ATENEO DE MANILA UNIVERSITY SCHOOL OF LAW

Makati City Syllabus on VALUE-ADDED TAX Atty. Carlos G. Baniqued I. TRANSACTIONS SUBJECT TO REGULAR VAT A. In General Sec. 105, NIRC BIR Rul. 98-97, Aug. 28, 1997 BIR Rul. No. 18-05, Sept. 16, 2005 VAT Rul. No. 444-88 VAT Rul. No. 207-90, Nov. 8, 1990 BIR Rul. No. 10-98, Feb. 5, 1998 CIR v. Court of Appeals and Commonwealth Mgt. & Services Corp., G.R. No. 125355, March 30, 2000, 329 SCRA 237 (2000) See Lapanday Corp. v. CIR, CTA E.B. No. 367 (CTA Case No. 7097), Jan. 29, 2009 VAT Rul. No. 26-97, April 1, 1997 Tourist Trade and Travel Corp. v. CIR, CTA Case No. 4806, Jan. 19, 1996 BIR Rul. No. 113-98, July 23, 1998 CIR v. Magsaysay Lines, Inc., 497 SCRA 63, 72-73 (2006) CIR v. Benguet Corporation, 463 SCRA 28 (2005) Abakada Guro Party List v. Ermita, 469 SCRA 1 (2005) Diaz v Secretary of Finance, G.R. No. 193007, July 19, 2011, 654 SCRA 96, 117 (2011) B. Sale of Goods or Properties 1. Transactions Covered a. Actual Sale Sec. 106(A)(1), NIRC, as amended by Rep. Act. No. 9337 b. Transactions Deemed Sale Sec. 106(B), NIRC, as amended by Rep. Act No. 9337 Sec. 4.106-7, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 c. Changes in or Cessation of Status of a VAT-Registered Person Sec. 106(C), NIRC, as amended by Rep. Act. No. 9337 Sec. 4.106-8, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 and later by Rev. Regs. No. 10-2011, July 1, 2011 2. Taxable Base a. Gross Selling Price Sec. 106(A)(1), 2nd par., NIRC, as amended by Rep. Act No. 9337 Sec. 4.106-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 b. Sales Discounts, Returns and Allowances

Sec. 106(D), NIRC, as amended by Rep. Act No. 9337 Sec. 4.106-9, Rev. Regs. No. 16-2005, Sept. 1, 2005 VAT Ruling No. 204-90, Oct. 16, 1990 c. Taxable Base for Transactions Deemed Sale and Below Market Gross Selling Price Sec. 4.106-7(b), Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 C. Sale of Services 1. Meaning of Sale or Exchange of Service Sec. 108(A), NIRC, as amended by Rep. Act. No. 9337 Sec. 4.108-2, Rev. Regs. No. 16-2005, Sept. 1, 2005 Lhuillier v. CIR, CTA Case No. 6533, May 16, 2003 2. Taxable Base: Gross Receipts Actually and Constructively Received Sec. 108(A), NIRC, as amended by Rep. Act. No. 9337 Sec. 4.108-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 BIR Rul. No. 195-89, Sept. 8, 1989 VAT Rul. No. 111-88, April 25, 1989 VAT Rul. No. 205-90, Oct. 16, 1990 a. Amounts Earmarked for Payment to Third Parties Sec. 4.108-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 CIR v. Tours Specialists, Inc., 183 SCRA 402 (1990) BIR Rul. No. DA-069-2006, March 1, 2006 b. Reimbursement of Expenses Sec. 4.108-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 VAT Rul. No. 283-88, July 4, 1988 VAT Rul. No. 87-88, April 14, 1988 VAT Rul. No. 97-88, April 15, 1988 D. Importation of Goods Sec. 107, NIRC, as amended by Rep. Act. No. 9337 II. TRANSACTIONS SUBJECT TO ZERO-RATED VAT A. Difference Between Zero-Rated and Exempt Secs. 4.106-5, 1st par., and 4.108-5(a), Rev. Regs. No. 16-2005, Sept. 1, 2005 Cf. Sec. 4.109-1(A), Rev. Regs. No. 16-2005, Sept. 1, 2005 CIR v. Cebu Toyo Corporation, 451 SCRA 447 (2005) CIR v. Seagate Tech. (Phil.), 451 SCRA 133, 144 (2005) CIR v. Toshiba Information Equipment (Phils.), Inc., 466 SCRA 211 (2005) CIR v. Sekisui Jushi Philippines, Inc., 496 SCRA 206, 212-214 (2006) Cf. Contex Corp. v. CIR, 433 SCRA 376 2004) B. Automatically Zero-Rated Transactions 1. Sale of Goods and Properties Sec. 106(A)(2)(a)(1), (2), (4) and (b), NIRC, as amended by Rep. Act. No. 9337 2. Sale of Services Sec. 108(B)(1), (2), (6) and (7), NIRC, as amended by Rep. Act. No. 9337

