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PMREYES

JD-TAX2 JD4301
AY 2018-2019

VALUE ADDED TAX

A. Concept

B. Characteristics of a VAT

RR 16-2005, §4.105-2.

1. Destination Principle

Commissioner of Internal Revenue v. American Express, G.R. No. 152609, June


29, 2005
Commissioner of Internal Revenue v Placer Dome Technical Services (Phils.),
Inc., G.R. No. 164365, June 8, 2007

C. Tax Credit Method

NIRC, §110(A)
Commissioner of Internal Revenue v Seagate Technology, G.R. No. 153866,
February 11, 2005
Abakada Guro Party List v Ermita, G.R. Nos. 168056, 168207, 168461, 168463 &
168730, September 1, 2005.

1. Input tax and output tax, defined

NIRC, §110(A)(3)
RR 16-2005, §4.110-1.
CIR v. Benguet Corporation, G.R. Nos. 134587 & 134588, July 14, 2006

D. Persons liable

NIRC, §105
RR 16-2005, §4.109-1(B)(1)(x)
RR 16-2005, §4.105-1
RR 16-2011 (Oct. 27, 2011)

1. Meaning of “In the course of trade or business”

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RR 16-2005, §4.105-3
CIR v. Magsaysay Lines, G.R. No. 146984, July 28, 2006
Lapanday Foods Corporation v. Commissioner of Internal Revenue, CTA EB
Case No. 367 (CTA Case No. 7097, January 29, 2009
Waterfront Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case
No. 8024, November 13, 2012
Kepco Philippine Corporation v. Commissioner of Internal Revenue, CTA Case
No. 8319, November 7, 2013
Commissioner of Internal Revenue v. Ongtengco, CTA EB Case No. 995 (CTA
Case No. 8190), June 30, 2014
Commissioner of Internal Revenue v Court of Appeals & Commonwealth
Management and Services Corporation, G.R. No. 125355, March 30, 2000.
Commissioner of Internal Revenue v. Sony Philippines, G.R. No. 178697,
November 17, 2010

E. VAT on Sale of Goods or Properties

NIRC,§106
NIRC,§106(A)(1)
RR 16-2005, §4.106-1 to §4.106-3

1. Requisites of Vatability of Sale of Goods or Properties

RR 16-2005, §4.109-1(B)(1)(x)
RR 16-2005, §4.106-3 to §4.106-4
RR 16-2011 (Oct. 27, 2011)
RR 13-2012

F. Zero-rated Sales of Goods or Properties and Effectively Zero-rated Sales of


Goods or Properties

NIRC, §106(A)(2)
RR 16-2005, §4.106-5
RR 6-2012 (Apr. 2, 2012)
RR 5-2013 (Mar. 21, 2013)
Commissioner v Benguet Corporation, G.R. Nos. 134587 & 134588, July 8, 2005.

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CIR v. Seagate Technology, G.R. No. 153866, February 11, 2005

1. Sale of Goods to Persons in a Foreign Country

NIRC, §106(A)(2)(a)(1)

2. Sale of Goods to Nonresident buyer for delivery to an export-oriented


enterprise

NIRC, §106(A)(2)(a)(2)

3. Transactions considered as Export Sales under the Omnibus


Investment Code of 1987 and other Special Laws

RR 16-2005, §4.106-5(a)(5)

a. VAT Treatment of Ecozone Transactions

RMC 74-99
RMC 50-2007 (Jul. 30, 2007)
RR 2-2012 (Feb. 17, 2012)

Commissioner on Internal Revenue v. Toshiba Information Equipment,


G.R. No. 157594, March 9, 2010.
Commissioner on Internal Revenue v. Sekisui Jushi Philippines, G.R. No.
149671, July 21, 2006
Commissioner on Internal Revenue v. Toshiba Information Equipment,
G.R. No. 150154, August 9, 2005
Commissioner on Internal Revenue v. Cebu Toyo Corporation, G.R. No.
149073, February 16, 2005
Contex Corp v. Commissioner on Internal Revenue, G.R. No. 151135, July 2,
2004.

