VAT EXEMPT

(v)
International Shipping
From Tokyo to Manila
Case 1: passengers and cargoes from Tokyo to Manila then unload, took passengers
and cargoes back to Tokyo - - VAT Exempt
Tokyo
Manila
Tokyo

Case 2: passengers and cargoes from Tokyo to Manila then unload, took passengers
and cargoes from Manila, then Manila to Cebu then Cebu to Tokyo - - VAT exempt
Tokyo
Manila
Cebu
Tokyo

Case 3:
Tokyo

Manila

Cebu

Manila

Tokyo

Subject to VAT
OUTPUT TAX
Actual Sales

Regular
0 Rated

Deemed Sales
INPUT TAX
1. Passed on VAT additional amount incurred when your purchase
2. Transitional Input Tax
3. Standard
4. Withholding VAT
5. VAT paid in advance
Requisites for Input Tax
1. The buyer is VAT registered
2. Transaction is in the course of trade or business
3. The transaction is supported by VAT official receipts or VAT invoices (TIN-VAT)
If you are not VAT registered, you cannot claim input tax credit
If VAT registrable he cannot claim input tax credit but there is output tax

PURCHASE OF SERVICES
Service provider

Buyer

1. Bill is sent AR
112,000

112,000

Service expense

Service income 100,000

Deferred Input Tax

100,000
Deferred OT

12,000

Accounts Payable

12,000
2. Payment is Cash 112,000
received/made
AR
112,000

AP
112,000

Deferred OT 12,000

112,000
Cash

IT

12,000
OT

12,000

Deferred Input Tax

12,000
TRANSACTION DEEMED SALES
Ex.
Transaction 1: Mr X. retired from business, unsold goods 100,000
Goods on hand are deemed sale ( 100,000 *12% =12,000) to be paid
by Mr. X
Mr. Y received from X the unsold goods and he was able to sold them
for 200,000
OT on actual sales (200,000 * 12%)
- VAT on deemed sales (input tax credit)

24,000

12,000
VAT Payable
12,000
** Yung biniyaran ni X (seller) ay naging input tax ni Y (buyer)
3. Exercise
a. Cash/AR 1,120,000
Sales-VAT
1,000,000
OT
120,000
b. Cash/AR 500,000
Sales exempt
c. Cash/Receivable
Sales 0 rated
d. Supplies 150,000

Sales should be properly labeled

500,000
300,000

IT

18,000
Cash/Payable

e. Purchases 200,000
IT
24,000
Cash/Payable
25:08 140106_004

168,000

224,000