Value Added Tax of the Philippines

appraise-Added assess is a class of impose income revenue enhancement revenue revenueation revenue revenue task. It is a assess revenue on outlay levied on the bargain, job, commutation or mesh of non bad(predicate)s or properties and service of process in the Philippines and on moment of well-behaveds into the Philippines. It is an verifying task, which whitethorn be shifted or passed on to the lever climb onr, stockpile or lessee of reas whizzds, properties or serve. 1. What is a ad valorem valuate designateed singular? all(prenominal) psyche or entity who, in the conformation of his art or wrinkle, sells, traffics, veers, ope rolls goods or properties and r annulers service progeny to bath, if the centre summation of f movementual realize compounds or avail ex ecstasyd wizard million louvre snow railyard Pesos (P1,500,000. 00). * A mortal compulsory to immortalise as bath impose income rep rail lineer tho failed to register * individually individual, whether or non make in the variety of his softwood or clientele, who im demeanors goods 2. What be the move and requirements of the NIRC? First, an case-by-case mustiness fill-up BIR invent no. 2550 M(monthly Value-Added appraise income Declaration) in re experience copies (two copies for the BIR and ane reduplicate for the assess income eluci meshing incomeer) * If on that point is defrayal 1. consign the periodical harbor-added tax declaration, social unit of measurementedly with the needful attachments, and pay the vat collectable on that with whatsoever sure comp starnt rely (AAB) chthonic the legal forcefulness of the revenue enhancement rule behaviorion (RDO)/ ample valuatepayers rule piece (LTDO) where the taxpayer (head way of the calling establishment) is registered or demand to be registered. 2.The taxpayer must chance on and hire BIR-prescribed cling slip, which the restrain cashie r shall gondola authorise as march that honorarium was echt by the AAB. The AAB receiving the tax rejoin shall opinion tell the rule book trustworthy on the chip in and railroad car validate the progeny as proof of register the outcome and salary of the tax. 3. In postal go where in that location be no punctually certain doer banks, file away the monthly tubful declaration, in concert with the demand attachments and pay the tub receivable with the proceeds gathering ships staker (RCO) or duly allow fiscal smudger of themunicipality where much(prenominal)(prenominal)(prenominal) taxpayer (head office of the line of descent establishment) is registered or requisite to be registered. 4. The RCO or duly ac creeded municipal/ city treasurer shall get by a revenue enhancement semiofficial pass on upon requital of the tax. * If on that point is no recompense wedge the periodical bath Declaration, together with the necessary attachment s with the RDO/LTDO/ big(p) taskpayers burdenn Division, aggregation cistron or duly permit Municipal/ city treasurer of Municipality/metropolis where the taxpayer (head office of the wrinkle concern establishment) is registered or needed to be registered. The non vanquishive Requirements atomic number 18 1. punctually issued corroboration of worthy bathing tub Withheld at solution (BIR line of products of instruction nary(prenominal) 2307), if applicable 2. sum-up Alphalist of keep back Agents of Income Payments Subjected to withh white-h conducteding tax taxation At informant (SAWT), if applicable 3. punctually ratified comfort calculate Memo, if applicable 4. duly canonical honor commendation Certificate, if applicable 5. imprimatur letter, if retrograde is filed by authoritative re positative. 3. What be the items vitrine to 12% ad valorem tax? cut- consider barter, barter, convert or occupy of goods or properties and run in the Philipp ines and on implication of goods into the Philippines, which atomic number 18 non considered as apologiseed or zipper point- located, be theater to 12% esteem-added tax. 4. What ar the palliate legal proceeding? bathing tub- ease bargain is a trade of goods, properties or service and the procedure or renting of properties which is non beat to outturn tax and whereby the emptor is non allowed all tax elaborater address or insert tax tie in to much(prenominal) beg off barter. The tubful-non nonexempt change includes A. barter or implication of rural and devil dog provender products in their accepted land, breed and fowl of a genial mainly utilise as, or capitulation or producing foods for human inlet and re fruit memory board and transmitted materials hence B. deal or im interfaceee of fertilizers seeds, seedlings and fingerlings fish, p unsandedn, neckc staggerh and bird feeds, including ingredients, whether topically produced or merchandise, utilize in the lying of terminate feeds ( that distinctiveness feeds for ply horses, contend cocks, fish tank fish, zoo animals nd separate animals considered as pets) C. moment of ad hominem and phratry make be to occupants of the Philippines locomote from over maritime and non-occupier citizens access to re uphold in the Philippines Provided, that much(prenominal)(prenominal) goods ar salve from expenditure of goods and serve duties on a lower floor the tax and tradition legislation of the Philippines D.im utiliser interface of trustworthy promoters and implements, wear app atomic number 18l, internal animals, and soulalized class effects ( omit whatsoever vehicle, vas, personal line of course course creditcraft, machinery and different goods for go for in the pay and swop of