are Subject to the Value-Added Tax or Percentage Tax, whichever is Applicable, Beginning January 1, 2003
Digest | Full Text| Annex A |
January 22,
2003
|
|
RMC No. 61-2003
|
Issuance of VAT Invoices/Receipt for Non-VAT/Exempt Sale of Goods, Properties or Services
Digest | Full Text |
October 8,
2003
|
|
RMC No. 49-2003
|
Amending Answer to Question Number 17 of Revenue Memorandum Circular No. 42-2003 and Providing Additional Guidelines on Issues Relative to the Processing of Claims for Value-Added Tax (VAT) Credit/Refund, Including Those Filed with the Tax and Revenue Group, One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS-DOF) by Direct Exporters
Digest | Full Text |
August 27,
2003
|
|
RMC No. 42-2003
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Clarifying certain issues raised relative to the processing of claims for Value-Added Tax (VAT) credit/refund, including those filed with the Tax and Revenue Group, One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS-DOF) by Direct Exporters
Digest | Full Text |
July 23,
2003
|
|
RMC No. 30-2003
|
Clarification of Paragraph 1-Q of Revenue Memorandum Circular No. 28-2003
Digest | Full Text |
May 21,
2003
|
|
RMC No. 56-2002
|
Taxability of Health Maintenance Organizations (HMOs) for VAT purposes
Digest |
December 18,
2002
|
|
RMC No. 45-2001
|
Taxability of Pawnshop Operators for VAT Purposes
|
October 12,
2001
|
|
RMC No. 28-2001
|
Taxability of Movie/Cinema House Operators for VAT Purposes
|
July 2,
2001
|
|
RMC No. 25-99
|
Disseminating the Ruling of the Commissioner of Internal Revenue on the Non-eligibility for VAT Zero-Rating of Automobile Sales to Entities Registered with PEZA, SBMA and Clark Development Authority
|
March 18,
1999
|
|
RMC No. 32-99
|
Japanese Contractors undertaking Overseas Economic Cooperation Fund of Japan (OECF) Funded Project are Exempt from the eight and one half percent (8.5%) creditable VAT imposed under Section 114(C) of the Tax Code of 1997 and to the One Percent (1%) Expanded Withholding Tax (EWT) imposed under Section 2.57.2(E) of RR No. 2-98 implementing Section 57(B) of the Tax Code of 1997
|
May 3,
1999
|
[return to index]
Codal Reference
Title IV, Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
[return to index]
FREQUENTLY ASKED QUESTIONS
I. General VAT Queries
Who are liable to register as VAT taxpayers?
Any 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 if:
-
His gross sales or receipts for the past twelve (12) months, other than those that are exempt under Section 109 (A) to (U), have exceeded Three Million Pesos (P3,000,000.00): or
-
There are reasonable grounds to believe that his gross sales or receipts for the next twelve (12) months, other than those that are exempt under Section 109 (A) to (U), will exceed Three Million Pesos (P3,000,000.00).
When is a new VAT taxpayer required to apply for registration and pay the registration fee?
New VAT taxpayers shall apply for registration as VAT Taxpayers and pay the corresponding registration fee of five hundred pesos (P500.00) using BIR Form No. 0605 for every separate or distinct establishment or place of business before the start of their business following existing issuances on registration.
Thereafter, taxpayers are required to pay the annual registration fee of five hundred pesos (P500.00) not later than January 31, every year.
What compliance activities should a VAT taxpayer, after registration as such, do promptly or periodically?
