NE" ‘chapter 7— The Regular Output VAT 7 ~The Regular Output VAT CHAPTER 7 i= maine ‘THE REGULAR OUTPUT VAT cesar pamescctcaen "ioe taresocestomers nS) 0000 oper Overvewandoneces testo stoner ‘This chapter dacusses the detailed rales of 1236 output VAT on va sales of gods, services, or properties, Sling price and output VAT areas flows ‘er this chapter, readers are expected to have comprehended: a 200000 1 re output VAT and the VAT base on the sales of pods eas anoooeuet), 190400 2. Output VATand the VAT bass on the sales of services charges ected 00100 4. The ouput VAT on the sles of properties eh gaan ‘4. The transactions deemed aes 5000 5. The reporingof ouput VAT ae ower sling price sou OUTPUT VAT Prices unreasenaly lower, the VAT sk cnc of wale poe sede la "the VAT shall be based on the ait 1. Sale of atable goods 2 Sle afvatabe services 4. Sale of vatabe properties Sone seemed inrasoabiy lower when is ower by ‘4 Transactions deemed sles 2 market vale ofthe goods sl. The fa a shal deterined bythe Commission florea haat fone ofthe parties is th eo 's the government, he output VAT shall sling price (Sec 7, Re4z007,, VAT stallbe Gross sling price unless a aa Imad the following sales of goods to private customers daring the The following table an overview ofthe tax basis ofthe VAT 2 Sale of services Gross resis i ‘4 Transactions deemed sales_| Fair valu of the property “ie Pte ; 200000 " 190000 ——10z000 SSALEOF VATABLE GooDS 150,000 ‘The sale of goods ls subject to 1296 VAT based on gross sel Unless unreasonably lower Gross selling price s simply refered to as gross sales You i ‘evs the concept of gross selling pce in Chapter 3. astration 402000 150,000 Inu 2020, Mabaca Corporation made the flowing ses isan 1a 000 228 ei‘chapter 7—The Regular Output VAT erie neue oop te Th sling pst Customer Cs reasonably lower eae the Nesta va -Callection brsercscenered 250000 stra 200.000 Iastration2 es, 7 an see resller mae the following sles at unreasonably lower _— 150,000 prices: AT cm ‘Sellngprice aca cay orSantermando P184000 P 200000 of ouput VAT reporting MicTradingcompany 100500 150000 VAT onthe sale of vatable services is reported inthe month of “rhe tax basis and output VAT sal be computed as ‘VATABLE PROPERTIES barter or exchange of vatabl real properties i subject to VAT on siesta Stlingrice Bncvalue, Taxable Tryattenints Gort) PF 1s4000 F 200000 F 134000 Bee oc Cyt temaprdar) 10000 150.000 —_1s0000 (74 Toxbass P2040 the rguatons gross selling price” means the h Maps ts (orsideration or sling means a ‘utputVAT Eon 1 eet Paurvale of te propery Note: Tei value on sles at nreszonaly lowe sting rcs des ‘Shsmade othe goverment IR rae oe propery ther betwen he fluerand — ak wie ‘Timing of Output VAT reporting, Spcronastccast Fn VAT onthe sl of vatabe goods i reported inthe month Fc of zonal value, "gross sling pric” shall mean the fir value ‘SALE OF VATABLE SERVICES or consideration stated inthe sles document, whichever s ‘Shea of services is subject to 12%6 VAT based on the gross Toe sa tpt election of income. You may revs the concept of sling pices based. feceiptin chapter 3ifneeded. 1 ‘on the zonal vale o assessor's flr value ty, the zonal value or assessed value shall be presume Iastration var. hall be presumed INA rgtered repairman the service provider ha the llowing Andeoletion duringtne month eal property dealer, sold a commercial oti Jane 2020. The late tote sale Bilingformatcrals —P 200000 F 70000 TD 450,000 Servieetee * opooe sooo __sao00 ‘000,000 Toul E-aonoo B—Asow P.—s0.000 ae 2500000 ; $300,000 (nef = mark not et started on PS. 000 conta ‘avances Lo 209009 ling price and the output VT shall be: “The gost recep includes advances and collection of amount char price (airmarker value) P $000,000, Ths Reva ncladed with the service ia e—4an000 a 20‘chapter 7 The Regular Outpt VAT 7 ~The Regular Ovtput VAT Seow ac mare ve ithe VAT nse higher than he P28 sling 2 Thetarvaue sty mipiotby 1c beenuve is doomed exw And the “The output VAT on the sale of Ihe far market vale I higher than the sling price the output VAT sellingprice | Goodsis computed | Real propertyis be separately billed with specie