Sale of Service If the service provider is a non-resident, that is always considered in the ordinary course of business.

There are three kinds of VAT transactions 1. VAT at 12 % - vatable transaction 2. VAT at 0% - (zero rated transaction) this is a regular rate 3. VAT exempt Our VAT system works in output and input transactions. Output input credit method prevents tax on tax. Output sale of goods and services; Input- is a vat on purchases and importation. It is a sort of privilege. VAT on importation is not an output tax. To be entitled to input tax, you must be tax registered. To be liable to output tax, so long as the presumption is considered vatable transaction, whether or not vat registered for VAT purposes, you will be liable for output tax. It must be a sale of goods and services. But to be liable you gross sale only exceeds 1.5M. lower than that, you will not liable for VAT. Transaction deemed sale it is as if a sale. (Sec. 106b[b]) Cessation of business what is subject to VAT is only inventory but not property used in business. But transfer to creditors, like dacion en pago, or transfers to shareholders, regardless of property is used on business. This is considered a transaction deemed sale and subject to VAT. Transfer, use or consumption. Taxable base For sale of goods, based on gross selling price. Upon sale. Evidenced by VAT sales invoice. For sale of services, based on gross receipts. Upon. Evidenced by VAT registered official receipt. Sold this for 10pesos 22:00