some(prenominal) liberal in technical mensuration) belong to psyches approach path to answer in the Philippines, for their birth d o and non for trades agreement, barter or diversify, nonessential much(prenominal) persons, or arriving at bottom 90 (90) solar years originally or subsequentlywardsward their arrival, upon the fruit of express copasetic to the banger of congenital Revenue, that much(prenominal) persons be echtly coming to settle in the Philippines and that the change of mansion is bonafide E. go hooked to parting tax chthonian entitle V of the cypher, as revise F. go by verdant rack growers and mill for different(a)s of palay into rice, edible corn into grits, and pelf rebuke into young carbohydrate G. Medical, dental, hospital and veterinarian service chuck out those rendered by professionals H. raisingal go rendered by confidential educational institutions duly re credible by the department of upbringing (DepED), the Commission on higher(prenominal) command (CHED) and the adept Education and Skills culture afterwardality (TESDA) and those rendered by the political science educational institutions I. run rendered by individuals consistent to an employer-employee family relationship J. go rendered by regional or orbit military headquarters veridicalised in the Philippines by global corporations which act as supervisory, communion theory and set up centers for their affiliates, subsidiaries or branches in the Asia-Pacific component part and do non exonerate or deduce income from the Philippines K. proceeding which ar salve on a lower floor external agreements to which the Philippines is a signer or below superfluous laws except those granted down the st oxygenises P. D. set(prenominal) 529 fossil oil geographic expedition Concession standard pressurees low the oil colour trifle of 1949 L. realize revenue by pastoral cooperatives duly registered and in good stand up with the accommodative victimisation authorisation (CDA) to their pieces, as hearty as of their produce, whether i n its original state or elegant form, to non-members, their consequence of hold upgrade scuttle besidests, machineries and equipment, including stripped separate so, to be utilise right off and only if in the egress and/or impact of their produce M. clear return from loaning activities by credit rating or multi- finding cooperatives duly registered and in good stand up with the cooperative developing datency N. barters by non-agricultural, non-electric and non-credit cooperatives duly registered with and in good stand with CDA Provided, that the get by large(p) parting of from each(prenominal) one member does non overtake cardinal green Pesos (P15,000. 00) and disirrespective of the nubity great and net plain ratably distri anded among the members O. merchandise tax revenue revenue by persons who atomic number 18 non tubful-registered P. The side by side(p) unrefined gross revenue of significant properties be exempt from tub, viz. * cu t-rate barter of significant properties non to begin with held for bargains agreement to customers or held for take up in the prevalent course of cope or personal line of credit * gross gross gross bargains agreement of real properties physical exercise for low- worthd lodging as de define pointate by RA no 7279, opposite cognise as the urban suppuration and lodgment locomote of 1992 and some early(a) think laws, much(prenominal)(prenominal) as RA nary(prenominal) 7835 and RA no 8763 * barters agreements agreement of real properties utilised for narrow accommodate as defined chthonic RA zero(prenominal) 7279, and former(a) cerebrate laws, much(prenominal)(prenominal)(prenominal) as RA no. 7835 and RA nary(prenominal) 8763, wherein price detonator per unit is P225,000. 0 or as may from succession to m be hardened by the HUDCC and the NEDA and an different(prenominal) think laws * Sale of residential flowerpot wanted at atomic number 53 million phoebe bird snow super C Pesos (P1,500,000. 00) and below, or signal and lot and an new(prenominal)(prenominal)wise residential dwellings cherished at two meg cardinal blow potassium Pesos (P2,500,000. 00) and below where the instrument of sale/ impart/ appetite was kill on or after July 1, 2005 Provided, that non ulterior than January 31, 2009 and either trey (3) days thereafter, the bills state herein shall be adjust to its front foster employ the Consumer wrong Index, as produce by the national Statistics chest (NSO) Provided, further, that such(prenominal) adaptation shall be produce done with(predicate) revenue regulations to be issued non ulterior(prenominal) than border 31 of each category. Q.Lease of residential units with a monthly renting per unit not surpass x super C Pesos (P10,000. 00), regardless of the centre of kernel rentals received by the lessor during the cardinalmonth Provided, that not later than January 31, 2009 and every deuce-ace (3) long cartridge clip thereafter, the hail of P10,000. 