mention thatthe VAT billed separ sere o oh based om the marke value of the property: | Fiano | paaooye ro leadnatei 00 P00 126 | ProNno0 12% Ifthe gross sling price Is based on the consideration appearing P-60,000- fl, P 100000 Pe a document ofsl, the ames presumed to be inclusive of VAT. 10000126 1000003 236 Mastration Mir Realtor, areal property dealer, sold commercial lot In fune 202 folowing data relate to the sae ot uresonaby ler does ot 9p onthe sale of rope etter valve and sling pies sway the baie he VAP (Output VAT reporting ‘onal value 44900.000 VAT onthe sal of vtable properties i reported inthe month of ‘Assessor faivalue $3500.000 nsallment method. es me Selig pce 14236000 porting of Output VAT on real properties ‘The ros sling price andthe output VAT shall be: NAT on the sale of real properties may be reported in he ntl payment trom such sale it doesnotexceed 25% of Grossscing price (consideration) P 4.256.000 initial aye ceed 259% of Many aii pre. Outpt Eascou 42020,» real propery desir sold commercial ot with the Te cnieraton or sting rie she rom eng pice sce ts ih ava 2. Theconteation eng pric upd by 12/112 bes 000,000 ‘heregulin beac eaten 5.00000 Another ilstation DEF Realty Corporation, « VAT-reqistered realty dealer, sold the Bt of 500,000 was paid with the balance due In 36 moathiy ‘sidental properties during the moat FP 125000 starting September 1, 2020, Zonal Asse. Sling 000% 12%) Value “Value Brice — ezzno00 Residential ot 7 1s00000 F-20000 P 1.700,000, ere: Residential dweling —" 2000,000 1,500,000 3,00,000, ‘hal be projected unl the end of the yer of sl o determine Es nal payment ‘Te output VAT sh Recall from Chapter 4 that he sal of 3 Tetisentmpetfsld ata price not exceding 1919 500. The sale ofa Imitating ing also exempt the sling price doesnot exced 3.199.200 Pament_ Pritt Seine eet ate own payment 800,000 ‘Comparison ofthe VAT on goods and VAT on properties Ttimust be noted thatthe term selling price” ot consideration om propery Is lgally presumed VAT inclusive but this snot the: Este of goods. A20mosthy payment "12600 mony payment” 125000 ANOmonthly payment 125000 Gotomontiy payment __12snon Perr Eaoaa0n jr 3000000 20% 22 aECC ’HHLmU | ‘chapter 7—The Regular Output VAT 7 Th Reg Outpt var ‘the rato doesnot exceed 25%. The sale qualifies 2 sale onthe installing Brora output VAT in the third and Trash utp VAT onthe sal maybe reported i instants. «Tn the third and fourth quarters of 2020 shall be: Reportable Outout YAT pana ct VAT In each month under the installment metbod ‘reomputed as Tap eter —— thar var ie (aust Sea tat nae Sep eetrerteretanen syment/Seling ice xOutaat VAT Mie Ca YA rere a the month sale Henn ‘og 2020 00/000/"5 000,00 720,000, me spa VAT rer Samember 2020 P125,000/05,000,000 xF720,000 Is panettee and mth ner and penalties actual ly or constructive subjen to V Wy received by the seller are “Te bilingfor every monthly installnet terete halle esto VAT, by the sll Installment P 125000 By 0) Pls: Output VAT 000 a Yitepayes made a ale of el pro ‘otal monty bing starting September B—143,000 FEA0000.The Reena POPE with a fr value of See Sear, repeing 160,000 outpt VAT onthe sale qualified for ‘Te reportable Outpt VAT in the third and fourth quarters of 2020 shall ” Saragan! is eto receive the flowing et of VA: tlt cure Fh ure —— = ih eso sao Eko ran ” a0 oupavar EM AGG pia Eitan Ha % rou vat MO pean ad ELRAGD ONDA VAT on his colction ha ‘sae of property bya realty dealer ono deferred payment basis ection shal be Px 200,000 Se ne of property by a zal dealer on a deferred payment ba inne /Pzc00000xF360000 P 36000 {he natalie plan shal be treated 2s a cas sl. The fa va Ezaco 6000, sehing price whichever higher subject to VAT i the month 22% Suboentcllectons rom the sl stl no longer be sbjeted =” istration eile by Sarangan shal be Du kaput, 202, Bcc Realty Corporation sold esdentl fa tee auto P5000 for 000,00. The ems of he 200000 ‘hampeyeent of P400,000 athe blanc payole oon 12000 200,000 starting Septem 30, 2020. ee veput VAT (P5000000%12%) 6000 oa i Ease if tiatnmen Pasmeat {eg 200 downpsment "008 September 302020 realinent 20000 ‘Sette 31,2020 itn 201000 November 92020 stanent ono00 December 31,2020ineament 20000 to the taxpayer Ina pment Exao0000 77 4000000 by Ra 2007). 