TITLE IV :VALUE- ADDED TAX (1) GOODS or PROPERTIES – means all tangible and intangible
CHAPTER I - IMPOSITION OF TAX objects which are capable of pecuniary estimation and shall include:
Sec 105 Persons Liable
 VAT is impose on any person who:
a. Sells, barters, exchanges, leases goods or properties in the
course of trade or business,
b. Sells services in the course of trade or business; or
c. Imports goods, WON in the court of trade or business
Note:
 There must be a sale, barter, exchange, lease of goods or
properties, or rendering of service in the PH. If None – Not
subject to VAT
 Involuntary Sale of vessels by a taxpayer not engaged in
the sale of vessels pursuant to the government’s policy of
privatization is not subj to VAT because the sale was not in
the course of trade or business.
ELEMENTS (Transactions which is subj to VAT):
a. It must be done in the ordinary course of trade or business
b. There must be a sale, barter, exchange, lease of goods or
properties, or rendering service in the PH; and
c. It is not VAT-exempt or VAT Zero-rated
- Absense of one will not make the transaction subj to
VAT
 VAT is an indirect tax and the amount of tax may be shifted or
passed on to the buyer, transferee or lessee of the goods,
properties or services.
 This rule shall likewise apply to existing contracts of sale or
lease of goods, properties or services at the time of the
effectivity of RA 7716.
IN THE COURSE OF TRADE OR BUSINESS
 The regular conduct or pursuit of a commercial or an economic
activity
 It includes transactions incidental thereto,
 It covers any person regardless of WON the person engaged is:
a. Nonstock, Nonprofit Private Organization (irrespective of
the disposition of its net income and WON it sells
exclusively to members or their guests); or
b. Government Entity.
 Rule of Regularity, to the contrary notwithstanding, services as
defined in this Code rendered in the Philippines by nonresident
foreign persons shall be considered as being course of trade or
business.
NOTE:
 If Taxpayer is a non-resident foreign person, no need for the
regularity of conduct – Services rendered by them in the PH are
considered in the course of trade or business – SUBJ TO VAT
 Exception to the “REGULARITY REQUIREMENT”
NORMAL VAT TRANSACTION or those subject to 12% are:
a. Sale of Goods and Properties
b. Sale of Services; and
c. Importation
Sec 106 VAT on Sale of Goods or Properties
(A) Rate and Base of Tax
TAX RATE: 12% of the gross selling price or gross value in money of
the goods or properties sold, bartered or exchanged
 Such tax to be paid by the seller or transferor.
TAX BASE: Gross Selling Price
(a) Real properties held primarily for sale to customers or held for
lease in the ordinary course of trade or business;
(b) The right or the privilege to use patent, copyright, design or
model, plan, secret formula or process, goodwill, trademark,
trade brand or other like property or right;
(c) The right or the privilege to use in the Philippines of any
industrial, commercial or scientific equipment;
(d) The right or the privilege to use motion picture films, tapes and
discs; and
(e) Radio, television, satellite transmission and cable television
time.
Note: This is not an exclusive list.
GROSS SELLING PRICE – means the total amount of money or its
equivalent which the purchaser pays or is obligated to pay to the
seller in consideration of the sale, barter or exchange of the goods or
properties, excluding the VAT.
 The excise tax, if any, on such goods or properties shall
form part of the gross selling price.
(2) The ff sales by VAT-registered persons shall be subj to (0%) rate:
Note: For goods, a rate of 0% of the gross selling price will be
applied if:
a. Export Sale
b. Sales to persons or entities whose exemption under
special laws, or international agreements to which the PH
is a signatory (effectively-zero rated sales)
(a) EXPORT SALES:
(1) The sale and actual shipment of goods from the Philippines
to a foreign country, irrespective of any shipping
arrangement that may be agreed upon which may
influence or determine the transfer of ownership of the
goods so exported; and
Paid for in acceptable foreign currency or its equivalent in
goods or services, and accounted for in accordance with
the rules and regulations of the Bangko Sentral ng Pilipinas
(BSP);
(2) Sale and delivery of goods to:
a. Registered enterprises within a separate customs
territory as provided under special laws; and
b. Registered enterprises within tourism enterprise zones
as declared by the Tourism Infrastructure and
Enterprise Zone Authority (TIEZA) subject to the
provisions under RA 9593: The Tourism Act of 2009.
(6) The sale of goods, supplies, equipment and fuel to persons
engaged in international shipping or international air
transport operations: Provided, That the goods, supplies,
equipment and fuel shall be used for international shipping
or air transport operations.
Note:
(3) Sale of raw materials or packaging materials to a
nonresident buyer for delivery to a resident local export-
oriented enterprise to be used in manufacturing,
processing, packing or repacking in the Philippines of the
said buyer’s goods and paid for in acceptable foreign
currency and accounted for in accordance with the rules
and regulations of the (BSP);
(4) Sale of raw materials or packaging materials to export-
oriented enterprise whose export sales exceed (70%) of
total annual production;
(5) Those considered export sales under EO 226: Omnibus
Investment Code of 1987, and other special laws; and

