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Selling price = amount of sale stated in the sales document or the fair market
value, whichever is higher.
Fair market value (FMV) = zonal value (value determined by the BIR commissioner)
or appraised value (value determined by the assessor)
again, whichever is higher
In case of sale of real properties ON INTALLMENT PLAN with the zonal value or fair market value
higher than the consideration of the sale, the method to compute the VAT on the installment
payment will be
Actual Collection (ex-VAT)
x zonal vale x 12%
Agreed Consideration (ex-VAT)
Sale of real property on installment plan means sale of real property by a real estate dealer, the
initial payments of which in the year of sale DO NOT EXCEED 25% of the gross selling price;
it will become a sale of real property on a DEFERRED PAYMENT BASIS
Initial payment means any down payment made plus all payment actually and constructively
received during the year of sale.
ILLUSTRATON:
On October 1, 2019 Belle Company sold a parcel of land to GGV company for P2,000,000,
plus output VAT, with a down payment of P200,000 VAT not included; the balance
payable in 36 equal monthly installment of P50,000 plus output VAT. The zonal value of
the land at the time of sale was P3,000,000. Determine the following:
1. The amount to be paid by GGV company on October 1, 1019
2. The amount to be paid by GGV Company every month thereafter.
SOLUTION
(1) October 1, 2019 Down Payment 200,000.00
Plus: Output VAT* 36,000.00
Total 236,000.00
*200,000/2,000,000 x 3,000,000 x 12% = 36,000.00
1800000
Problem:
Susan Realty , a real estate dealer, sold a residentiala lot on
January 3, 2019. The following are the terms of sale