2 “aes‘chapter 7—The Repular Output VAT ‘Therefore the sale of properties held for se ordinary assets) sch ‘ulin equipment, machineries, property improvements, ands tt gon ¥ actos tide ecm inventories and suplles ae vatable cea ma oad et a whether captal goods ste nro, Suapcy oa dey rete Boccia cine ee a ‘The sales of properties not the ordinary course of busines are ‘owner or successor tthe business s continued by Tet ese esa ofp ats exempt Fo VA of tsa a VAT regtered person Iostration eee yr aVAT eae lth flowing pets o r q ‘Me tsed for prose ther tacary ok se = P1000). F 120000 dd pare ih ve ‘Vacant ot held as invest ‘n00.000 held forsale are no longe sold but are transfered tyr heron Tye ouput VAT sal be computed as js ria = fel disposed oor xen er Selling price of old factory 1,300,000 nged with other properties. say be oT conemptions aint core of bie et a ay he ans owner see fhe or me ean the le the lft sab suet to repr ince a is el re Fee art aca sl ete subject VAT because cpa ion enpago) ‘nelle abet te oh papas Berra ree enamel: query: What Hil Foods Corporation sa now-VAT taxpayer? a ens hel for usefor ther properties Beeston al factory sha not be sujet to VAT. The VAT on Aspial of roperis held for tar in change or cs ‘rdnary Sots applies ony 0 VAT registered txpayers. o or ter Properties held for us to pay of debs with runs nenE ss [Pa opr te tg Sec ti nok et op See mops) eh marl = roma FMS BN ma ey aed lod pe i og Zaceatta pirat eae ml i List of Transactions deemed sales: 1. Transfer, se, o consumption not in the course of business a ‘or properties originally Intended for-sale oF for usin the pete oa newly organized company, Bl Company : , fhe commercial te lot a property held or sale forsharsof stocks bjectto VAT. The output VAT sal be P4000, computed stsna 7-The Repl Out VAT chapter ~The Regular OU tk rr mn thr properties hl by DE hal na be cored pe ser este inventory and herein transfer ofthe ome. Tesoro ae few ‘nine ts dsentand separate fom lsshrchoion irene a me exchange of real extate properties by ABC i wi i sume eee i Properties by ABC ia watable le, Touts — ite result in the acquisition of corporate control, F 1 er othe busines distin ral “oe up Vo te dened sesh compat or —T ms nate cldaion | There ass Soo ke wai | pascnaaeaeete iin emetA a, tes VAT hres no sins stn Ba Fe eds aoe vai aaa ermede —| mon or:oeckton Pai non denned ales apes nyo vale gods and enti a ett ie ne te tri meh ah lissolution of a corporation and Seater aio se heer Sa i a cn aad on se sera aoe showever, the dissolution of a cc eat si tm cen es ane ere rt te Ea sujet to VAT on deemed sale oper cgay mance Generale Busines dsouon deemed le re ore re inthe Busnes. nd Serre msc en he ingore ey oe toa ake epee ello at comnts tte ses Mf bases acy fom VAT satus to VAT xem 1 Cane towne orp " Cans encase popes 5 Sips pep then faq cancelation frat de even son are na 2 Dison of Pepper partnership which kes ver the Hot request for cancelation of eltration die to a desire to = piscina ns eh Motxempt se ater pe of come oe eee onporation is nota deemed sale. The poration ayo he date Of merger OF shall be absorbed by the surviving corporation. = sna dsotton, there nde le Ie by nn vlna opel Sop en ere sno business so re isn a Sts for canestatn of repistaton of one who weet meee cher wed business with the ex; fe ‘ 2 Change in rade oF corporate name tation of ross sales oF receipt 3,000,000 but who fated 17055 sae : 3 Change in business address led exceed ie aunt drag ‘months of operations i iene ce oy transactions demed ses Mat amet oer Yoko dered ales trasscns hal be eon the market tae Pear kg al oir sed as oft ocrencet deemed sic oes a.Chapter 7=The Regular Out VAT 7 ~The Regular Output VAT in the stocks of BH 7... ery: What the Gt Realty cated contro qn whe merc salt exept fom VAT St, ms . The arter of pahee change tat a VAT exempt ans oper yconsgnecs 500,000 “ = = Inbal consignors 150.000 jorncome on goods sldfor consignors “an” 2.000 eros sm rd a rope hl fo lf sk Se A er an edgy hd nom a 00000 a 1 recs fot Sen oan athe dat ot alow consignments sl held by conaignces as of ‘Te comple gt sa dered dle subject to VAT. The output VAT yoo 008 computed a 12% P2500. 