 Par. (3), (4), and (5) Subject to the (12%) VAT and no longer be
considered export sales subject to (0%) VAT rate upon
satisfaction of the following conditions:
1. Successful establishment and implementation of an
enhanced VAT refund system that grants refunds of
creditable input tax within (90) days from the filing of the
VAT refund application with the Bureau:
- To determine the effectivity of item no. 1, all
applications filed from January 1, 2018 shall be
processed and must be decided within (90) days from
the filing of the VAT refund application; and
2. All pending VAT refund claims as of December 31, 2017
shall be fully paid in cash by December 31, 2019.
 Department of Finance shall establish a VAT refund center in
the (BIR) and (BOC) that will handle the processing and granting
of cash refunds of creditable input tax.
 An amount equivalent to (5%) of the total VAT collection of the
BIR and the BOC from the immediately preceding year shall be:
a. Automatically appropriated annually; and
b. Treated as a special account in the General Fund or as
trust receipts for the purpose of funding claims for VAT
refund:
- Any unused fund, at the end of the year shall revert
to the General Fund.
 BIR and the BOC shall be required to submit to the
Congressional Oversight Committee on the Comprehensive
Tax Reform Program (COCCTRP) a quarterly report of all
pending claims for refund and any unused fund.
(b) Sales to persons or entities whose exemption under
special laws or international agreements to which the
Philippines is a signatory effectively subjects such sales to
zero rate.
(B) Transactions Deemed Sale – SUBJ TO VAT
(1) Transfer, use or consumption not in the course of business of
goods or properties originally intended for sale or for use in
the course of business;
(2) Distribution or transfer to:
(a) Shareholders or investors as share in the profits of the
VAT-registered persons; or
(b) Creditors in payment of debt;
(3) Consignment of goods if actual sale is not made within (60)
days following the date such goods were consigned; and
(4) Retirement from or cessation of business, with respect to
inventories of taxable goods existing as of such retirement or
cessation.
(C) Changes in or Cessation of Status of a VAT-registered Person.
TAX RATE: 12% of the gross selling price or gross value in money of
the goods or properties sold, bartered or exchanged shall apply to:
 Goods disposed of or existing as of a certain date if under
circumstances to be prescribed in rules and regulations to be
promulgated by the Secretary of Finance, upon
recommendation of the Commissioner, the status of a person
as a VAT-registered person changes or is terminated.
(D) Determination of the Tax
(1) The tax shall be computed by multiplying the total amount
indicated in the invoice by (1/11).
(2) Sales Returns, Allowances and Sales Discounts.
 The value of goods or properties sold and subsequently
returned or for which allowances were granted by a VAT-
registered person may be deducted from the gross sales or
receipts for the quarter in which a refund is made or a
credit memorandum or refund is issued.
 Sales discount granted and indicated in the invoice at the
time of sale and the grant of which does not depend upon
the happening of a future event may be excluded from the
gross sales within the same quarter it was given.
(3) Authority of the Commissioner to Determine the
Appropriate Tax Base
 The Commissioner shall determine the appropriate tax
base in cases, by rules and regulations prescribed by the
Secretary of Finance,
(a) Where a transaction is deemed a sale, barter or
exchange of goods or properties under Subsection
(B), or
(b) Where the gross selling price is unreasonably lower
than the actual market value.
Sec. 107 Value-added Tax on Importation of Goods.
(A) In General.
TAX RATE: 12% VAT on Every importation of goods, whether for use
in business or not
TAX BASE:
a. Total value used by the BOC in determining tariff and customs
duties, plus:
I. Customs duties,
II. Excise taxes (if any); and
III. Other charges, such tax to be paid by the importer prior to
the release of such goods from customs custody:
b. Based on Landed Cost – where the customs duties are
determined on the basis of the quantity or volume of the
goods.
LANDED COST meant:
a. Invoice Cost
b. Freight Insurance
c. Custom Duties
d. Excise Tax (If any); and
e. Other charges prior to the removal of the goods from customs
custody.
(B) Transfer of Goods by Tax-exempt Persons.
 When a (Person/Entities/Agencies) who was exempt from VAT
on his importation – subsequently sells, transfers, exchanges in
the Ph such imported articles to a non-exempt person.
 The purchaser, transferee or assignee will be required to
pay the VAT.
 The tax due on such importation shall constitute a lien on the
goods superior to all charges or liens on the goods, irrespective
of the possessor.
Note:
 VAT of an importation should be paid prior to the release of the
goods from customs custody – If it is subject to both excise tax
and VAT, Taxpayer has to pay both prior to the release.
 Seller of goods/services who imports stuff can claim the VAT
paid on importations, during a taxable period as input taxes
creditable against the output taxes on the sales of the same
period.
 Same rule applies to technical importation of goods
a. Sold by a person (located in a special economic zone) to a
customer (located in a customs territory)
 7) Proprietors, operators or keepers of hotels, motels,
resthouses, pension houses, inns, resorts;
Example: 8) Proprietors or operators of restaurants, refreshment
FACTS: A sold B a shirt. parlors, cafes and other eating places, including clubs and
A: B shoulders 12% VAT. B can recover the amount he paid to caterers;
A by selling the shirt to C, where C will shoulder the 12% 9) Dealers in securities;
VAT 10) Lending investors;
11) Transportation contractors on their transport of goods or
ZERO RATED TRANSACTIONS EXEMPT TRANSACTIONS cargoes, including persons who transport goods or cargoes
(EXEMPT WITH CREDIT) (EXEMPT WITHOUT CREDIT) for hire and other domestic common carriers by land
 There is a TOTAL RELIEF for  There is a PARTIAL RELIEF relative to their transport of goods or cargoes;
the purchaser (C) from the because Seller (B) is not 12) Common carriers by air and sea relative to their transport
burden of tax since he does allowed any Tax Refund or of passengers, goods or cargoes from one place in the
not have to pay any VAT on Credit for input taxes paid Philippines to another place in the Philippines;
the transaction on his purchases from his 13) Sales of electricity by generation companies, transmission
supplier A by any entity, and distribution companies, including
 Seller (B), the input tax on electric cooperatives;
his purchases from his 14) Services of franchise grantees of electric utilities,
supplier (A) telephone and telegraph, radio and television broadcasting
and all other franchise grantees except those under Sec
 Available as a Tax 119, NIRC;
Credit/Refund 15) Non-life insurance companies (except their crop
insurances), including surety, fidelity, indemnity and
 Purpose: To exempt the bonding companies; and
transactions completely 16) Similar services regardless of whether or not the
from VAT previously performance thereof calls for the exercise or use of the
collected since input taxes physical or mental faculties.:
passed to him may be 17) The lease or the use of or the right or privilege to use any
recovered as refund or copyright, patent, design or model, plan, secret formula or
credit process, goodwill, trademark, trade brand or other like
property or right;
1) NORMAL VAT TRANSACTIONS 18) The lease or the use of, or the right to use of any
 VAT paid to the supplier can be recovered by selling the industrial, commercial or scientific equipment;
product to a purchaser. 19) The supply of scientific, technical industrial or commercial
knowledge or information;
Example: B paid A P112 (P100 Price and P12 as VAT) then B sold C 20) The supply of any assistance that is ancillary and subsidiary
the shirt for P150. to and is furnished as a means of enabling the application
 B can recover P12 VAT by selling the product to a or enjoyment of any such property, or right as is
purchaser. Here, B sold the shirt C for P150. In his sale, he mentioned in subparagraph (2) or any such knowledge or
