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  • Destination Principle

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    Sallen Daison
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    Under the Destination Principle, goods and services are taxed in the country where they are consumed rather than where they are produced. Exports are not subject to VAT since they are consumed outside the taxing country, while imports are taxed. The cross-border principle followed by the BIR also means that no VAT is imposed on goods destined for consumption outside the Philippines, including exports to foreign countries and special economic zones.

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    Under the Destination Principle, goods and services are taxed in the country where they are consumed rather than where they are produced. Exports are not subject to VAT since they are consumed outside the taxing country, while imports are taxed. The cross-border principle followed by the BIR also means that no VAT is imposed on goods destined for consumption outside the Philippines, including exports to foreign countries and special economic zones.

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    18 views1 page

    Destination Principle

    Uploaded by

    Sallen Daison
    Under the Destination Principle, goods and services are taxed in the country where they are consumed rather than where they are produced. Exports are not subject to VAT since they are consumed outside the taxing country, while imports are taxed. The cross-border principle followed by the BIR also means that no VAT is imposed on goods destined for consumption outside the Philippines, including exports to foreign countries and special economic zones.

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    © All Rights Reserved
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    Destination Principle

    Under this principle, goods and services are taxed only in the country where these are
    consumed. Thus, exports are zero-rated, but imports are taxed.

    Under the cross-border principle of the VAT system being enforced by the Bureau of Internal
    Revenue (BIR), no VAT shall be imposed to form part of the cost of goods destined for
    consumption outside of the territorial border of the taxing authority. If exports of goods and
    services from the Philippines to a foreign country are free of the VAT, then the same rule holds
    for such exports from the national territory — except specifically declared areas — to an
    ecozone.

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