The following compliance activities must be performed by a VAT-registered taxpayer:
-
Pay the annual registration fee of P500.00 for every place of business or establishment that generates sales;
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Register the books of accounts of the business/occupation/calling, including practice of profession, before using the same;
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Register the sales invoices and official receipts as VAT-invoices or VAT official receipts for use on transactions subject to VAT. (If there are other transactions not subject to VAT, a separate set of non-VAT invoices or non-VAT official receipts need to be registered for use on transactions not subject to VAT);
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Filing of the Monthly Value-added Tax Declaration on or before the 20th day following the end of the taxable month (for manual filers)/on or before the prescribed due dates enunciated in RR No. 16-2005 (for e-filers) using BIR Form No. 2550M and of the Quarterly VAT Return on or before the 25th day following the end of the taxable quarter using BIR Form No. 2550Q, reflecting therein gross receipts (for seller of service)/ gross sales (for seller of goods) and output tax (VAT on sales); purchases of goods and services made in the course of trade or business/exercise of profession and input tax (VAT on purchases), other allowable tax credits as in the case of advance VAT payment and VAT withheld by government payors, and VAT payable or excess input VAT, whichever is applicable, with the accredited agent banks (AABs) of the BIR or Revenue Collection Officers (RCOs) of the BIR (in areas without AAB), for returns with payment, or with the RDO/LTDO having jurisdiction over the taxpayer (home RDO/LTDO), for returns without payment. (The monthly VAT Declaration and the Quarterly VAT Return shall reflect the consolidated total for all the taxable lines of activity and all the establishments - head office and branches);
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Submit with the RDO/LTDO having jurisdiction over the taxpayer, on or before the deadline set in the filing of the Quarterly VAT Return, the soft copy of the Quarterly Schedule of Monthly Sales and Output Tax (if the quarterly sales exceed P2,500,000.00), and the soft copy of the Quarterly Schedule of Monthly Domestic Purchases and Input Tax/ the soft copy of the Schedule of Transactional/Individual Importation ( if the quarterly total purchases exceed P1,000,000.00), reflecting therein the required data prescribed under existing revenue issuances.
What is the liability of a taxpayer becoming liable to VAT and did not register as such?
Any person who becomes liable to VAT and fails to register as such shall be liable to pay the output tax as if he is a VAT-registered person, but without the benefit of input tax credits for the period in which he was not properly registered.
Who may opt to register as VAT and what will be his liability?
-
Any person who is VAT-exempt under Sec. 109 of the Tax Code, as amended, may, in relation to Sec. 109 (2) of the same Code, elect to be VAT-registered by registering with the RDO that has jurisdiction over the head office of that person, and pay the annual registration fee of P500.00 for every separate and distinct establishment.
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Any person who is VAT-registered but enters into transactions which are exempt from VAT (mixed transactions) may opt that the VAT apply to his transactions which would have been exempt under Section 109 of the Tax Code, as amended.
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Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed ten million pesos (P10,000,000.00) derived from the business covered by the law granting the franchise may opt for VAT registration. This option, once exercised, shall be irrevocable. (Sec. 119, Tax Code).
-
Any person who elects to register under optional registration shall not be allowed to cancel his registration for the next three (3) years.
The above-stated taxpayers may apply for VAT registration not later than ten (10) days before the beginning of the calendar quarter and shall pay the registration fee unless they have already paid at the beginning of the year. In any case, the Commissioner of Internal Revenue may, for administrative reason deny any application for registration. Once registered as a VAT person, the taxpayer shall be liable to output tax and be entitled to input tax credit beginning on the first day of the month following registration.
What are the instances when a VAT-registered person may cancel his VAT registration?
-
If he makes a written application and can demonstrate to the commissioner's satisfaction that his gross sales or receipts for the following twelve (12) months, other than those that are exempt under Section 109 (A) to (U), will not exceed Three Million Pesos (P3,000,000.00); or
-
If he has ceased to carry on his trade or business, and does not expect to recommence any trade or business within the next twelve (12) months.
When will the cancellation for registration be effective?
The cancellation for registration will be effective from the first day of the following month the cancellation was approved.
What is the invoicing/receipt requirement of a VAT-registered person?
A VAT registered person shall issue :
-
A VAT invoice for every sale, barter or exchange of goods or properties; and
-
A VAT official receipt for every lease of goods or properties and for every sale, barter or exchange of services.
May a VAT-registered person issue a single invoice/ receipt involving VAT and Non-VAT transactions?
Yes. He may issue a single invoice/ receipt involving VAT and non-VAT transactions provided that the invoice or receipt shall clearly indicate the break-down of the sales price between its taxable, exempt and zero-rated components and the calculation of the Value-Added Tax on each portion of the sale shall be shown on the invoice or receipt.