received P18 which covered P12 he paid to A. information as is mentioned in subparagraph (3);
21) The supply of services by a nonresident person or his
2) VAT-ZERO RATED employee in connection with the use of property or rights
 Can apply for a refund/tax credit of P12 with the BIR. belonging to, or the installation or operation of any brand,
machinery or other apparatus purchased from such
Example: B paid A P112 (P100 Price and P12 as VAT) then B sold C nonresident person;
the shirt for P150 Price and P0 as VAT. 22) The supply of technical advice, assistance or services
 B can recover P12 VAT by applying for a refund/tax credit rendered in connection with technical management or
with the BIR administration of any scientific industrial or commercial
undertaking, venture, projector scheme;
3) VAT-EXEMPT 23) The lease of motion picture films, -films, tapes and discs;
 Cannot apply for a refund/tax credit of P12 with the BIR. and
24) The lease or the use of or the right to use radio, television,
Example: B paid A P112 (P100 Price and P12 as VAT) then B sold C satellite transmission and cable television time.
the shirt for P150 Price and P0 as VAT.
 Unrecovered VAT in exempt transactions is considered LEASE OF PROPERTIES – subject to the tax, irrespective of the place
cost. where the contract of lease or licensing agreement was executed, if
the property is leased or used in the Philippines.
Sec 108 VAT on Sale of Services and Use or Lease of Properties
GROSS RECEIPT – means cash or its equivalent actually received or
(A) Rate and Base of Tax: (12%) of gross receipts derived from the constructively received (not including the VAT) as:
sale or exchange of services, including the use or lease of properties. a. Payments on the Contract price, compensation, service fee,
rental or royalty,
b. Payments or materials supplied with the services and
SALE OR EXCHANGE OF SERVICES:
c. Deposits and advanced payments on the contract for the
 The services:
services
a. Should be rendered in the PH
b. Can be any and all kinds of services rendered to others
Note:
(Provided there is no EE-REL)
CONSTRUCTIVE RECEIPT – occurs when the money consideration or
c. There is a fee, remuneration or consideration
its equivalent is placed in the control of the person who rendered
the service without restriction by the payor.
 It includes those performed or rendered by:
 Ex: Bank Deposit; Issuance by the DR of a notice to offset
1) Construction and service contractors;
any debt or obligation and acceptance by the seller as
2) Stock, real estate, commercial, customs and immigration
payment for the services rendered
brokers;
3) Lessors of property, whether personal or real;
4) Warehousing services;
5) Lessors or distributors of cinematographic films;
6) Persons engaged in milling, processing, manufacturing or
repacking goods for others;
 Gross receipts do not include amounts earmarked for payment
to unrelated 3rd parties or received as reimbursement for 5. Services performed by subcontractors and/or contractors in
advance payment on behalf of another which do not redound processing, converting, or manufacturing goods for an
to the benefit of the payor enterprise whose export sales exceed (70%) of total annual
 It is considered payment to a 3rd party if the same is made production;
to settle an obligation of another person (like customer or
client) to the said 3rd party. Note:
 It is an advance payment on behalf of another if the  subject to the (12%) VAT and no longer be subject to zero
payment is to a 3rd party for a present or future obligation percent (0%) VAT rate upon satisfaction of the following
 UNRELATED PARTY shall not include the; conditions:
a. Taxpayer’s employees c. The successful establishment and implementation of an
b. Partners enhanced VAT refund system that grants refunds of
c. Affiliates creditable input tax within (90) days from the filing of the
d. Relatives by consanguinity or affinity within the 4th VAT refund application with the Bureau:
Degree; and  To determine the effectivity of item no. 1, all applications
e. Trust funds where the taxpayer is the trustor, trustee, filed from January 1, 2018 shall be processed and must be
