VAT

Cards (42)

  • BUSINESS TAX
    • those imposed upon onerous transfers such as sale, barter, exchange, and importation
    • tax on a business
  • Business
    • habitual commercial activity
  • Gratuitous transfers
    • not subject to business tax but subject to transfer taxes
  • Onerous Transfer
    • In the ordinary course of trade or business including incidental transactions
  • Types of Business Tax
    1. Value-added Tax
    2. Other percentage taxes or simply Percentage Tax
    3. Excise Tax
  • Threshold amount
    • more than 3,000,000 per annum
  • Indirect tax
    • sellers can pass the burden to pay tax to buyers
  • Subject to 0% Rate
    1. Export Sales
    2. Zero rated sales of services
    3. Effectively Zero Rated Sales of Goods and Property
  • Destination Principle
    • Goods and services are taxed only in the country where these are consumed.
  • Cross border principle
    • No VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority.
    • exports are zero-rate while imports are taxed
  • Input tax
    • VAT due from or paid by a VAT-registered person in the course of his trade or business on importation of goods or local purchase of goods or services.
  • Output Tax
    • VAT due on the sale or lease of taxable goods or required to register under the section 236 of the Tax Code.
  • Impact of Tax
    • on the statutory taxpayer, the one from whom the government collects
    • on the seller upon whom the tax has been imposed
  • Incidence of Tax
    • on the one who bears the burden of taxation
    • on the final consumer
  • Transitional Input Tax
    • 2% of beginning inventory
  • Presumptive Input Tax
    • 4% of the gross value in money of their purchases of primary agricultural products.
  • Tax Credit Method
    • refers to the manner by which the VAT of a taxpayer is computed.
  • If output tax is more than input tax, the excess has to be paid.
  • If input tax is more than output tax, the excess shall be carried over to the succeeding quarter/s.
  • Lease of Residential Units
    • If the lease payments if more than 15,000 monthly and the annual rentals are less than 3,000,000 = VAT Exempt, Subject to 3% Percentage Tax
    • If the lease payments if less than 15,000 monthly = VAT Exempt, not subject to 3% Percentage Tax
    • If the lease payments if more than 15,000 monthly and the annual rentals are more than 3,000,000 = Subject to 12% VAT, Subject to 3% Percentage Tax
  • The seller is directly liable to pay VAT
  • The rate of VAT is 12% and 0%
  • Transaction deemed sale
    • not actually sales because of the absence of actual exchange between the buyer and the seller, are considered or included in the term "sale"
  • Zero rated sale of service
    1. Foreign currency
    2. Foreign client
    3. Service must be done within the Philippines
  • Transactions Deemed Sale
    1. Transfer, use or consumption not in the course of business of goods or properties originally intended for sale or for use in the course of business;
    2. Distribution or transfer to: (a) Shareholders or investors as share in the profits of the VAT-registered persons; or(b) Creditors in payment of debt;
    3. Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned; and
    4. Retirement from or cessation of business, with respect to inventories of taxable goods existing as of such retirement or cessation.
  • Domestic Carriers and Keepers of Garage - Gross Receipts - 3%
  • International air and shipping carriers - gross receipts - 3%
  • Radio and/or television broadcasting - gross receipts of not exceeding 10 million - 3%
  • Gas and water utilities - Gross receipts not exceeding 10 million - 2%
  • Life Insurance - Premium - 2%
  • Agents of Foreign Insurance Company - Premium - 4%
  • Life Insurance directly taken from Foreign Insurance Companies - Premiums - 5%
  • Winnings in horse races - winnings after deducting the cost of the ticket - 10%
  • Winnings in double, forecast/quinella and trifecta bets - winnings after deducting the cost of the ticket - 4%
  • Owners of winning race horses - 10%
  • gaming tax - entire gross gaming revenue - 5%
  • Maturity period
    • 5 years or less - 5%
    • More than 5 years - 1%
  • Pre-termination
    If maturity is shortened, the tax rate applied based on the new maturity period
  • Dividend and Equity Shares
    Net income of subsidiaries - 0%
  • Other income sources
    • Royalties
    • Rentals (real or personal property)
    • Profits from exchange and other gross income items under Sec. 32 - 7%