REGISTRATION OF VAT TAXPAYERS
•Any person who, in the course of trade or
VAT
REGISTRATION
AND COMPLIANCE
REQUIREMENTS
REGISTRATION OF VAT TAXPAYERS
•Separate or distinct establishment shall mean any branch
or a facility where the sale transactions occur.
•Branch means a fixed establishment in a locality which
conducts sales operation of the business as an extension of
the principal office.
•Principal place of business refers to the place where the
head or main office is located as appearing in the
corporation’s Article of Incorporation. in the case of an
individual, the principle place of business shall be the
place where the head or main office is located and where
the books of accounts are kept.
REGISTRATION OF VAT TAXPAYERS
•Any person who maintains a head or main office in different
branches in different places shall register with the Revenue
District Office which has jurisdiction over the place where in the
main or head office or branch is located.
•However, the registration fee shall be paid to any accredited
bank in the Revenue District where such person is registered.
•In areas where there are no accredited banks, the same shall be
paid to the Revenue District Office, collection agent, or duly
authorized treasurer of the municipality where which place of
business or branches situated.
business, sales, barters, exchanges goods or
properties, or engages in the sale of services
subject to VAT, shall register with the
appropriate Revenue District Office (RDO) and
pay an annual registration fee of P500 for every
separate and distinct establishment or place of
business before the start of such business and
every year thereafter on or before the 31st day of
January.
REGISTRATION OF VAT TAXPAYERS
•Warehouse means the place or premises where
the inventory of goods for sale are kept and from
which such goods are withdrawn for delivery to
customers, dealers, or persons acting in behalf of
the business.
• Any person who, in the course of trade or
business, sales, barters, exchanges goods or
properties or engages in the sale or exchange of
services shall be liable to register if:
1. His gross sales or receipts for the past 12
months other than those that are exempt
have exceeded P3 million; or
MANDATORY 2. There are reasons to believe that his gross
sales or receipts for the next 12 months
REGISTRATION other than those that are exempt will
exceed P3 million
• Every person who becomes liable to be
registered but who fails to register, shall be liable
to pay the output tax as if he were a VAT
registered person, but without the benefit of
input tax credits for the period in which he was
not properly registered.
OPTIONAL VAT REGISTRATION OF VAT EXEMPT
PERSONS
•Any person who is VAT exempt under the Code and is
not required to register for VAT may elect to be VAT
registered by registering with the Revenue District
Office the past jurisdiction over the head office of
that person, and pay the annual registration fee of
P500 for every separate and distinct establishment.
•Any person who elects to be registered shall not be
allowed to cancel his registration for the next three
years.
OPTIONAL VAT REGISTRATION OF VAT EXEMPT
PERSONS
•Once registered as a VAT person, the taxpayer
shall be liable to output tax and be entitled to
input tax credit beginning on the first day of the
month following such registration.
•Any person who has registered VAT as tax type
shall be referred to as VAT-registered person,
who shall be assigned only one Taxpayer
Identification Number.
• The following are required to register as non-VAT
persons and to pay the registration fee of P500:
1. VAT exempt persons under Section 109 of the
Tax Code who did not opt to register as VAT
taxpayers;
2. Individuals engaged in business where the gross
sales or receipts do not exceed P100,000 during
REGISTRATION OF any 12-month period (They are required to
NON-VAT OR register but will not be made to pay the
registration fee of P500)
EXEMPT 3. Nonstock Nonprofit organizations and
associations engaged in trade or business
TAXPAYER whose gross sales or receipts do not exceed P3
million for any 12-month period or in an amount
as adjusted thereafter every three years
depending on the annual Consumer Price Index
as published by the PSA.
4. Cooperatives other than electric cooperatives.
However, they are not required to pay the
registration fee.
OPTIONAL VAT REGISTRATION OF VAT EXEMPT
PERSONS
•The above stated taxpayers may apply for
registration not later than 10 days before the
beginning of the calendar quarter and shall pay
the registration fee unless they have already paid
at the beginning of the year.
•In any case, the Commissioner of Internal
Revenue may, for administrative reason, deny any
application for registration.
•Every person other than those required to be
registered as VAT persons, engaged in any
business, shall, on or before the
commencement of his business, or
whenever he transfers to another revenue
REGISTRATION district, register with the RDO concerned
OF NON-VAT OR within 10 days from the commencement of
EXEMPT business or transfer in the manner
prescribed in this section and shall pay the
TAXPAYER applicable registration fee of P500 for every
separate and distinct establishment or place
of business, if he has not paid the
registration fee in the beginning of the
taxable year.
•The application shall be filed with the
revenue district office where the principal
place of business, branch, storage place or
premises is located, as the case may be,
APPLICATION FOR before commencement of business or
REGISTRATION production or qualification as a withholding
agent. In the case of storage places, the
application shall be filed within 30 days from
the date the aforesaid premises have been
used for storage.
 •A VAT registered person may cancel his
registration for VAT if:
1. He makes written application and can
demonstrate to the Commissioner of
Internal Revenue satisfaction that his
CANCELLATION gross sales or receipts for the following
12 months, other than those exempt
OF under the Tax Code, will not exceed P3
REGISTRATION million
2. He has ceased to carry on his trade or
business, and does not expect to
recommence any trade or business
within the next 12 months
•Some other instances where a VAT registered
person may apply for cancellation of
registration are:
1. a change of ownership, in the case of
single proprietorship
2. dissolution of a partnership or
CANCELLATION OF Corporation
REGISTRATION 3. merger or consolidation with respect to
the dissolved Corporation
4. a person who has registered prior to
planned business commencement but
failed to actually start business

