VAT on Sale of Goods or Property

• Value-added tax is a uniform tax imposed on person, who in the course of trade or business sells, barters, exchanges or leases goods or properties or renders services, and on any person who imports goods.
• VAT is a type of business tax, alongside with percentage and excise tax.
• Under VAT, the seller is the one statutorily liable for the payment of the tax but the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services.
• In the case of importation, the importer is the one liable for the VAT.
• Vat and excise tax may be imposed simultaneously on the manufacture and importation of products.
• Vat and percentage tax cannot be imposed at the same time.
• Vat and percentage tax cannot be imposed at the same time.
• VAT is an indirect tax imposed on the value added in each stage of distribution.
• VAT is applied if the aggregate of his actual or expected gross sales or gross receipts exceeds 3,000,000.
• The phrase "in the ordinary course of business" means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto.
• There is no automatic exemption from vat registration requirements of local government units.
• Any business or business pursued by an individual where the aggregate gross sale or receipts do not exceed 100,000 during any 12-month period shall be considered principally for subsistence or livelihood and not in the course of business.
• Generally, services rendered in the Philippines by a non-resident foreign person shall be considered as being rendered in the ordinary course of trade or business even if the performance of services is not regular.
• Goods or property shall mean all tangible and intangible objects that are capable of pecuniary estimation and shall include: (1) real property held primarily for sale to customers or held for lease in the ordinary course of business; (2) the right or the privilege to use patent or other like property or right; (3) the right or the privilege to use in the PH of any industrial, commercial, or scientific equipment; (4) the right or privilege to use motion pictures; and (5) Radio, television, satellite, and cable tv time.
• Gross selling price is the total amount of money or its equivalent, which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter, or exchange of the goods or properties, excluding the vat. The excise tax, if any, on such goods or property shall form part of the gross selling price.
• Sales returns and allowances for which a proper credit or refund was made, and sales discounts determined and granted at the time of sale which are expressly indicated in the invoice, are proper deductions from gross selling price to arrive at the tax base.
• There shall be levied, assessed, and collected on every sale, barter or exchange of goods or properties, a vat equivalent to 12% of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor.
• Export sales by VAT -registered persons shall be subject to Zero-rate.
• Sale of good or property to persons or entities whose exemptions from direct or indirect taxes under special law or international agreements to which the PH is a signatory (e.g. ADB and IRRI), is subject to zero-rate.
• Sale of raw materials inventories, supplies, equipment, packaging materials and goods, to a registered export enterprise, to be used directly and exclusively in its registered project or activity shall be subject to zero-rate. The above-described sales to existing registered export enterprises located inside ecozones and freeport zones shall also be qualified for VAT zero-rating under this sub-item until the expiration of the transitory period.
• Export sale means the sale and actual shipment of goods from the Philippines to a foreign country, that is paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the BSP.
• Export sale refers to the sale of goods, supplies, equipment, and fuel to persons engaged in international shipping or international air transport operations. Provided that the goods, supplies, equipment, and fuel shall be used for international shipping or air transport operations.
• Sale of gold to BSP by a VAT-registered taxpayer is among exempt transactions.