May a VAT- registered person issue separate invoices/ receipts involving VAT and Non-VAT transactions?
Yes. A VAT registered person may issue separate invoices/ receipts for the taxable, exempt, and zero-rated component of its sales provided that if the sales is exempt from value-added tax, the term "VAT-EXEMPT SALE" shall be written or printed prominently on the invoice or receipt and if the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on the invoice or receipt.
How is the Value-Added Tax presented in the receipt/ invoice?
The amount of the tax shall be shown as a separate item in the invoice or receipt.
Sample:
| Sales Price |
P 100,000.00 |
| VAT |
12,000.00 |
| Invoice Amount |
112,000.00 |
What is the information that must be contained in the VAT invoice or VAT official receipt?
-
Name of Seller
-
Description of the goods or properties or nature of the service
-
Unit cost
-
Quantity
-
Date of transaction
-
TIN of buyer, if VAT- registered and amount exceeds P1,000.00
-
Address of Buyer
-
Business Style of Buyer
-
Name of Buyer
-
Statement that the seller is a VAT-registered person, followed by his TIN
-
Business Address of the Seller
-
Business Style of the Seller
-
Purchase price plus the VAT, provided that
- The amount of tax shall be shown as a separate item in the invoice or receipt;
- If the sale is exempt from VAT, the term "VAT-EXEMPT SALE" shall be written or printed prominently on the invoice or receipt;
- If the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on the invoice receipt; and
- If the sale involves goods, properties or services some of which are subject to and some of which are zero-rated or exempt from VAT, the invoice or receipt shall clearly indicate the breakdown of the sales price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt.
-
Authority to Print Receipt Number at the lower left corner of the invoice or receipt.
What is the liability of a VAT-registered person in the issuance of a VAT invoice/ receipt for VAT-exempt transactions?
If a VAT-registered person issues a VAT invoice or VAT official receipt for a VAT-exempt transaction but fails to display prominently on the invoice or receipt the words "VAT-EXEMPT SALE", the transaction shall become taxable and the issuer shall be liable to pay the VAT thereon. The purchaser shall be entitled to claim an input tax credit on his purchase.
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.
What is "input tax"?
Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local purchase of goods, properties or services, including lease or use of property in the course of his trade or business. It shall also include the transitional input tax determined in accordance with Section 111 of the Tax Code, presumptive input tax and deferred input tax from previous period.
Does amortization of input VAT still allowable?
Yes , but is only allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.
What will be the basis of the date of cancellation?
It is the date of issuance of tax clearance by the BIR, after full settlement of all tax liabilities relative to cessation of business or change of status of concerned taxpayer
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, among others:
-
Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business;
-
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;
-
The right or privilege to use in the Philippines of any industrial, commercial or scientific equipment;
-
The right or the privilege to use motion picture films, films, tapes and discs; and
-
Radio, television, satellite transmission and cable television time.
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, whether in kind or in cash, including those performed or rendered by the following:
-
Construction and service contractors;
-
Stock, real estate, commercial, customs and immigration brokers;
-
Lessors of property, whether personal or real;
-
Persons engaged in warehousing services;
-
Lessors or distributors of cinematographic films;
-
Persons engaged in milling, processing, manufacturing or repacking goods for others;
-
Proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts, theatres, and movie houses;
-
Proprietors or operators of restaurants, refreshment parlors, cafes, and other eating places, including clubs and caterers;
-
Dealers in securities;
-
Lending investors;
-
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 relative to their transport of goods or cargoes;
-
Common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines;
-
Sale of electricity by generating, transmission by any entity including the National Grid Corporation of the Philippines (NGCP), and distribution companies including electric cooperatives shall be subject to twelve percent (12%) VAT on their gross receipts.;
-
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 of the preceding year do not exceed Ten Million Pesos (P10,000,000.00), and franchise grantees of gas and water utilities;
-
Non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and
-
Similar services regardless of whether or not the performance thereof calls for the exercise of use of the physical or mental faculties.
