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ESTATE TAX
Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time
of death and on certain transfers, which are made by law as equivalent to testamentary disposition. It is not a tax on property. It is
a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force
at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary.
Tax Rates
Over But not Over The Tax Shall be Plus Of the Excess Over
P 200,000.00 Exempt
Effective July 28, 1992 up to December 31, 1997 (Section 77 of the NIRC, as amended (Republic Act No. 7499) … If the Net
Estate is
Over But not Over The Tax Shall be Plus Of the Excess Over
P 200,000.00 Exempt
Effective January 1, 1973 to July 27, 1992 (Section 85 of the NIRC, as amended (Presidential Decree No. 69) … If the Net
Estate is
Over But not Over The Tax Shall be Plus Of the Excess Over
P 10,000.00 Exempt - -
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50,000.00 75,000.00 P 1,200.00 4% 50,000.00
Effective September 15, 1950 to December 31, 1972 (Section 85 of the NIRC, as amended (Republic Act No. 579)
Effective July 1, 1939 to September 14, 1950 (Section 85 of the NIRC, as amended (Commonwealth Act No. 466)
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Estate and Inheritance Tax …. If the Net Estate is
a) The executor or administrator or any of the legal heirs of the decedent or non-resident of the Philippines under any of the
following situation:
- Where though exempt from Estate Tax, the gross value of the estate exceeds two hundred thousand P 200,000.00; and
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- Where regardless of the gross value, the estate consists of registered or registrable property such as real property, motor vehicle,
share of stocks or other similar property for which a clearance from the Bureau of Internal Revenue (BIR) is required as a
prerequisite for the transfer of ownership thereof in the name of the transferee. (part II par.(1.#3) of RMC No. 34-2013)
b) Where there is no executor or administrator appointed, qualified and acting within the Philippines, then any person in actual or
constructive possession of any property of the decedent must file the return.
c) The Estate Tax imposed under the Tax Code shall be paid by the executor or administrator before the delivery of the
distributive share in the inheritance to any heir or beneficiary. Where there are two or more executors or administrators, all of
them are severally liable for the payment of the tax. The estate tax clearance issued by the Commissioner or the Revenue District
Officer (RDO) having jurisdiction over the estate, will serve as the authority to distribute the remaining/distributable
properties/share in the inheritance to the heir or beneficiary.
d) The executor or administrator of an estate has the primary obligation to pay the estate tax but the heir or beneficiary has
subsidiary liability for the payment of that portion of the estate which his distributive share bears to the value of the total net
estate. The extent of his liability, however, shall in no case exceed the value of his share in the inheritance.
The properties subject to Estate Tax shall be appraised based on its fair market value at the time of the decedent's death.
The appraised value of the real estate shall be whichever is higher of the fair market value, as determined by the
Commissioner (zonal value) or the fair market value, as shown in the schedule of values fixed by the Provincial or City
Assessor.
If there is no zonal value, the taxable base is the fair market value that appears in the latest tax declaration.
If there is an improvement, the value of improvement is the construction cost per building permit or the fair market value
per latest tax declaration.
Applicable for deaths occurring after the effectivity of RA 8424 which is January 1, 1998
(1) Actual funeral expenses (whether paid or unpaid) up to the time of interment, or an amount equal to five percent (5%) of the
gross estate, whichever is lower, but in no case to exceed P200,000.
