COMPUTATION OF VAT PAYABLE

Output VAT (Gross Sales or Gross Receipt * 12%) ₱xx

Less: Input VAT (Purchase of Goods or Services * 12%) (xx)

Advance Payment (xx)
VAT Payable (Excess Input VAT) ₱xx

SOURCES OF OUTPUT VAT

 Actual Sale
 Transaction Deemed Sales
 Zero (0%) Rated Sales
ACTUAL SALE

Sales where there are actual exchanges between buyers and sellers in the ordinary course of trade or
business.

BASIS OF THE 12% OUTPUT VAT

 Sale of Goods
 Sale of Services
 Sale by a dealer in securities
 Sale of Real Properties

GROSS SELLING PRICE VS. GROSS RECEIPTS

GROSS SELLING PRICE - the total amount of money or its equivalent which the buyer pays to the seller in
consideration of sale of goods or property excluding VAT.

GROSS RECEIPTS - the total amount of money or its equivalent representing the contract price,
compensation, service fee, rental, or royalty, including the amount charged for materials and services
and deposits and advance payments actually or constructively received during the taxable period
excluding VAT.

IN CASE OF INCIDENTAL TRANSACTIONS

“In the course of trade or business” means the regular conduct or pursuit of a commercial or an
economic activity, including transactions incidental thereto, by any person, regardless of whether the
person engaged therein is a non-stock, non-profit private organization, or a government entity.