CIR v. Placer Dome Technical Services (Phils.), Inc., 524 SCRA 271 (2007) CIR v. American Express Intl, Inc. (Phil. Branch), 462 SCRA 197 (2005) CIR v. Burmeister & Wain Scandinavian Contractor Mindanao, Inc., 512 SCRA 124, 134-140 (2007) 3. Meaning of Accounted for in Accordance with the Rules and Regulations of the BSP BIR Rul. No. 176-94 VAT Rul. No. 47-00, Oct. 26, 2000 C. Effectively Zero-Rated Transactions 1. Sale of Goods and Properties Sec. 106(A)(2)(3), (5), (6) and (c), NIRC, as amended by Rep. Act No. 9337 Sec. 4.106-6, Rev. Regs. No. 16-2005, Sept. 1, 2005 Atlas Consolidated Mining and Development Corporation v. CIR, 524 SCRA 73, 90-96 (2007) and 534 SCRA 51 (2007) 2. Sale of Services Sec. 106(B)(3), (4) and (5), NIRC, as amended by Rep. Act No. 9337 Sec. 4.108-6, Rev. Regs. No. 16-2005, Sept. 1, 2005 CIR v. Acesite (Philippines) Hotel Corporation, 516 SCRA 93, 98-101 (2007) CIR v. John Gotamco & Sons, Inc., 148 SCRA 36 (1987) 3. Requirement to Obtain Approved Application for Effective Zero-Rating: Deleted by Rev. Regs. No. 4-2007, Feb. 7, 2007 Sec. 4.106-6, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 (which deleted par. requiring approved application for effective zero-rating) Sec. 4.108-6, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 (which deleted par. requiring approved application for effective zero-rating) CIR v. Seagate Technology (Philippines), 451 SCRA 132, 157 (2005) D. Printing of Words Zero-Rated on Invoices/Receipts Microsoft Philippines, Inc. v. CIR, 647 SCRA 399, 406 (2011) Panasonic Communications Imaging Corp. of the Philippines v. CIR, 612 SCRA 28 (2010) Sillcon Philippines, Inc. v. CIR, G.R. No. 172378, Jan. 17, 2011, 639 SCRA 521 (2011) Kepco Philippines Corp. v. CIR, G.R. No. 179961, Jan. 31, 2011, 641 SCRA 70 (2011) Intel Technology Philippines, Inc. v. CIR, 522 SCRA 657 (2007) III. TRANSACTIONS EXEMPT FROM VAT A. Coverage of Exemption Sec. 109(1), NIRC, as amended by Rep. Act. No. 9337 Rev. Regs. No. 16-2011, Oct. 27, 2011 Rev. Mem. Circular No. 36-2011, Aug. 26, 2011 Rev. Mem. Circular No. 34-2011, Aug. 15, 2011 1. General Rule Philippine Acetylene Co., Inc. v. CIR, 20 SCRA 1056 (1967)