(4) Claims of the deceased against insolvent persons where the value of the decedent’s interest therein is included in the value of
the gross estate; and,
B. Property previously taxed (Vanishing Deduction) (Section 86(2) of the NIRC as amended by Republic Act No. 8424)
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An amount equal to the value specified below of any property forming a part of the gross estate situated in the Philippines of any
person who died within five (5) years prior to the death of the decedent, or transferred to the decedent by gift within five (5) years
prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from
such prior decedent by gift, bequest, devise or inheritance, or which can be identified as having been acquired in exchange for
property so received:
One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death of the decedent, or if the
property was transferred to him by gift within the same period prior to his death;
Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than two (2) years prior to the
death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;
Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than three (3) years prior to the
death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;
Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than four (4) years prior to the
death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; and
Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than five (5) years prior to the
death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;
These deductions shall be allowed only where a donor’s tax or estate tax imposed was finally determined and paid by or on behalf
of such donor, or the estate of such prior decedent, as the case may be, and only in the amount finally determined as the value of
such property in determining the value of the gift, or the gross estate of such prior decedent, and only to the extent that the value
of such property is included in the decedent’s gross estate, and only if in determining the value of the estate of the prior decedent,
no Property Previously Taxed or Vanishing Deduction was allowable in respect of the property or properties given in exchange
therefor. (Section 6 & 7 of RR 2-2003)
D. The family home - fair market value but not to exceed P1,000,000.00
The family home refers to the dwelling house, including the land on which it is situated, where the husband and wife, or a head of
the family, and members of their family reside, as certified to by the Barangay Captain of the locality. The family home is deemed
constituted on the house and lot from the time it is actually occupied as a family residence and is considered as such for as long as
any of its beneficiaries actually resides therein. (Arts. 152 and 153, Family Code)
E. Standard deduction – A deduction in the amount of One Million Pesos (P1,000,000.00) shall be allowed as an additional
deduction without need of substantiation.
F. Medical expenses – All medical expenses (cost of medicines, hospital bills, doctor’s fees, etc.) incurred (whether paid or
unpaid) within one (1) year before the death of the decedent shall be allowed as a deduction provided that the same are duly
substantiated with official receipts. For services rendered by the decedent’s attending physicians, invoices, statements of account
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duly certified by the hospital, and such other documents in support thereof and provided, further, that the total amount thereof,
whether paid or unpaid, does not exceed Five Hundred Thousand Pesos (P500,000).
G. Amount received by heirs under Republic Act No. 4917-Any amount received by the heirs from the decedent’s employer as a
consequence of the death of the decedent-employee in accordance with Republic Act No. 4917 is allowed as a deduction provided
that the amount of the separation benefit is included as part of the gross estate of the decedent.
H. Net share of the surviving spouse in the conjugal partnership or community property
D. Net share of the surviving spouse in the conjugal partnership or community property
No deduction shall be allowed in the case of a non-resident decedent not a citizen of the Philippines, unless the executor,
administrator, or anyone of the heirs, as the case may be, includes in the return required to be filed in the Section 90 of the Code
the value at the time of the decedent’s death of that part of his gross estate not situated in the Philippines.
Please note that the allowable deductions will vary depending on the law applicable at the time of the decedent’s death.
6. What does the term "Funeral Expenses" include? (Sec 6 (A)(1) of RR 2-2003)
The term "FUNERAL EXPENSES" is not confined to its ordinary or usual meaning. They include:
(a) The mourning apparel of the surviving spouse and unmarried minor children of the deceased bought and used on the occasion
of the burial;
(b) Expenses for the deceased’s wake, including food and drinks;
(e) Cost of burial plot, tombstones, monument or mausoleum but not their upkeep. In case the deceased owns a family estate or
several burial lots, only the value corresponding to the plot where he is buried is deductible;
(g) All other expenses incurred for the performance of the rites and ceremonies incident to interment.
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Expenses incurred after the interment, such as for prayers, masses, entertainment, or the like are not deductible. Any portion of the
funeral and burial expenses borne or defrayed by relatives and friends of the deceased are not deductible. Actual funeral expenses
shall mean those which are actually incurred in connection with the interment or burial of the deceased. The expenses must be
duly supported by official receipts or invoices or other evidence to show that they were actually incurred.
7. What does the term "Judicial Expenses" include? (Sec 6 (A)(2) of RR 2-2003)
Expenses allowed as deduction under this category are those incurred in the inventory-taking of a assets comprising the gross
estate, their administration, the payment of debts of the estate, as well as the distribution of the estate among the heirs. In short,
these deductible items are expenses incurred during the settlement of the estate but not beyond the last day prescribed by law, or
the extension thereof, for the filing of the estate tax return. Judicial expenses may include:
Any unpaid amount for the aforementioned cost and expenses claimed under “Judicial Expenses” should be supported by a sworn
statement of account issued and signed by the creditor.