4. Foreign currency denominated sales

NIRC, §106(A)(2)(b)
RR 16-2005, §4.106-6(b)

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G. Transactions deemed sale

NIRC, §106(B)
RR 16-2005, Section 4.106-7
RMC No. 3-2014
Commissioner of Internal Revenue v. Magsaysay Lines, G.R. No. 146984, July 28,
2006
San Roque Power Corp. v. Commissioner of Internal Revenue, G.R. No. 180345,
November 25, 2009

H. Change or Cessation of Status as VAT-registered Person

NIRC, §106(C)
RR 16-2005, Section 4.106-8
RR 16-2005, Section 4.106-8(b)(1)
RR 10-2011 ( Jul. 1, 2011)

I. VAT on Importation of Goods

NIRC, §107(A)
RR 16-2005, Section 4.107-1
Commissioner of Internal Revenue v Seagate Technology, G.R. No. 153866,
February 11, 2005

1. Technical Importation

NIRC, §107(B)
RR 16-2005, §4.107-1
RR 16-2005, §4.107-1(a)
RR 2-2012 (Feb. 17, 2012), §3

J. VAT on Sale of Service or Use or Lease of Properties

NIRC, §108(A)
RR 16-2005, §4.108-1 to §4.108-4
RMC 63-2010 (Jul 19, 2010)

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RMC 65-2012 (Oct. 31, 2012)


RMC 9-2013 (Jan. 29, 2013)
Diaz v. Secretary of Finance, G.R. No. 193007, July 19, 2011
CIR v. SM Prime Holdings, G.R. No. 183505, February 26, 2010
Officemetro Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case
No. 8382, June 3, 2014

K. Zero-rated Sale of Services

NIRC, §108(B)
RR 16-2005, §4.108-5

1. Services performed in the Philippines to a Recipient outside the


Philippines

Section 108(B)(2), NIRC


American Express International v. CIR, June 29, 2005
CIR v. Placer Dome, G.R. No. 164365, June 8, 2007
CIR v. Burmeister and Wain Scandinavian Contractor Mindanao, G.R. No.
153205, January 22, 2007
Accenture v. CIR, G.R No. 190102, July 11, 2012
Sitel Philippines Corporation v. Commissioner of Internal Revenue, CTA Case
No. 7623, March 3, 2010
Accenture, Inc. v Commissioner of Internal Revenue, C.T.A. Case No. 7046,
Sep. 22, 2009
Parlance Systems v Commissioner of Internal Revenue, C.T.A. Case No. 7459,
July 9, 2009.

2. Services to Persons and Entities exempt under Special Laws or


International Agreements

Section 108(B)(3), NIRC


Commissioner of Internal Revenue v. Acesite Philippines, G.R. No. 147295,
February 16, 2007

3. Sale of Power generated through Renewable Sources of Energy

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Section 108(B)(7), NIRC


R.A. 9513 (Dec. 16, 2008)
Mindanao Geothermal Partnership v Commissioner of Internal Revenue,
CTA Case No. 7801, July 10, 2012
Hedcor Sibulan, Inc. v Commissioner of Internal Revenue, CTA Case No.
8051, January 29, 2014.

L. VAT-exempt Transactions

NIRC, §109
RA 10378
RA 9238
RA 9994 (Expanded Senior Citizens Act of 2010)
RR 16-2005, §4.109-1
RR 6-2015, as amended by RR 8-2015
RR 13-2008, as amended by RR No. 13-2013, RR 4-2015
RR No. 7-2010, as amended by RR No. 8-2010
RR 16-2011
RMC 30-2009 (May 14, 2009)
RMC 12-2010 (Feb. 12, 2010)
RMC 36-2011 (Aug. 26, 2012)
RMC 32-2012 (Jul. 16, 2012)
RMC 38-2012.
RMC 57-2012 (Nov. 22, 2012)
RMC 55-2014 as amended by RMC No. 66-2014
RMC No. 78-2014
Commissioner of Internal Revenue v. Seagate Technology, G.R. No. 153866,
February 11, 2005
Commissioner of Internal Revenue v. Philippine Health Care Providers, Inc.,
G.R. No. 168129, April 24, 2007.
Hermano (San) Miguel Febres Cordero Medical Education Foundation v.
Commissioner of Internal Revenue, CTA EB Case No. 908 (CTA Case No. 8194),
September 12, 2013
Hermano (San) Miguel Febres Cordero Medical Education Foundation v.
Commissioner of Internal Revenue, CTA Case No. 8194, May 15, 2012
Perpetual Succour Hospital, Inc. v. Commissioner of Internal Revenue, CTA
Case No. 7304, December 1, 2010

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Commissioner of Internal Revenue v. Professional Services, Inc., CTA Case No.