000 pow 120.000 ‘query 1: What tbe donations designated by the ee IAT fan Tbe considered “deemed soll ther AT shall be computed as Ta oa Aer he propery, The transmission of Property t= Tus - P 500,000 of ers oe A te prot sto be merely eld In rust he naverteneiry Beonsignees 150,000 cin: “query 2: Whot te donce san ecredited no profit organization” ocr 2: wen Transfer to an acre nan ro esti ect VAT, too $7000 «12% (Fabry) P S0000 «12% ue 2 —aea00 stration Fe istration jon declared. the following properties for dst yn he aes an oe made yg Shareholders as property dividends: shuresofstacksin Makati Corporation F 2.000000 Vorious merchandise Total Son0.00 te cao Carperaton shal be bet '9 23800 gat VAT. comput ce percha hal be dered ld ste 1 VAL 7. tae VAT on dared esac = ae es coe eal ls fos VAT E00 pe persocl coos ess thes o cern See ainrge pillage palebenl om ies wher a othe mc wil be te thin 60 Fal gn or properseso ne stores snes tthe persona se or GBnaigned goods to consinees, OF owners. Hence, tis also “deemed sale Grenuned ar deemed sold subject VAT. ‘Tis snot an actual consumption, but te rule apparent i is continued by ‘owner, the gods or properties ofthe Thi ages trom eer. rection of tat VAT pepe aiayed reportngot te sae on consent, ly 01 to the new one, Hone business are Mews dened sd Imustration IAVAT rostered taxpayer hough cosines els sell goods on ‘heating were the results of perations For tas ts own sles operations but ait ‘consgument 0 the month ended Ap Watsrogtered taxpayer, ceased properties upon termination business pean uce” sins eperation elude cao _—chapter 7—the Regular Output VAT 7 ~The Regular Output var mentor cessation of business shal be . rent market price of the goods sso. sgn ding the rant However nthe case of ei ‘nthe acquisition costs oF the CU properties whichever is lowe aeration istration ce cogitered taxpayer ceased busines operation wih {Sowing properties bok a far ales andsing busines, made the owing sa ch ae ETT ek sha pp ox 900 apy ny te 200000 fecountrecelables 120000 "120000 Ad 'the 0-day contgnmen 1 nt part of le ncn avestments {oo 490,000 art ofthe sas of non YA Inventories Zron0o 2s0an0 Froper, lt and equipment jonan. «00900 sents for Output VAT Tolan Eason VAT must be special Incted inthe VAT in ie oF rect ied spate atl In the eo re utpt VAT on the deed sl sabe computed he sag i he SE of eso properties where ther ead ae oe Saha re a a gee et ar Output VAT z36000 special agreement to the contrary ne VAT In the ; sod goods he quoted goods he quoted forsale at P1680, He shal compute his Determination of far value shall determine thea VAT inbis VAT nvace sto Pe Commmstonerof internal Revente tpasein ues where the +112) 2 ransacion sa deemed sale my _ gros selling pices unreasonably lower (Ple000 x 12/11 P 150000 Potent recep a tama > Eiosooo tnvoicing Requirement for Subsequent Sale of Goods oF tational procedures employed Deemed Sold Deemet gurl odor propre plas VAT, the seer of ease te VAT, Tce nvlee number wherein the out ze ao indicate tne ote and the corresponding tax paid ® the ey sal ainsstaspayers this i extent to avo forthe to accep an aut engagement to ac ai lent ata fe of P100000. crm sins tax on the subsequent sale This © ash 85 Hobe etlusive of VAT tanya ac pili ae Saeeee et A wh Pl al inn Deemed sales rales apply nly tVAT taxpayers onl, Bi Deemed sales for ne concep and rales of dered sles an Brosseau 00000 wie armary oss enly VAT mapyes “s) mee oe cevaTempyesby ue of asence om equa ee: inoue Bon oer poe fi reed ath ce nom 203chapter 7—The Regular Output VAT ‘Rule on VAT not separately billed Fe at eprat ed h o Meth VAT orton sated hee shal Be eee inclusive a og te anit compu frm the ated pics a8 2 wapi. Incorrect billing of VAT terete te total amount ey the VA etl he VA. Te VAT sabe eam #2 wp Iastration Maral invoiced asa of goods allows: sein rice 100000 urpewvat s0000 evo pee zuueo th ou Aso ave ben 7200 one a a he Or a et 1 el oats ace PITS Te PILES7! OM ereported in he VAT return.