BUSINESS AND TRANSFER TAXATION

Business Taxation_VAT (Students’ Handouts)

CHAPTER 9 – INPUT VAT

Input Tax or input VAT refers to the VAT due or paid by a VAT-registered person on importation or local
purchases of goods, properties or services, including lease or use of properties, in the course of his trade
or business.

Requisites of a creditable input VAT (allowable input VAT)

1. The input VAT must have been paid or incurred in the course of trade or business.
2. The input VAT is evidenced by a VAT invoice or official receipt.
3. The VAT invoice or receipt must be issued by a VAT-registered person.
4. Input VAT is incurred n relation to vatable sales and not from exempt sales.

Types of Claimable Input VAT

1. Transitional input VAT
2% of the beginning inventory of goods, materials or supplies or the actual VAT paid
thereon, whichever is higher
2. Regular input VAT
3. Amortization of deferred input VAT
When the monthly aggregate acquisition cost exceeds P1,000,000, the input VAT is
amortized over useful life in months or 60months, whichever is shorter
4. Presumptive input VAT
Sa MaMi Co PaRe
4% of the gross value in money of their purchases of primary agricultural products which
are used in their production
5. Standard input VAT
6. Input VAT carry-over

Based on R.B.Banggawan’s Business and Transfer Taxation (2019) Page 1 of 1