409, January 8, 2009.
Sonza v. ABS-CBN Broadcasting Corporation, G.R. No. 138051, June 10, 2004
Philippine Amusement and Gaming Corporation v. Commissioner of Internal
Revenue, G.R. No. 172087, March 15, 2011
First Planters Pawnshop, Inc. v. Commissioner of Internal Revenue, G.R. No.
174134, July 30, 2008
Tambunting Pawnshop v. Commissioner of Internal Revenue, G.R. No. 179085,
January 21, 2010
Commissioner of Internal Revenue v. Michel J. Lhuillier Pawnshop, Inc, G.R.
160947, July 15, 2003

M. Sources of Input VAT

NIRC, §110(A)(1)

1. Purchases or Importations of Capital Goods

NIRC, §110(A)(2)
RR 16-2005, §4.110-1
RR 16-2005, §4.110-3
Taganito Mining Corporation v Commissioner of Internal Revenue, CTA EB
No. 935 and 936, December 16, 2014.
Taganito Mining Corporation v. Commissioner of Internal Revenue, G.R. No.
201195, November 26, 2014

2. Presumptive Input Tax Credits

NIRC, §111(B)
RR 16-2005, §4.111-1(b)

3. Transitional Input Tax Credits

NIRC, §111(A)
RR 16-2005, §4.111-1(a)
Fort Bonifacio Development Corporation v Commissioner of Internal
Revenue, G.R. Nos. 175707, 180035, & 181092, November 19, 2014

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Fort Bonifacio Development Corporation v Commissioner of Internal Revenue,


G.R. No. 173425, January 22, 2013
Fort Bonifacio Development Corporation v Commissioner of Internal Revenue,
G.R. No. 173425, September 4, 2012
Fort Bonifacio Development Corporation v Commissioner of Internal Revenue,
G.R. Nos. 158885 and 170680, October 2, 2009
Fort Bonifacio Development Corporation v Commissioner of Internal Revenue,
G.R. Nos. 158885 and 170680, April 2, 2009.

N. Persons who can avail of Input Tax Credit

NIRC, §110(A)(2)
RR 16-2005, §4.110-2

O. Determination of Output/Input VAT, VAT payable (Excess Output) or


Excess Input Tax Credits

1. Determination of Input Tax

RR 16-2005, §4.110-2

a. Apportionment of Input Tax on Mixed Transactions

NIRC, §110(A)(3)
NIRC, §112(A)
RR 16-2005, §4.112-1(a)
RR 16-2005, §4.110-4

2. Determination of Output Tax

RR 16-2005, §4.110-6

3. Determination of VAT Payable (Excess Output) or VAT Creditable


(Excess Input)

NIRC, §110(B)
RR 16-2005, §4.110-7

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P. Substantiation of Input Tax Credits

RR 16-2005, §4.110-8

Q. Refund or Tax Credit of Unutilized Input Tax

NIRC, §112(A)

1. Claim for Refund or Tax Credit of Unutilized Input Tax attributable to


zero-rated or effectively zero-rated sales

Luzon Hydro Corporation v. Commissioner of Internal Revenue, G.R. No.


188260, November 13, 2013
Power Corporation v. Commissioner of Internal Revenue, G.R. No. 180345,
November 25, 2009
Intel Technology of the Philippines, Inc. v. Commissioner of Internal Revenue,
G.R. No. 166732, 27 April 2007.
Total (Philippines) v Commissioner of Internal Revenue, CTA Case Nos. 8056
and 8163, December 19, 2014
Total (Philippines) Corporation v. Commissioner of Internal Revenue, CTA EB
No. 1153 (CTA Case No. 8253), October 15, 2015
Miramar Fish Company Inc. v. Commissioner of Internal Revenue, G.R. No.
185432, June 4, 2014
Visayas Geothermal Power Company v. Commissioner of Internal Revenue, G.R.
No. 197525, June 4, 2014
Commissioner of Internal Revenue v. Mindanao II Geothermal Partnership,
G.R. No. 189440, June 18, 2014
Taganito Mining Corporation v. Commissioner of Internal Revenue, G.R. No.
197591, June 18, 2014
San Roque Power Corporation v. Commissioner of Internal Revenue, G.R. No.
205543, June 30, 2014
CIR v. CE Luzon Geothermal Power Company, G Commissioner of Internal
Revenue R. No. 190198, September 17, 2014
CNK Power Company Limited v. Commissioner of Internal Revenue, G.R. No.
202066 and G.R. No. 205353, September 30, 2014
CIR v. Aichi, G.R. No. 183421, October 22, 2015

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CIR v. Burmeistor, G.R. No. 190021, October 22, 2014