Phil. Natl Police Multi-Purpose Cooperative, Inc. v. CIR, CTA Case No. 4845, March 10, 1994 CIR v. Philippine Health Care Providers, Inc, 522 SCRA 131 (2007) First Planters Pawnshop, Inc. v. CIR, 560 SCRA 606 (2008) CIR v. Michael J. Lhuillier Pawnshop, Inc., G.R. No. 150947, July 15, 2003, 406 SCRA 178 (2003) PAGCOR v. The Bureau of Internal Revenue, et. al., G.R. No. 172087, March 15, 2011, 645 SCRA 338 (2011) BIR Rul. No. 155-98, Oct. 21, 1998 BIR Rul. No. 47-99, April 13, 1999 2. Exception CIR v. John Gotamco & Sons, Inc., 148 SCRA 36 (1987) Maceda v. Macaraig, Jr., 223 SCRA 217 (1993) B. Waiver of VAT Exemption/Election to be Subject to VAT Sec. 109(2), NIRC, as amended by Rep. Act No. 9337 III. INPUT TAX CREDITS & REFUNDS A. Input Tax Credit Sec. 110, NIRC, as amended by Rep. Act. No. 9337, as further amended by Rep. Act. No. 9361 Sec. 4.110-1, Rev. Regs. No. 16-2005, Sept. 1, 2005 1. Persons Who Can Avail of the Input Tax Credit Sec. 110(A)(1)(b) and (A)(2), NIRC, as amended by Rep. Act. No. 9337 Sec. 4.110-2, Rev. Regs. No. 16-2005, Sept. 1, 2005 2. Special Rules on Amortization of Input Tax on Depreciable Goods Sec. 110(A), proviso, NIRC, as amended by Rep. Act. No. 9337 Sec. 4.110-3, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 Sillcon Philippines, Inc. v. CIR, supra 3. Special Rules on Apportionment of Input Tax on Mixed Transactions Sec. 110(A)(3), NIRC, as amended by Rep. Act. No. 9337 Sec. 4.110-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 4. Substantiation of Input Tax Credits Sec. Sec. 4.110-8, Rev. Regs. No. 16-2005, Sept. 1, 2005 BIR Rul. No. 61-00, Nov. 8, 2000 Atlas Consolidated Mining and Development Corporation v. CIR, 518 SCRA 425, 430-431 (2007) Atlas Consolidated Mining and Development Corporation v. CIR, 546 SCRA 150 (2008) and 524 SCRA 73 (2007) CIR v. Manila Mining Corporation, 468 SCRA 571, 584 (2005) Intel Technology Philippines, Inc. v. CIR, supra CIR v. Phil. Health Care Providers, Inc., 522 SCRA 131 (2007) B. Transitional Input Tax Sec. 111(A), NIRC, as amended by Rep. Act. No. 9337 Sec. Sec. 4.111-1(a), Rev. Regs. No. 16-2005, Sept. 1, 2005 Fort Bonifacio Development Corporation v. CIR, 583 SCRA 168, 192-193 (2009)

C. Presumptive Input Tax Sec. 111(B), NIRC, as amended by Rep. Act. No. 9337 Sec. Sec. 4.111-1(b), Rev. Regs. No. 16-2005, Sept. 1, 2005 D. Final Withholding VAT Sec. 114(C), NIRC, as amended by Rep. Act. No. 9337 Sec. Sec. 4.114-2(a), Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 See Illustration in Sec. Sec. 4.110-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs. No. 4-2007, Feb. 7, 2007 E. Claims for Refund or Issuance of Tax Credit Certificates Sec. 112, NIRC, as amended by Rep. Act. No. 9337 1. Zero-Rated or Effectively Zero-Rated Transactions Sec. 112(A), NIRC, as amended by Rep. Act. No. 9337 2. Cancellation of VAT Registration Sec. 112(B), NIRC, as amended by Rep. Act. No. 9337 3. Period within which Refund or Tax Credit of Input Tax shall be Made Sec. 112(C), NIRC, as amended by Rep. Act. No. 9337 Correlate with Sec. 229, NIRC Atlas Consolidated Mining and Development Corporation v. CIR, 524 SCRA 73, 90-96 (2007) CIR v. Mirant Pagbilao Corporation, G.R. No. 172129, Sept. 12, 2008, 565 SCRA 154 (2008) CIR v. Aichi Forging Company of Asia, Inc., G.R. No. 184823, Oct. 6, 2010, 632 SCRA 422 (2010) IV. ADMINISTRATIVE REQUIREMENTS A. Registration of VAT Taxpayers Sec. 9.236-1 Sec. 9.236-6, Rev. Regs. No. 16-2005, Sept. 1, 2005 B. Invoicing and Bookkeeping Requirements Sec. 4.113-1 Sec. 4.113-4, Rev. Regs. No. 16-2005, Sept. 1, 2005 C. Filing of VAT Returns and Payment of VAT Sec. 4.114-1 Sec. 4.114-3, Rev. Regs. No. 16-2005, Sept. 1, 2005