Business Taxes

2. Franchise grantees of radio and/or television broadcasting whose annual gross receipts year do not
exceed ten million pesos (P10,000,000) derived from the business covered by the law granting the
franchise may opt for VAT registration. This option, once exercised, shall be irrevocable. (Sec. 119, Tax
Code)

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.

C. CANCELLATION OF REGISTRATION
Instances when a VAT-registered person may cancel his VAT registration:

1. If he makes a written application and can demonstrate to the commissioner’s satisfaction that
his gross sales or receipts for the following twelve (12) months, other than those that are
exempt under Section 109 (A) to (U), will not exceed P3,000,000; or

2. If he has ceased to carry on his trade or business,
and does not expect to recommence any trade or
business within the next twelve (12 months)
The cancellation for registration will be
effective from the first day of the following
month the cancellation was approved.

Power of the Commissioner to suspend business

operations

The Commissioner of the Internal Revenue or his authorized representative may order
suspension or closure of business establishment for a period of not less than 5 days for any of the
following violations:

1. Failure to issue receipts or invoices

2. Failure to file vat return
3. “Understatement” of taxable sales or receipts by 30% or more of the correct taxable sales or
receipts for the taxable quarter
4. Failure of any person to register as required under the law

COMPUTATION OF VAT PAYABLE

The corresponding liability on value added tax, as presented in the previous chapter, is generally
computed as follows:

Output Vat (Sales or Receipts x 12%) Pxx

Less: Input Vat (Purchases of Goods or Services x 12%) (xx)
Advance Vat Payment xx
Vat Payable (Excess Input Vat) Pxx

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 Business Taxes
Output Vat means the vat due on the sale, lease or exchange of taxable goods or properties or
services by any vat registered person or non-VAT registered person but required to register under
Section 236 of the Tax Code. It is an ad valorem tax, charged on the selling price of taxable goods or
services, and is payable by the customer.

ADVANCE PAYMENT OF VAT

Raw sugar and Refined sugar under RR 6-2015 shall be subject to advance payment of
VAT, by the owner/seller before the sugar is withdrawn from any sugar refinery/mill.

Base Price

The amount of advance vat payment shall be determined by applying the vat
rate of twelve percent (12%) on the applicable base price of P1,400 per 50 kg. bag for refined
sugar and P1,000 per 50 kg. bag for all other types of sugar.

Exempt from Advance VAT Payment (RR 6-2015)

I. Withdrawal of raw cane sugar

II. Withdrawal of sugar by duly accredited and registered agricultural cooperative of good
standing
III. Withdrawal of sugar by duly accredited and registered agricultural cooperative which is sold
to another agricultural cooperative

Withdrawal or Transfer of Ownership of Sugar

The proprietor of a sugar refinery/mill shall not allow the issuance of

quedan/warehouse receipts or other evidence of ownership or allow any withdrawal of sugar
from its premises without proof of payment of advance vat.

Credit for Advance Payment

In addition to input tax credits under Section 110 of the Tax Code, the amount of
advance payment of vat made by sellers of sugar under revenue regulations 6-2015 shall be
allowed as credit against the output tax based on the actual gross selling price of sugar.

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