Sources of Input VAT

 Importation – Although importation is not a transaction arising from the ordinary

course of trade or business, it is subject to VAT, whether for personal or business
use.
Importer – refers to any person who brings goods into the Philippines,
whether or not made in the course of trade or business.

Importation of Goods by TAX EXEMPT PERSONS

In case of goods imported into the Philippines by VAT-exempt persons which are
subsequently sold, transferred or exchanged to non-exempt persons, the latter shall be
considered the importers thereof and shall be liable for the VAT due on such
importation.

Computation of VAT ON IMPORTATION

1. General Formula:
Total value for tariff and customs duties Pxxx
(determined by the Bureau of Customs)
ADD:
Customs duties xxx
Excise Tax xxx
Other charges prior to release** xxx xxx
Tax base Pxxx
Tax rate 12%
VAT on Importation Pxxx

** Should only refer to legitimate expenses prior to release from BOC such as:
 Insurance, Freight, Postage
 Interest, Commission
 Bank charge, Brokerage
 Wharfage, Arrastre, Stamps
 Processing Fee
2. Where the customs duties are determined on the basis of Quantity or Volume of
Goods, the landed cost should be used as a basis for computing VAT

Formula:
Invoice Amount Pxxx
Add:
Customs duties xxx
Excise Tax xxx
Other charges prior to release** xxx xxx
Landed Cost xxx
Tax rate 12%
VAT on Importation Pxxx