The phrase "sale or exchange of services" shall likewise include:
-
The lease of 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;
-
The lease or the use of, or the right to use of any industrial, commercial or scientific equipment;
-
The supply of scientific, technical, industrial or commercial knowledge or information;
-
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;
-
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;
-
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;
-
The lease of motion picture films, films, tapes and discs; and
-
The lease or the use of or the right to use radio, television, satellite transmission and cable television time.
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. 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 in accordance with existing regulations.
What transactions are considered as zero-rated sales?
The following services performed in the Philippines by VAT-registered person shall be subject to zero percent (0%) rate:
-
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);
-
Services other than processing, manufacturing or repacking rendered to a person engaged in business conducted outside the Philippines or to a non-resident person engaged in business who is outside the Philippines when the services are performed, 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);
-
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;
-
Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use thereof; Provided, that these services shall be exclusively for international shipping or air transport operations. (Thus, the services referred to herein shall not pertain to those made to common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines, the same being subject to twelve percent (12%) VAT under Sec. 108 of the Tax Code, as amended);
-
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;
-
Transport of passengers and cargo by domestic air or sea carriers from the Philippines to a foreign country. (Gross receipts of international air carriers and international sea carriers doing business in the Philippines derived from transport of passengers and cargo from the Philippines to another country shall be exempt from VAT; however they are still liable to a percentage tax of three percent (3%) based on their gross receipts derived from transport of cargo from the Philippines to another country as provided for in Sec. 118 of the Tax Code, as amended); and
-
Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other shipping sources using technologies such as fuel cells and hydrogen fuels; Provided, however that zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power.
The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:
- Export sales
-
The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported, paid in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
-
The sale of raw materials or packaging materials to a non-resident buyer for delivery to as a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;
-
The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;
-
Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws; and
-
The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air transport operations; Provided, That the goods, supplies, equipment, and fuel shall be used exclusively for international shipping or air transport operations; Provided, that the same is limited to goods, supplies, equipment and fuel that shall be used in 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;Provided, further, that if any portion of such fuel, goods or supplies is used for purposes other than the mentioned in this paragraph, such portion of fuel, goods and supplies shall be subject to twelve percent (12%) output VAT.
- Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement
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, Asian Development Bank (ADB), International Rice Research Institute (IRRI), subject such sales to zero rate.
What are the transactions which are no longer subject to zero-percent (0%)?
-
Sale of gold to BSP
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Foreign-currency denominated sales
Upon the successful establishment and implementation of an enhanced VAT refund system by the Department of Finance (DOF), what are the transactions that will now be subject to twelve percent (12%) and no longer be subject to zero percent (0%)?
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The sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;
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The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;
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Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws
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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); and
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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.
What transactions are considered deemed sales?
The following transactions are considered as deemed sales:
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. Transfer of goods or properties not in the course of business can take place when VAT-registered person withdraws goods from his business for his personal use;
- Distribution or transfer to:
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Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned. Consigned goods returned by the consignee within the 60-day period are not deemed sold;
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Retirement from or cessation of business, with respect to all goods on hand, whether capital goods, stock-in-trade, supplies or materials as of the date of such retirement or cessation, whether or not the business is continued by the new owner or successor. The following circumstances shall, among others, give rise to transactions "deemed sale";
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Change of ownership of the business. There is a change in the ownership of the business when a single proprietorship incorporated; or the proprietor of a single proprietorship sells his entire business
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Dissolution of a partnership and creation of a new partnership which takes over the business.
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.
What are the VAT-exempt transactions?
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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 genetic materials therefore;
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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 considered as pets);
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Importation of personal and household effects belonging to residents of the Philippines returning from abroad and non-resident citizens coming to resettle in the Philippines; Provided, that such goods are exempt from custom duties under the Tariff and Customs Code of the Philippines;
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Importation of professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects ( except vehicles, vessels, aircrafts machineries and other similar goods for use in manufacture which are subject to duties, taxes and other charges) belonging to persons coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other countries, such parties hereinafter referred to as overseas Filipinos, in quantities and of the class suitable to the profession, rank or position of the persons importing said items, for their own use and not barter or sale, accompanying such persons, or arriving within a reasonable time; Provided, That the Bureau of Customs may, upon the production of satisfactorily evidence that such persons are actually coming to settle in the Philippines and that the goods are brought from their place of residence, exempt such goods from payment of duties and taxes.