FILING OF RETURN AND PAYMENT OF VAT
•Every person liable to pay value-added tax shall file a
quarterly return of the amount of his gross sales or
receipts within 25 days following the close of each taxable
quarter (BIR Form 2550Q).
•The term “taxable quarter” shall be the quarter that is
synchronized to the income tax quarter of the taxpayer.
FILING OF RETURN AND PAYMENT OF VAT
•Amounts reflected in the monthly VAT
declarations for the first two months of the
quarter shall be included in the quarterly VAT
return which reflects the cumulative figures for
the taxable quarter.

•Monthly VAT declarations of taxpayer, whether large or
non-large shall be filed and the taxes paid not later than
the 20th day of the month following the end of each
month (BIR Form 2550M).
•Payments in the monthly declaration shall,
however, be credited in the quarterly VAT return
to arrive at the net VAT payable or excess input
tax/ overpayment as of the end of a quarter.

FILING OF RETURN AND PAYMENT OF VAT ILLUSTRATION

•Beginning January 1, 2023, the filing and payment Excel Company has the following records of sales and
purchases during the 3rd quarter of the year:
of VAT shall be done within 25 days following the Sales Purchases
close of each taxable quarter (RMC 5-2023, RR July 620,000 508,000
13-2018 Sec 4-114-1(A), TRAIN Law Sec 37). August 430,000 432,000
September 540,000 314,500

The company had a deferred input tax in June of P6,200.

REQUIRED: Compute the VAT payable for the months of

July and August and the quarterly VAT payable for 3rd
month.
ANSWER July August September Quarterly
July August September Quarterly VAT due/(deferred input tax) 7,240 (240) 26,820 34,060
Output Tax 74,400 51,600 64,800 190,800 Less: VAT paid, July (7,240)
Less: Input taxes VAT Payable 7,240 - 26,820 26,820
July 60,960 60,960
August 51,840 51,840
September 37,740 37,740
Deferred input from June 6,200 6,200 NOTE:
Deferred input from August 240 - If the above illustration will be filed before January 1, 2023, there
Total Input taxes 67,160 51,840 37,980 156,740 will be a monthly filing of VAT returns (BIR Form 2550M – July P7,240,
VAT due/(deferred input tax) 7,240 (240) 26,820 34,060 and August – zero), as well as quarterly filing (BIR Form 2550Q –
P26,820).
Less: VAT paid, July (7,240) - If the above illustration is filed from January 1, 2023, then there will
VAT Payable 7,240 - 26,820 26,820 not be a monthly filing, instead, it will all be filed under the quarterly
filing (BIR Form 2550Q – P34,060).