or beneficiary, even if covered by an agreement to the decided within (90) days from the filing of the VAT refund
contrary application; and
d. All pending VAT refund claims as of December 31, 2017 shall
(B) Transactions Subject to (0%) Rate be fully paid in cash by December 31, 2019.
 The following services performed in the Philippines by VAT
registered persons shall be subject to zero percent (0%) rate:
6. Transport of passengers and cargo by domestic air or sea
1. Processing, manufacturing or repacking goods: vessels from the Philippines to a foreign country; and
a) For other persons doing business outside the Philippines
b) Goods are subsequently exported; and 7. Sale of power or fuel generated through renewable sources of
c) The services are paid for in acceptable foreign currency energy such as, but not limited to, biomass, solar, wind,
and accounted for in accordance with the rules and hydropower, geothermal, ocean energy, and other emerging
regulations of the (BSP); energy sources using technologies such as fuel cells and
hydrogen fuels.
Note:
 subject to the (12%) VAT and no longer be subject to zero 8. Services rendered to:
percent (0%) VAT rate upon satisfaction of the following I. Registered enterprises within a separate customs territory
conditions: as provided under special law; and
a. The successful establishment and implementation of an II. Registered enterprises within tourism enterprise zones as
enhanced VAT refund system that grants refunds of declared by the TIEZA subject to the provisions under RA.
creditable input tax within (90) days from the filing of the 9593:The Tourism Act of 2009.
VAT refund application with the Bureau:
 To determine the effectivity of item no. 1, all applications  Department of Finance shall establish a VAT refund center in
filed from January 1, 2018 shall be processed and must be the (BIR) and (BOC) that will handle the processing and granting
decided within (90) days from the filing of the VAT refund of cash refunds of creditable input tax.
application; and
b. All pending VAT refund claims as of December 31, 2017 shall  An amount equivalent to (5%) of the total VAT collection of the
be fully paid in cash by December 31, 2019. BIR and the BOC from the immediately preceding year shall be:
a. Automatically appropriated annually; and
b. Treated as a special account in the General Fund or as
2. Services other than those mentioned in the preceding trust receipts for the purpose of funding claims for VAT
paragraph, rendered to a: Refund
a) Person engaged in business conducted outside the - Any unused fund, at the end of the year shall revert
Philippines or to the General Fund.
b) Nonresident person not engaged in business who is
outside the Philippines when the services are performed  BIR and the BOC shall be required to submit to the COCCTRP a
c) The consideration for which is paid for in acceptable quarterly report of all pending claims for refund and any
foreign currency and accounted for in accordance with the unused fund.
rules and regulations of the (BSP);
Note:
3. Services rendered to persons or entities whose exemption ZERO RATED TRANSACTIONS EFFECTIVELY ZERO-RATED
under special laws or international agreements to which the TRANSACTIONS
Philippines is a signatory effectively subjects the supply of such DEF: Export sale of goods and DEF: Sale of goods or supply of
services to (0%) rate; supply of services services to persons or entities
whose exemption under special
4. Services rendered to persons engaged in international shipping laws or international
or international air transport operations, including leases of agreements to which the PH is a
property for use thereof: signatory effectively subjects
 These services shall be exclusive for international shipping such transactions to a zero rate.
or air transport operations;
The seller of such transactions Such Rate does not yield any tax
charges no output tax, but can chargeable against the
DESTINATION PRINCIPLE – exports are zero-rated whereas imports claim a refund or a tax credit purchaser.
are taxed. certificate for the VAT previously
charged by suppliers