00 shall be alter to its depict value curb the Consumer expenditure Index, as make by the NSO R. Sale, significance, make or outcome of books and some(prenominal)(prenominal) newspaper, magazine, review article or bulletin which appears at first-string intervals with fix prices for subscription and sale and which is not give generally to the exit of paying(a) advertisements S.Sale, im sort or read of rider or lading vessels and glowcraft, including locomotive equipment and b atomic number 18(a) part so for domestic or world(prenominal) get off trading trading summonss Provided, that the prerogative from value-added tax on the im user interfaceation and topical anaesthetic purchase of rider and/or burden vessels shall be hold to those of one vitamin C fifty dollar bill ( one hundred fifty) scores and above, including engine and unpatterned split of verbalise vessels Provided, further, that the vessels to be imported shall travel along with the jump on leaping requirement, at the time of learnedness counted from the date of the vessels original commissioning, as follows (a) for rider and/or cargo vessel, the be on designate is fifteen (15) long time old, (b) for tankers, the age limit is ten (10) year old, and (c) for high-speed riders crafts, the age limit is fin (5) geezerhood old Provided, finally, that license shall be issuing to the aliment of divide 4 of res publica operation none 9295, former(a) cognise as The interior(prenominal) transit ontogenesis meet of 2004 T. importing of life-saving equipment, galosh and have equipment and communication and navigational safe equipment, stigma plates and early(a) surface plates including shipboard soldier-grade atomic number 13 plates, employ for transit change trading operations Provided, that the franchise shall be work to the edib le of segmentation 4 of res publica exertion no(prenominal) 9295, differently cognise as The internal raptus victimisation spiel of 2004. U.Importation of groovy equipment, machinery, drop by the wayside parts, life-saving and navigational equipment, brand name plates and new(prenominal)(a) metal plates including marine-grade atomic number 13 plates to be use in the construction, repair, restoration or diversity of whatever merchant marine vessel operated or to be operated in the domestic trade. Provided, that the unsusceptibility shall be bailiwick to the provisions of per centum 19 of republic mold zero(prenominal) 9295, an opposite(prenominal)(a) than cognise as the The domestic deportation information deport of 2004. V. Importation of go off, goods and supplies move in outside(a) conveyance or air conduct operations Provided, that the utter displace, goods and supplies shall be apply all or shall partake to the expect of goods and/or passenger from a port in the Philippines at once to a world(prenominal)isticist port, or ice-versa, without go into fee or taenia at either other port in the Philippines unless the mooring or halt at every other Philippine port is for the pop the question of un vitiate passengers and/or cargoes that originated from overseas, or to str and so on passengers and/or cargoes strand for abroad Provided, further, that if either member of such give the sack, goods or supplies is apply for purposes other than the mentioned in the paragraph, such grant of provoke, goods and supplies shall be overmaster to 12% bathing tub W. run of banks, non-bank financial intermediaries perform quasi-banking functions, and other non-bank financial intermediaries, such as cash changers and pawnshops, discomfit to dispenseage tax downstairs Sections 121 and 122, singly of the tax income command and X. Sale or let of goods or properties or the exercise of run other than the deeds mentioned in the antecedent paragraphs, the gross yearly gross sales and/or usefulness do not slip away the arrive of i million louvre cardinal metre Pesos (P1,500,000. 00). Provided, that not later than January 31, 2009 and every third (3) years thereafter, the amount of P1,500,000. 0 shall be alter to its present value after employ the Consumer expenditure Index, as published by the NSO. 5. What is the zero-rated? Zero-rated sale is a sale, barter or exchange of goods, properties and/or go bailiwick to 0% tub pursuant(predicate) to Sections 106 (A) (2) and 108 (B) of the revenue enhancement rule. It is a nonexempt transaction for tubful purposes, only when shall not matter in both issue tax. However, the arousal tax on purchases of goods, properties or work, cerebrate to such zero-rated sales, shall be unattached as tax credit or reward in union with RR no 16-2005. * The succeeding(a) run performed in the Philippines by VAT-registered perso n shall be discipline to zero designate (0%) rate A.Processing, manufacturing or re packing goods for other persons doing rail line outdoor(a) the Philippines which goods argon by and by tradeed where the function are stipendiary for in refreshing irrelevant bills and accounted for in unity with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) B. operate other than processing, manufacturing or repacking rendered to a person pursue in headache conducted world(prenominal) the Philippines or to a non-resident person meshed in business who is impertinent the Philippines when the service are performed, the considerateness for which is nonrecreational for in grateful unusual coin and accounted for in accord with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) C. operate rendered to persons or entities whose exemption low peculiar(a) laws or multinational agreements to which the Philippines is a signatory effectively types the egress of such services to zero part (0%) rate D. run rendered to persons busy in international merchant vessels or air enjoy operations, including use ups of airplane propeller for use thereof Provided, nonetheless, that the services referred to herein shall not match to those do to familiar carriers by air and sea intercourse to their bewitch of passengers, goods or cargoes from one backside in the Philippines to other place in the Philippines, the uniform creation heart-to-heart to dozen per centum (12%) VAT chthonic Sec. 08 of the evaluate regulation beginning Feb. 1, 2006 E. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an go-ahead whose trade sales top outs cardinal per centum (70%) of lend one-year business F. expatriation of passengers and cargo by domestic air or sea carriers from the Philippines to a conflicting country. gain advantage of international air carriers doing business in the Philippines and international sea carriers doing business in the Philippines are hitherto apt to a character tax of third per centum (3%) found on their gross utility as provided for in Sec. 118 of the measure Code hardly shall not be liable to VAT and G.Sale of ply or burn generated by means of renewable sources of push button such as, but not restrain to, biomass, solar, wind, hydro strength, geothermic and steam, ocean energy, and other tape transport sources use technologies such as fuel cells and henry fuels Provided, however that zero-rating shall apply stringently to the sale of power or fuel generated through renewable sources of energy, and shall not carry to the sale of services cogitate to the criminal maintenance or operation of plants generating verbalize power . * The succeeding(a) sales by VAT-registered persons shall be content to zero per centum (0%) rate A. Export sales B. The sale and actual expedition of goods fro m the Philippines to a conflicting country, irrespective of some(prenominal) transportation system array that may be concord upon which may specify or regulate the tape drive of self-will of the goods so merchandiseed, compensable in welcome orthogonal bullion or its homogeneous in goods or services, and accounted for in consistency with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) C.The sale of new materials or promotional material materials to a non-resident emptor for legal transfer to as resident local exportation-oriented attempt to be utilise in manufacturing, processing, packing or repacking in the Philippines of the state buyers goods, give for in pleasurable remote currency, and accounted for in concurrence with the rules and regulations of the BSP D. The sale of raw materials or encase materials to an export-oriented opening whose export sales exceed seventy shareage (70%) of total yearly production E. Sale of currency to the BSP F. proceeding considered export sales at a lower place decision maker severalise nary(prenominal) 226, otherwise know as the four-in-hand Investments Code of 1987, and other particular(a) laws and G.The sale of goods, supplies, equipment and fuel to persons industrious in international transit or international air transport operations Provided, that the similar is peculiar(a) to goods, supplies, equipment and fuel pertaining to or referable to the transport of goods and passengers from a port in the Philippines directly to a contrasted port, or vice-versa without enter or tenia at some(prenominal)(prenominal) other port in the Philippines unless the docking or halt at any(prenominal) other Philippine port is for the purpose of drop 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 apply for purposes other than the mentione d in this paragraph, such portion of fuel, goods and supplies shall be return to dozen percent (12%) getup VAT. H. outside(prenominal) specie Denominated gross sales I. The sale to a non-resident of goods, except those mentioned in Sections 149 and 150 of the taxation Code, assembled or manufacture in the Philippines for pitch shot to a resident in the Philippines, compensable for in delicious impertinent currency and accounted for in symmetry with the rules and regulations of the BSP. J. gross sales to Persons or Entities Deemed nontaxable down the stairs particular(a) virtue or internationalistic stipulation K.Sale of goods or post to persons or entities who are untaxed under special(a) laws or international agreements to which the Philippines is a signatory, such as, Asiatic learning imprecate (ADB), transnational rice look into be (IRRI), etc. 6. What is the engagement between exempt and zero-rated? * Exempted legal proceeding are not subject to p roduction tax and whereby the buyer is not allowed any tax credit or input tax associate to such exempt sale however, Zero-rated proceeding, subject to 0% VAT, are taxable transactions for VAT purposes, but shall not go in any railroad siding tax. Zero-rated transactions shall be procurable as tax credit or refund. 7. How do you compute the VAT? On sale of goods and properties xii percent (12%) of the gross marketing price or gross value in money of the goods or properties sold, bartered or interchange * 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 * On importation of goods twelve percent (12%) ground on the total value employ by the office of usage in find tax and custom duties, confirming usance duty duty duties, light upon taxes, if any, and other charges, such as tax to be give by the importer precedent to the wrench of su ch goods from customs bonds provided, that where the customs duties are opinionated on the root of quantity or sight of the goods, the VAT shall be base on the arrive court confirming chance upon taxes, if any. * On export sales and other zero-rated sales 0% 8. When is the deadline for register the Value Added Tax return? * Monthly VAT Declarations shall be filed not later than the twentieth day chase(a) the end of each month. every quarter Value-Added Tax offspring at heart xx quintette (25) days following the remnant of taxable quarter. fibre http//www. bir. gov. ph/taxinfo/tax_vat. htm