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Services subject to percentage tax under Title V of the Tax Code, as amended;
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Services by agricultural contract growers and milling for others of palay into rice, corn into grits, and sugar cane into raw sugar;
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Medical, dental, hospital and veterinary services except those rendered by professionals;
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Educational services rendered by private educational institutions duly accredited by the Department of Education (DepED), the Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority (TESDA) and those rendered by the government educational institutions;
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Services rendered by individuals pursuant to an employer-employee relationship;
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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;
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Transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws except those granted under P.D. No. 529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949;
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Sales by agricultural cooperatives duly registered and in good standing with the Cooperative Development Authority (CDA) to their members, as well as 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;
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Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered and in good standing with the Cooperative Development Authority;
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Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with and in good standing with CDA; Provided, that the share capital contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00) and regardless of the aggregate capital and net surplus ratably distributed among the members;
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Export sales by persons who are not VAT-registered;
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The following sales of real properties:
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Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business.
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Sale of real properties utilized for low-cost housing as defined by RA No. 7279, otherwise known as the "Urban Development and Housing Act of 1992" and other related laws, such as RA No. 7835 and RA No. 8763;
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Sale of real properties utilized for specialized housing as defined under RA No. 7279, and other related laws, such as RA No. 7835 and RA No. 8763, wherein price ceiling per unit is Php 450,000.00 or as may from time to time be determined by the HUDCC and the NEDA and other related laws;
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Sale of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and below, or house and lot and other residential dwellings valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below, as adjusted using latest Consumer Price Index values. (If two or more adjacent lots are sold or disposed in favor of one buyer, for the purpose of utilizing the lots as one residential lot, the sale shall be exempt from VAT only if the aggregate value of the lots do not exceed One Million Five Hundred Thousand Pesos (P1,500,000.00). Adjacent residential lots, although covered by separate titles and/or separate tax declarations, when sold or disposed to one and the same buyer, whether covered by one or separate Deed of Conveyance, shall be presumed as a sale of one residential lot.)
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Lease of residential units with a monthly rental per unit not exceeding Fifteen Thousand Pesos (P15,000.00), regardless of the amount of aggregate rentals received by the lessor during the year; Provided, that not later than January 31, 2009 and every three (3) years thereafter, the amount of P10,000.00 shall be adjusted to its present value using the Consumer Price Index, as published by the Philippine Statistics Authority (Formerly known as NSO);
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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;
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Transport of passengers by international carriers;
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Sale, importation or lease of passenger or cargo vessels and aircraft, including engine equipment and spare parts thereof for domestic or international transport perations; Provided, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement program of Maritime Industry Authority (MARINA);
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Importation of fuel, goods and supplies by persons engaged in international shipping or air transport operations; Provided, that the said 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, 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 form abroad, or to load passengers and/or cargoes bound for abroad; Provided, further, that if any portion of such fuel, goods or supplies is used for purposes other that the mentioned in the paragraph, such portion of fuel, goods and supplies shall be subject to 12% VAT;
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Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, such as money changers and pawnshops, subject to percentage tax under Sections 121 and 122, respectively of the Tax Code; and
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Sale or lease of goods and services to senior citizens and persons with disabilities, as provided under Republic Act Nos. 9994 (Expanded Senior Citizens Act of 2010) and 10754 (An Act Expanding the Benefits and Privileges of Persons with Disability), respectively;
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Transfer of property in merger or consolidation (pursuant to Section 40(C)(2) of the Tax Code, as amended);
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Association dues, membership fees, and other assessments and charges collected on a purely reimbursement basis by homeowners’ associations and condominium established under Republic Act No. 9904 (Magna Carta for Homeowners and Homeowner’s Association) and Republic Act No. 4726 (The Condominium Act), respectively;
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Sale of gold to the Banko Sentral ng Pilipinasn (BSP) (previously zero-rated transaction);
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Sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension (beginning on January 1, 2019 as determined by the Department of Health); and
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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 do not exceed the amount of Three Million Pesos (Php 3,000,000.00). Note: Self-employed individuals and professionals availing of the 8% on gross sales and/or receipts and other non-operating income, under Sections 24 (A)(2)(b) and 24 (A)(2)(c)(2) of the NIRC shall also be exempt from the payment of twelve (12%) VAT.