• If at the end of any taxable quarter the output
tax exceeds the input tax, excess shall be paid by
the VAT registered person. If the input tax
exceeds the output tax, the excess shall be
carried over to the succeeding quarter or
quarters.
EXCESS
OUTPUT OR • Any input tax attributable to the purchase of
capital goods or to zero-rated sales by a
INPUT TAX VAT-registered person may at his option be
refunded or credited against other Internal
Revenue taxes.
• There is no other mode of recovering unapplied
input taxes, particularly claiming it outright as
deductible expense for income tax purposes.
• Except as the commissioner otherwise permits,
the return shall be filed with and the tax paid to
an authorized agent bank, Revenue Collection
Officer or duly authorized city or municipal
treasurer in the Philippines located within the
revenue district where the taxpayers registered
PLACE OF or required to register (Sec 114B, NIRC).
FILING AND
• Only one consolidated quarterly VAT return (BIR
PAYMENT Form 2550Q) or monthly VAT declaration (BIR
Form 2550M) covering the results of operation of
the head office as well as the branches for all
lines of business subject to VAT shall be filed by
the taxpayer, for every period, with the BIR office
where said taxpayers required to be registered.

•The government or any of its political
subdivisions, instrumentalities or agencies,
including government-owned or controlled
corporations (GOCCs) shall, before making
payment on account of each purchase of
goods and services which are subject to the
WITHHOLDING OF value added tax imposed in sections 106 and
108 of this Code, deduct a final value added
CREDITABLE tax at the rate of five percent of the gross
VALUE-ADDED payment thereof.
TAX
•The 5% final withholding VAT shall represent
the net VAT payable of the seller.
• The remaining 7% effectively accounts for the
standard input VAT for sales of goods or services
to government, or any of its political
subdivisions, instrumentalities or agencies
including GOCC's in lieu of the actual input VAT
directly attributed or ratably apportioned to
such sales.
WITHHOLDING
OF CREDITABLE • If the actual input VAT exceeds 7% of gross
VALUE-ADDED payments the excess may form part of the
sellerʼs expense or cost.
TAX
• On the other hand, if the actual input VAT is less
than 7% of gross payments the difference must
be closed to expense or cost.
 •Beginning January 1, 2021, the VAT
withholding system under this subsection
shall shift from final to a creditable system.
•The payment for lease or use of properties or
WITHHOLDING property rights to non-resident owners shall
OF CREDITABLE be subject to 12 percent withholding tax at
the time of payment.
VALUE-ADDED
TAX
•Payments for purchase of goods and services
arising from projects funded by Official
Development Assistance (ODA) As defined
under Republic Act No. 8182, otherwise
known as the “Official Development
Assistance Act of 1996” , as amended, shall
WITHHOLDING not be subject to the final/creditable
OF CREDITABLE withholding taxes as imposed in this
VALUE-ADDED subsection.
TAX
•The VAT withheld shall be remitted within 10
days following the end of the month the
withholding was made.

•A VAT registered person shall issue: •All purchases covered by invoices/receipts

1. A VAT invoice for every sale, barter or other than VAT invoice/VAT official receipt
exchange of goods or properties shall not give rise to any input tax.
2. A VAT official receipt for every lease of
goods or properties and for every sale,
barter or exchange of services. •VAT invoice/official receipt shall be
INVOICING INVOICING prepared at least in duplicate, the original
REQUIREMENTS •Only VAT registered persons are required to
REQUIREMENTS to be given to the buyer and the duplicate
to be retained by the seller as part of his
print their TIN followed by the word VAT in accounting records.
their invoice or official receipts. Said
documents shall be considered as a VAT
invoice or VAT official receipt.

CONSEQUENCE OF ISSUING ERRONEOUS VAT CONSEQUENCE OF ISSUING ERRONEOUS VAT

INVOICE/OFFICIAL RECEIPT INVOICE/OFFICIAL RECEIPT
•If a person who is not VAT-registered issues an invoice 2. VAT shall be recognized as an input tax credit
or receipt shows his Tax Identification Number,
followed by the word “VAT”, the erroneous issuance to the purchaser under Section 110 of the Tax
should result in the following: Code, provided the requisite information
required below is shown on the invoice or
1. The non-VAT person shall be liable to: receipt.
a. the percentage tax is applicable to his
transactions
b. VAT due on the transactions without the
benefit of any input tax credit
c. a 50% surcharge under Section 248 B of the
Tax Code
ISSUANCE OF A VAT INVOICE OR VAT RECEIPT ON AN
EXEMPT TRANSACTION BY A VAT-REGISTERED PERSON

•If a VAT-registered person issues of VAT invoice or

VAT official receipt for a VAT-exempt
transaction, but fails to display prominently in
the invoice or receipt the words “VAT-exempt END OF PRESENTATION
sale”, the transaction shall become taxable and
the issuer shall be liable to pay VAT thereon. The
purchaser shall be entitled the claim an input tax
credit on his purchase.