Taganito Mining Corporation v. Commissioner of Internal Revenue, G.R. No.
198076, November 19, 2014
AT&T Communications Services Phils., Inc. v. Commissioner of Internal
Revenue, G.R. No. 185969, November 19, 2014
Taganito Mining Corporation v. Commissioner of Internal Revenue, G.R. No.
201195, November 26, 2014
CBK Power Company Limited v. Commissioner of Internal Revenue, G.R. No.
198928, December 3, 2014
Mindanao II Geothermal Partnership v. Commissioner of Internal Revenue,
G.R. No. 204745, December 8, 2014
Panay Power Corporation v. Commissioner of Internal Revenue, G.R. No.
203351, January 21, 2015
Nippon Express (Philippines) Corporation v. Commissioner of Internal
Revenue, G.R. No. 185666, February 4, 2015
Northern Mindanao Power Corporation v. Commissioner of Internal
Revenue, G.R. No. 185115, February 18, 2015
Cargill Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No.
203774, March 11, 2015

a. Rules on the Prescriptive Period for Filing of Tax Refund or Tax


Credit of Unutilized Input VAT

Mindanao II Geothermal Partnership v. Commissioner of Internal


Revenue, and Mindanao I Geothermal Partnership v. Commissioner of
Internal Revenue, G.R. Nos. 193301 and 194637, March 11, 2013.

i. Two Year Prescriptive Period within which to File


Administrative Claim

NIRC, §112(A)
Atlas Consolidated Mining v. Commissioner of Internal Revenue, G.R.
Nos. 141104 & 148763, June 8, 2007
Commissioner of Internal Revenue v. Mirant Pagbilao Corporation,
G.R. No. 172129, September 12, 2008
Commissioner of Internal Revenue v Aichi Forging Company, G.R. No.
184823, October 6, 2010

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Commissioner of Internal Revenue v. San Roque Power Corporation,


G.R. No. 187485, Taganito Mining Corporation v. Commissioner of
Internal Revenue, G.R. No. 196113, Philex Mining Corporation v.
Commissioner of Internal Revenue, G.R. No. 197156, February 12,
2013.

(1) Exception

Visayas Geothermal Power Company v. CIR, G.R. No. 197525,


June 4, 2014
AT&T Communications Services Phils., Inc. v. CIR, G.R. No.
185969, November 19, 2014

ii. 120+30 Day Period within which to File Judicial Claim

NIRC, §112(C)
RMC 54-2014 (Jun. 11, 2014)
Commissioner of Internal Revenue v Aichi Forging Company, G.R. No.
184823, October 6, 2010
Commissioner of Internal Revenue v. San Roque Power Corporation,
G.R. No. 187485, Taganito Mining Corporation v. Commissioner of
Internal Revenue, G.R. No. 196113, Philex Mining Corporation v.
Commissioner of Internal Revenue, G.R. No. 197156, February 12,
2013
Commissioner of Internal Revenue v Team Sual Corporation, G.R. No.
205055, July 18, 2014
Commissioner of Internal Revenue v. Coral Bay Nickel Corporation, CTA
EB No. 1133 (CTA Case No. 8252), Jan. 7, 2015
Team Sual Corporation (formerly: Mirant Sual Corporation) v.
Commissioner of Internal Revenue, and Commissioner of Internal
Revenue v. Team Sual Corporation (formerly Mirant Sual) Corporation),
CTA EB Nos. 649 & 651, March 21, 2012
Total (Philippines) Corporation v. Commissioner of Internal Revenue,
CTA EB No. 1153 (CTA Case No. 8253), October 15, 2015
Hedcor, Inc. v. Commissioner of Internal Revenue, G.R. No. 207575,
July 15, 2015

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Pilipinas Total Gas v. Commissioner of Internal Revenue, G.R No.


207112, December 8, 2015
Commissioner of Internal Revenue v. Doosan Heavy Industries and
Construction, CTA EB No. 1255, May 27, 2016
Rohm Apollo Semiconductor Philippines v Commissioner of Internal
Revenue, G.R. No. 168950, January 14, 2015.
Commissioner of Internal Revenue v Mirant Pagbilao Corporation GR
No 180434 January 20 2016
Silicon Philippines v. Commissioner of Internal, G.R. No. 182737, March
2, 2016
Nippon Express (Philippines) Corporation v. Commissioner of Internal
Revenue, G.R. No. 196907, March 13, 2013
Commissioner of Internal Revenue v. Toledo Power Company, G.R. No.
183880, January 20, 2014
CBK Power Limited v. Commissioner of Internal Revenue, G.R. Nos.
198729-30, January 15, 2014
Commissioner of Internal Revenue v. Dash Engineering, G.R. No. 184145,
December 11, 2013