What is the difference between a low-cost and a socialized housing?
“Low-cost housing” refers to housing projects intended for homeless low-income family beneficiaries, undertaken by the Government or private developers, which may either be a subdivision or a condominium registered and licensed by the Housing and Land Use Regulatory Board/Housing (HLURB) under BP Blg. 220, PD No. 957 or any other similar law, wherein the unit selling price is within the selling price per unit as set by the Housing and Urban Development Coordinating Council (HUDCC) pursuant to RA No. 7279 otherwise known as the “Urban Development and Housing Act of 1992” and other laws.
“Socialized housing” refers to housing programs and projects covering houses and lots or home lots only undertaken by the Government or private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberated terms on interest payments, and such other benefits in accordance with the provision or RA No. 7279, otherwise known as the “Urban Development and Housing Act of 1992” and RA No. 7835 and RA No. 8763. It shall also refer to projects intended for the underprivileged and homeless wherein the housing package selling price is within the lowest interest rates under the Unified Lending Program (UHLP) or any equivalent housing program of the Government, the private sector or non-government organizations.
II. RELIEF-Related Queries
What is "RELIEF"?
RELIEF means Reconciliation of Listing 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.
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 (P2,500,000.00) are required to submit a Summary List of Sales.
Who are required to submit Summary List of Purchases?
VAT taxpayers with quarterly total purchases (net of VAT) of goods and services, including importation exceeding One Million Pesos (P1,000,000.00) are required to submit Summary List of Purchases.
What are the Summary Lists required to be submitted?
- Quarterly Summary List of Sales to Regular Buyers/ Customers Casual Buyers/ Customers and Output Tax
- Quarterly Summary of List of Local Purchases and Input tax; and
- Quarterly Summary List of Importation.
When is the deadline for submission of the above Summary Lists?
The Summary List of Sales/Purchases, whichever is applicable, shall be submitted on or before the twenty-fifth (25th) day of the month following the close of the taxable quarter -- calendar quarter or fiscal quarter.
What are the penalties for failure to submit the Summary Lists?
- For failure to file, keep or supply a statement, list or information required on the date prescribed shall pay and administrative penalty of One Thousand Pesos (P1,000.00) for each such failure, unless it is shown that such failure is due to reasonable cause and not to willful neglect; and
- An aggregate amount to be imposed for all such failures during a taxable year shall not exceed Twenty-Five Thousand Pesos (P25,000.00).
III. What is the treatment for Withholding of VAT on Government Money Payments?
The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and/or services taxed at twelve percent (12%) VAT pursuant to Sections 106 and 108 of the Tax Code, deduct and withhold a Final VAT due at the rate of five percent (5%) of the gross payment.
The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the seller. The remaining seven percent (7%) effectively accounts for the standard input VAT for sales of goods or services to government or any of its political subdivisions, instrumentalities or agencies including GOCCs in lieu of the actual input VAT directly attributable or ratably apportioned to such sales. Should actual input VAT attributable to sales to government exceed seven percent (7%) of gross payments, the excess may form part of the sellers' expense or cost. On the other hand, if actual input VAT attributable to sale to government is less than seven percent (7%) of gross payment, the difference must be closed to expense or cost.
The government or any of its political subdivisions, instrumentalities or agencies including GOCCs, as well as private corporation, individuals, estates and trusts, whether large or non-large taxpayers, shall withhold twelve percent (12%) VAT with respect to the following payments:
Lease or use of properties or property rights owned by non-residents; and
Other services rendered in the Philippines by non-residents.
IV. In what grounds can the Commissioner of Internal Revenue suspend the business operations of a taxpayer?
The Commissioner or his authorized representative is empowered to suspend the business operations and temporarily close the business establishment of any person for any of the following violations:
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