- Importation, local purchases, lease or use of properties - Usually reflected as a separate item in the VAT invoice or VAT official receipt issued by the VAT-registered supplier - INPUT VAT of the Buyer = Output VAT of the supplier - If not billed separately = SP is deemed to be inclusive of VAT same if VAT is erroneously billied
Requisites of a Creditable Vat
1. Incurred in the course of trade and business
2. Evidence by a VAT invoice or official receipt 3. Issued by VAT-registered person 4. Incurred in relation to vatable sales not exempt sales
Types of Input VAT
1. Transitional Input VAT
- Initial Input Tax Credit equivalent to 2% of the beginning inventory of goods, materials, or the ACTUAL VAT paid whichever is higher - For persons who become liable to value-added tax or any person who elects to be a VAT- registered person - Goods exempt from VAT shall be excluded in the computation - BASED on the vatable beginning inventories in the month of registration as a VAT taxpayer - Operates to benefit newly VAT-registered persons whether or not they paid taxes on the acquisition of their inventory - Applies only to beginning inventory, excluding equipment - Before computing for inventory Input VAT must remove first from the Invoice of Purchased inventory - Claimable in the month of registration as a VAT taxpayer
NOTE: Non Vat taxpayers are not allowed to claim INPUT VAT hence it is added to their expenses. However their sales of pre-VAT registration become instantly vatable after they registered as VAT Taxpayers
Requisites for Claim of Transitional Input VAT
1. Submit an inventory list of goods
2. Prepare an entry recognizing the transitional input VAT credit in his accounting books Regular Input Vat
a. 12% VAT on Domestic purchase of goods services or prop
b. Importation of goods and services
Purchase of Goods and Prop – Claimed on month of purchase
Purchase of Services – In the month paid
Importation of Goods – In the month VAT is paid
Purchase of depreciable capital goods
- General treatment: Didn’t exceed 1,000,000 = month of purchase
- Exceed 1,000,000 = deferred and amortized over the useful life in months or 60 months which ever is shorter
National Capital Region Schools Division Office Novaliches High School MAPEH Department Definitive Budget of Work for Blended Learning Modality Quarter 1 Grade 10