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How To Compute VAT Payable in The Philippines
How To Compute VAT Payable in The Philippines
Philippines
Feb 16, 2011 by Victorino Abrugar at Law & Government, Taxation
How to compute Value Added Tax (VAT) payable in the Philippines? Any person or entity who is
engaged in trade, business or in the practice of profession may be liable to business taxes.
Business taxes can be either a Percentage tax or a Value Added Tax. Furthermore, a taxpayer can
be a VAT registered or a Non-VAT registered taxpayer. In this article, we will tackle how to
compute VAT Payable and file the monthly and quarterly VAT returns.
1. Any person or entity who, in the course of his trade or business, sells, barters, exchanges,
leases goods or properties and renders services subject to VAT, if the aggregate amount of actual
gross sales or receipts exceed P1,919,500 (RR 16-2011, RR 3 -2012), as amended.
2. A person required to register as VAT taxpayer but failed to register
3. Any person, whether or not made in the course of his trade or business, who imports goods
The above-stated taxpayers may apply for VAT registration not later than ten (10) days before
the beginning of the calendar quarter and shall pay the registration fee unless they have already
paid at the beginning of the year. In any case, the Commissioner of Internal Revenue may, for
administrative reason deny any application for registration. Once registered as a VAT person,
the taxpayer shall be liable to output tax and be entitled to input tax credit beginning on the first
day of the month following registration.
Or an alternative computation:
Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local
purchase of goods, properties or services, including lease or use of property in the course of his
trade or business. It shall also include the transitional input tax determined in accordance with
Section 111 of the Tax Code, presumptive input tax and deferred input tax from previous period.
Total Vatable Purchases are your total purchases from VAT registered suppliers. This should be
supported with VAT receipts.
Note:
VAT exempt sales, zero rated sales, purchases not qualified for input tax, and other input taxes (if
any) should also be shown in the VAT returns. See BIR Forms.
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No. 2307), if
applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax
At Source (SAWT), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Authorization letter, if return is filed by authorized representative.
Procedures
1. Fill-up BIR Form No. 2550M (for monthly VAT declaration) or 2550Q (for quarterly VAT
declaration) in triplicate copies (two copies for the BIR and one copy for the taxpayer)
2. If there is payment: File the Monthly VAT declaration, together with the required attachments,
and pay the VAT due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of
the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer
(head office of the business establishment) is registered or required to be registered.
The taxpayer must accomplish and submit BIR-prescribed deposit slip, which the bank teller
shall machine validate as evidence that payment was received by the AAB. The AAB receiving
the tax return shall stamp mark the word “Received” on the return and machine validate the
return as proof of filing the return and payment of the tax.
In places where there are no duly accredited agent banks, file the Monthly VAT declaration,
together with the required attachments and pay the VAT due with the Revenue Collection Officer
(RCO) or duly authorized Treasurer of the Municipality where such taxpayer (head office of the
business establishment) is registered or required to be registered.
The RCO or duly authorized Municipal/City Treasurer shall issue a Revenue Official Receipt
upon payment of the tax.
3. If there is no payment:
File the Monthly VAT Declaration, together with the required attachments with the
RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent or duly authorized
Municipal/ City Treasurer of Municipality/City where the taxpayer (head office of the business
establishment) is registered or required to be registered.
Deadline
For EFPS filing, please visit the BIR website for detailed and updated dates of deadlines.
Reference:
BIR Tax information on Value Added Tax
Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
Disclaimer: New and subsequent BIR rulings, issuances and or laws may render the whole or
part of the article obsolete or inaccurate. For more information, please inquire or consult with
the BIR.