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Part II Value Added Tax

Sections 105-115 of the NIRC, amended by RA No. 9337


Implemented by RR No. 16-05 as amended by RR No. 4-07
1. Preliminary Items
a. Nature and characteristic of VAT in general
Sec. 4.105.-2 of RR No. 16-05
CIR vs. Magsaysay Lines GR No. 146984 dated July 28, 2006
CIR vs. Seagate Technology (Phils) GR No. 153866 February 11,
2005
b. VAT as an indirect tax
Contex vs. CIR GR No. 151135 dated July 2, 2004
c. Meaning of the phrase in the course of trade of business (Sec.
105)
Sec. 4.105-3 of RR No. 16-05
CIR vs. Magsaysay Lines GR No. 146984 dated July 28, 2006
d. Exceptions to the Rule of Regularity
2. Impact of tax
3. Incidence of tax
4. Tax credit method
5. Destination principle
6. Persons liable (Sec. 105)
a) Persons liable in general
CIR vs. CA and Commonwealth Management Services GR No.
125355 dated March 30, 2000.
b) Who are required to register for VAT (Sec. 236 G) [Sec. 9.236-1 of
RR No. 16-05]
c) Optional VAT Registration (Sec. 236 H) [Sec. 9.236-1 of RR No.
16-05]
7. VAT on sale of goods or properties
a. Definition of goods and services (Sec. 106 and Sec. 108)
b. VAT base for goods and services (Sec. 106 and Sec.108)
c. Meaning of gross selling price and gross receipts (Sec. 106 and
Sec.108)
d. Requisites of taxability of sale of goods or properties
e. Rules on sales of Real Property
f. Rule on Sales on Instalment [RR No. Sec. 4.106-3 of RR No. 16-05 as
amended by Sec. 3 of RR No. 4-07]
g. See also rule on sale of real property used in business (Sec. 14 (l) of
RR No. 4-07)
Correlate with Sec. 109 on exempt sales of Real Property
h. Rules for Certain Services
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Atty. Gail Joseph Santos
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a. Common Carriers
Sec. 4.108-2 Nos. 11 and 12 of RR No. 16-05
Sec. 4.108-3 of RR No. 16-05
b. Lease of Properties
Sec. 4.108-3 of RR No. 16-05
Lease of Residential Units [Sec. 4.109-1 (B)(q) of RR No. 1605]
c. Professional Services
d. Medical Services
Sec. 4.109-1 (B)(g) of RR No. 16-05
Philippine Healthcare Providers vs. CIR GR No. 168129 dated
April 24, 2007
8. Transactions deemed sale
a) Transfer, use or consumption not in the course of business of goods/properties
originally intended for sale or use in the course of business
b) Consignment of goods if actual sale not made within 60 days from date of
consignment
c) Retirement from or cessation of business with respect to inventories on hand
9. Change or cessation of status as VAT-registered person
a) Subject to VAT
(i)
Change of business activity from VAT taxable status to VAT-exempt status
(ii)
Approval of request for cancellation of a registration due to reversion to
exempt status
(iii)
Approval of request for cancellation of registration due to desire to revert to
exempt status after lapse of 3 consecutive years
b) Not subject to VAT
(i)
Change of control of a corporation
(ii)
Change in the trade or corporate name
(iii)
Merger or consolidation of corporations
10. VAT on importation of goods
a) Transfer of goods by tax exempt persons (Sec. 107 B)
11. VAT on sale of service and use or lease of properties
a) Requisites for taxability
12. Effectively zero-rated sales of goods or properties
13. Zero-rated sale of good/services
a) Nature of Zero Rated Sales
b) Zero Rated Sale of Goods (Sec. 106)
c) Zero Rated Sale of Services (Sec. 108 B)
CIR vs. American Express GR No. 152609 dated June 29, 2005
CIR vs. Burmeister and Wain GR No. 153205 dated Jaunary22,
2007
CIR vs. Acesite GR No. GR No. 147295 dated February 16, 2007
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d) Automatic zero-rate vs. Effectively zero-rate


CIR vs. Seagate Technology (Phils) GR No. 153866 February 11,
2005
CIR vs. Toshiba Information Equipment GR No. 150154 dated
August 9, 2005
e) Zero Rated Sales vs. Exempt Sales
CIR vs. Cebu Toyo Corp. GR No. 149073 dated February 16, 2005
14. VAT exempt transactions
a) VAT exempt transactions, in general
b) Exempt transaction, enumerated
Atlas Consolidated Mining vs. CIR GR Nos. 141104 and 148763
dated June 8, 2007
CIR vs. Mirant Pagbilao Corp. GR No. 172129 dated September 12,
2008
Northern Mini Hydro vs. CIR CTA Case No. 7257 dated May 28, 2009
CIR vs. San Roque Power, CTA EB Case No. 408, March 25, 2009
Steag State Power vs. CIR, CTA Case No. 7458 and 7554, August 27,
2009
15. Exempt Persons vs. Exempt Transactions
CIR vs. Seagate Technology (Phils) GR No. 153866 February 11, 2005
16. Input tax and output tax, defined
17. Sources of input tax (Sec110A)
a) Purchase or importation of goods
b) Purchase of real properties for which a VAT has actually been paid
c) Purchase of services in which VAT has actually been paid
d) Transactions deemed sale (Sec. 106 B)
i. Rationale of Imposition
ii. Enumeration Sec. 4.106-7 RR No. 16-05
iii. Tax Base of Transactions Deemed Sale
e) Presumptive input/Transitional input
Sec. 4.111-1 of RR No. 16-05
Fort Bonifacio Development vs. CIR GR No. 158885 dated April 2,
2009
f) Rule on Input Tax on Capital Goods (Sec. 4.110-3 of RR No. 16-05)
18. Persons who can avail of input tax credit
19. Determination of output/input tax; VAT payable; excess input tax credits (Sec. 111 B)
a) Determination of output tax
b) Determination of input tax creditable
c) Allocation of input tax on mixed transactions
d) Determination of the output tax and VAT payable and computation of VAT payable or
excess tax credits
20. Substantiation of input tax credits (Sec. 4.110-8 of RR No. 16-05)
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COURSE OUTLINE SY 2014-2015
Atty. Gail Joseph Santos
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21. Refund or tax credit of excess input tax


a) Compare with Sec. 204 and 229
b) Grounds
c) Who may claim for refund/apply for issuance of tax credit certificate
d) Period to file claim/apply for issuance of tax credit certificate
(i)
Contex vs. CIR GR No. 151135 dated July 2, 2004
e) Manner of giving refund
f) Destination principle or cross-border doctrine
CIR vs. American Express GR No. 152609 dated June 29, 2005
CIR vs. Toshiba Information Equipment GR No. 150154 dated August
9, 2005
22. Invoicing requirements
a) Invoicing requirements in general
b) Invoicing and recording deemed sale transactions
c) Consequences of issuing erroneous VAT invoice or VAT official receipt
23. Filing of return and payment
24. Withholding of final VAT on sales to government

TAXATION II
COURSE OUTLINE SY 2014-2015
Atty. Gail Joseph Santos
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