For the Benefit of the Seller For the benefit of the purchaser
In both, the seller who charges zero output tax can claim a refund or
a tax credit certificate for the VAT previously charged by suppliers.

Sec 109 Exempt Transactions.
VAT-EXEMPT TRANSACTIONS – the sale of goods or properties
and/or services and the use or lease of properties that is not subject
to VAT (output tax) and the seller is not allowed any tax credit of
VAT (input tax) on purchases.
(1) Subject to the provisions of Subsection (2) hereof
 the following transactions shall be exempt from the VAT:
(A) Sale of agricultural products; marine food products in their
original state, livestock and poultry of a kind generally used as,
or yielding or producing foods from human consumption; and
breeding stock and genetic materials therefor.
Products classified under this par shall be considered in their
original state even if they have undergone the simple
processes of preparation or preservation for the market such
as freezing, drying, salting, broiling, roasting, smoking or
stripping. Polished and/or husked rice, corn grits, raw cane
sugar and molasses, ordinary salt and copra shall be
considered in their original state.
Note:
LIVESTOCK – does not include fighting cocks, race horses, zoo
animals and other animals generally considered as pets.
ORIGINAL STATE – include even if the products have
undergone the simple process of preparation or preservation
for the market.
RAW CANE SUGAR – natural sugar extracted from sugarcane
through simple mechanical process.
 It only refer to raw cane sugar produced from conducting
only 1 stage of filtering and centrifuging without any other
further process applied thereto
(B) Sale or importation of fertilizers; seeds, seedlings and
fingerlings; fish, prawn, livestock and poultry feeds, including
ingredients, whether locally produced or imported used in the
manufacture of finished feeds (except specialty feeds for race
horses, fighting cocks, aquarium fish, zoo animals and other
animals generally considered as pets)
Note:
SPECIALTY FEEDS – non-agricultural feeds or foods for race
horses, fighting cocks, aquarium fish, zoo animals and other
animals generally considered as pets
(C) Importation of personal and household effects belonging to
the residents of the PH returning from abroad and non-
resident citizens coming to resettle in the PH
 Such goods are exempt from customs duties under the
Tariff and Customs Code
(D) Importation of professional instruments and implements,
tools of trade, occupation or employment, wearing apparel,
domestic animals, and personal and household effects (Except
vehicles, aircrafts, machineries and other similar goods for use
in manufacture – subject to duties, taxes and other charges)
 Belonging to:
a. Persons coming to settle in the Philippines or
b. (Overseas Filipinos) Filipinos or their families and
descendants who are now residents or citizens of
other countries
 in quantities and of the class suitable to the profession,
rank or position of the persons importing said items, for
their own use and not for barter or sale, accompanying
such persons, or arriving within a reasonable time:
- BOC may, upon the production of satisfactory
evidence that such persons are actually coming to
settle in the Philippines and that the goods are
brought from their former place of abode, exempt
such goods from payment of duties and taxes:
(E) Services subject to percentage tax under Title V;
(F) Services by agricultural contract growers and milling for others
of palay into rice, corn into grits and sugar cane into raw
sugar;
(G) Medical, dental, hospital and veterinary services except those
rendered by professionals;
Note:
 Laboratory services are exempted. But if hospital or clinic
operates a pharmacy or drug store, the sale of drugs and
medicine is subject to VAT
 Health care company which merely provides and arranges
for the provision of pre-med health care services to its
members in NOT VAT-EXEMPT. It does not provide
medical services.
(H) Educational services rendered by private educational
institutions, duly accredited by the (DepEd), (CHED), (TESDA)
and those rendered by government educational institutions;
Note:
 Educational services do not include seminars, in-service
training, review classes and other similar services
rendered by persons who are not accredited by the
DEPED, CHED or TESDA
(I) Services rendered by individuals pursuant to an employer-
employee relationship;
(J) Services rendered by regional or area headquarters
established in the Philippines by multinational corporations
which act as supervisory, communications and coordinating
centers for their affiliates, subsidiaries or branches in the Asia-
Pacific Region and do not earn or derive income from the
Philippines;
(K) Transactions which are exempt under international
agreements to which the Philippines is a signatory or under
special laws, except those under PD 529;
(L) Sales by agricultural cooperatives duly registered with the CDA
to their members as well as sale of their produce, whether in
its original state or processed form, to non-members; their
importation of direct farm inputs, machineries and equipment,
including spare parts thereof, to be used directly and
exclusively in the production and/or processing of their
produce;
(M) Gross receipts from lending activities by credit or multi-
purpose cooperatives duly registered with the Cooperative
Development Authority;
(N) Sales by non-agricultural, non-electric and non-credit
cooperatives duly registered with the Cooperative
Development Authority: Provided, That the share capital
contribution of each member does not exceed (₱15,000) and
regardless of the aggregate capital and net surplus ratably
distributed among the members;
(O) Export sales by persons who are not VAT-registered;
(P) Sale of real properties not primarily held for sale to customers
or held for lease in the ordinary course of trade or business or
real property utilized for low-cost and socialized housing as
defined by RA 7279: Urban Development and Housing Act of
1992, and other related laws, residential lot valued at
(1,500,000) and below, house and lot, and other residential
dwellings valued at (₱2,500,000) and below: Provided, That
beginning January 1, 2021, the VAT exemption shall only apply
to sale of real properties not primarily held for sale to
customers or held for lease in the ordinary course of trade or
business, sale of real property utilized for socialized housing as
defined by RA. 7279, sale of house and lot, and other
residential dwellings with selling price of not more than
(₱2,000,000): Provided, further, That every (3) years
thereafter, the amount herein stated shall be adjusted to its
present value using the Consumer Price Index, as published by
the Philippine Statistics Authority (PSA);
(Q) Lease of a residential unit with a monthly rental not exceeding
(₱15,000);