(1) Exception

Commissioner of Internal Revenue v. San Roque Power


Corporation, G.R. No. 187485, Taganito Mining Corporation v.
Commissioner of Internal Revenue, G.R. No. 196113, Philex
Mining Corporation v. Commissioner of Internal Revenue, G.R.
No. 197156, February 12, 2013
Commissioner of Internal Revenue v. San Roque Power
Corporation, G.R. No. 187485, Taganito Mining Corporation v.
Commissioner of Internal Revenue, G.R. No. 196113, Philex
Mining Corporation v. Commissioner of Internal Revenue, G.R.
No. 197156, October 8, 2013
Procter & Gamble Asia PTE Ltd. v. Commissioner of Internal
Revenue, G.R. No. 202071, February 19, 2014
Team Energy Corporation v. Commissioner of Internal Revenue,
G.R. No. 197760, January 13, 2014
Commissioner of Internal Revenue v. Team Sual Corporation, G.R.
No. 194105, February 5, 2014

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Applied Food Ingredients Company v. Commissioner of Internal


Revenue, G.R. No. 184266, November 11, 2013
Republic of the Philippines v. GST Philippines, G.R. No. 190872,
October 17, 2013

2. Claim for Refund or Tax Credit of Unutilized Input Tax on account of


cancellation of VAT Registration

NIRC, §112(B)
Associated Swedish Steels v. Commissioner of Internal Revenue, CTA EB No.
854 (CTA Case No. 7850), August 23, 2012
Mindanao I Geothermal Partnership v Commissioner of Internal Revenue,
CTA EB 956 (CTA Case No. 8247), September 16, 2013
Dumex Philippines, Inc. v Commissioner of Internal Revenue, CTA EB Case
No. 917 (CTA Case No. 7790), June 25, 2013
Dumex Philippines v Commissioner of Internal Revenue, CTA Case No. 7790,
April 3, 2012.
SMI-ED Philippines Landholdings, Inc. v Commissioner of Internal Revenue,
CTA EB Case No. 208 (CTA Case No. 6740), February 27, 2008.
SMI-ED Philippines Landholdings, Inc. v Commissioner of Internal Revenue,
CTA Case No. 6740, April 20, 2006

3. Where to file the administrative claim for refund/tax credit be filed

RR 16-2005, §4.112-1(c)

4. Manner of giving refund

NIRC, §112(E)
RMC 38-2014

5. Manner of giving tax credit

RR 5-2000, as amended by RR 14-2011


EO 68, series of 2012, as amended by EO 68-A, series of 2014
DOF Joint Circular 2-2014
RMC 82-2014

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R. Invoicing Requirements

1. Invoicing Requirements in general

NIRC, §113(A)
RR 16-2005, §4.113-1(A)
Kepco Philippines v Commissioner of Internal Revenue, G.R. No. 179961,
January 31, 2011
Southern Philippines Power Corporation v Commissioner of Internal Revenue,
G.R. No. 179632, October 19, 2011
AT&T Communications Services Philippines v Commissioner of Internal
Revenue, G.R. No. 182364, August 3, 2010
Nippon Express (Philippines) Corporation v. CIR, G.R. No. 185666, February 4,
2015
Northern Mindanao Power Corporation v. CIR, G.R. No. 185115, February
18, 2015

2. Information to be contained in the VAT Invoice or VAT Official


Receipt

NIRC, §113(B)
RR 16-2005, §4.113-1(B)

a. Effect of Failure to Comply with the Invoicing Requirements on


Claim for Refund or Tax Credit

Silicon Philippines v. CIR, G.R. No. 172378, January 17, 2011


Western Mindanao Power Corp. v CIR, G.R. No. 181136, June 13, 2012
Eastern Telecommunications v. CIR, G.R. No. 168856, August 29, 2012
Kepco Philippines v Commissioner of Internal Revenue, G.R. No. 181858,
November 24, 2010
Intel Technology Philippines v Commissioner of Internal Revenue, G.R. No.
166732, April 27, 2007
Miramar Fish Company Inc. v. CIR, G.R. No. 185432, June 4, 2014
Eastern Telecommunications Philippines v. CIR, G.R. No. 183531,
March 25, 2015

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Commissioner of Internal Revenue v Northwind Power Development


Corporation, CTA EB Nos. 1037 & 1042, December 16, 2014

3. Invoicing and recording deemed sale transactions

RR 16-2005, §4.113-2

4. Consequence of issuing erroneous VAT invoice or VAT official receipts

NIRC, §113(D)
RR 16-2005, §4.113-4
RR 18-2011 (Nov. 21, 2011)

S. Filing of Return and Payment

NIRC, §114(A) to (B)

T. Withholding of Final VAT

NIRC, §114(C)
RR 16-2005, §4.114-2(a)
RR 16-2005, §4.114-3(b)

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