(R) Sale, importation, printing or publication of books and any

newspaper, magazine, review or bulletin which appears at
regular intervals with fixed prices or subscription and sale and
which is not devoted principally to the publication of paid
advertisements;

(S) Transport of passengers by international carriers;

(T) Sale, importation or lease of passenger or cargo vessels and

aircraft, including engine, equipment and spare parts thereof
for domestic or international transport operations;

(U) Importation of fuel, goods and supplies by persons engaged in

international shipping or air transport operations: Provided,
That the fuel, goods, and supplies shall be used for
international shipping or air transport operations;

(V) Services of bank, non-bank financial intermediaries performing

quasi-banking functions, and other non-bank financial
intermediaries;

(W) Sale or lease of goods and services to senior citizens and

persons with disability, as provided under RA. 9994 (Expanded
Senior Citizens Act of 2010) and 10754 (An Act Expanding the
Benefits and Privileges of Persons With Disability),
respectively;

(X) Transfer of property pursuant to Section 40(C)(2) of the NIRC,

as amended;

(Y) Association dues, membership fees, and other assessments

and charges collected by homeowners associations and
condominium corporations;

(Z) Sale of gold to the (BSP);

(AA) Sale of drugs and medicines prescribed for diabetes, high

cholesterol, and hypertension beginning January 1, 2019; and
(BB) Sale or lease of goods or properties or the performance of
services other than the transactions mentioned in the
preceding paragraphs, the gross annual sales and/or receipts
do not exceed the amount of (₱3,000,000).