8. What are the requisites for deductibility of claims against the Estate? (Sec 6(A)(3) of RR 2-2003)
(a) The liability represents a personal obligation of the deceased existing at the time of his death except unpaid obligations
incurred incident to his death such as unpaid funeral expenses (i.e., expenses incurred up to the time of interment) and unpaid
medical expenses which are classified under a different category of deductions pursuant to these Regulations;
(b) The liability was contracted in good faith and for adequate and full consideration in money or money’s worth;
(c) The claim must be a debt or claim which is valid in law and enforceable in court;
(d) The indebtedness must not have been condoned by the creditor or the action to collect from the decedent must not have
prescribed.
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9. How do we determine the fair market value of the unlisted stocks? (RR NO. 6-2013) (Annex U)
In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets and liabilities are adjusted
to fair market values. The net of adjusted asset minus the adjusted liability value is the indicated value of the equity.
For purposes of this item, the appraised value of real property at the time of sale shall be the highest among the following:
(b) The fair market value as shown in the schedule of values fixed by the Provincial and City Assessors, or
DONOR’S TAX
Donor’s Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who
are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect
and whether the property is real or personal, tangible or intangible.
Tax Rates
Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
100,000.00 exempt
Notes:
1. Rate applicable shall be based on the law prevailing at the time of donation.
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2. When the gifts are made during the same calendar year but on different dates, the donor's tax shall be computed based on the
total net gifts during the year.
Donation made to a stranger is subject to 30% of the net gift. A stranger is a person who is not a:
brother, sister (whether by whole or half blood), spouse, ancestor and lineal descendants; or
relative by consanguinity in the collateral line within the fourth degree of relationship.
Effective July 28, 1992 to December 31, 1997 (Republic Act No. 7499)
Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
50,000.00 exempt
Donation made to a stranger is subject to 10% of the net gift. A stranger is a person who is not a:
brother, sister (whether by whole or half blood), spouse, ancestor and lineal descendants; or
relative by consanguinity in the collateral line within the fourth degree of relationship.
Effective January 16, 1981 to July 27, 1992 (Presidential Decree No. 1773)
Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
1,000.00 exempt
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100,000.00 150,000.00 2,110.00 6% 100,000.00
Donation made to a stranger shall be either the amount computed in accordance with the preceding schedule or twenty percent
(20%) of the net gifts, whichever is higher. A stranger is a person who is not a:
brother, sister (whether by whole or half blood), spouse, ancestor and lineal descendant; or
relative by consanguinity in the collateral line within the fourth degree of relationship.
Please note that the donor’s tax rates will vary depending on the law applicable at the time of the gift. The pertinent laws are as
follow:
Commonwealth Act. No. 466 – effective July 1, 1939 to September 14, 1950
Republic Act No. 579 – effective September 15, 1950 to August 3, 1969
Republic Act No. 6110 – effective August 4, 1969 to December 31, 1972
Presidential Decree No. 69 – effective January 1, 1973 to January 15, 1981
Presidential Decree No. 1773 – effective January 16, 1981 to July 27, 1992
Republic Act No. 7499 – effective July 28, 1992 to December 31, 1997
Republic Act No. 8424 – effective January 1, 1998 to present
Deadlines
Within thirty days (30) after the date the gift (donation) is made. A separate return will be filed for each gift (donation) made on
the different dates during the year reflecting therein any previous net gifts made during the same calendar year.
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If the gift (donation) involves conjugal/community/property, each spouse will file separate returns corresponding to his/ her
respective share in the conjugal/community property. This rule will also apply in the case of co-ownership over the property.
Every person, whether natural or juridical, resident or non-resident, who transfers or causes to transfer property by gift, whether in
trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.
A. In the Case of Gifts made by a Resident (Sec. 101 (A), NIRC as amended)
Dowries or donations made on account of marriage before its celebration or within one year thereafter, by
parents to each of their legitimate, recognized natural, or adopted children to the extent of the first P10,000
Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not
conducted for profit, or to any political subdivision of the said Government
Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution,
accredited non-government organization, trust or philantrophic organization or research institution or
organization, provided not more than 30% of said gifts will be used by such donee for administration purposes
B. In the Case of Gifts Made by a Nonresident not a Citizen of the Philippines (Sec. 101 (B), NIRC as amended)
Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not
conducted for profit, or to any political subdivision of the said Government
Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution,
accredited non-government organization, trust or philantrophic organization or research institution or
organization, provided not more than 30% of said gifts will be used by such donee for administration purposes
C. Tax Credit for Donor's Taxes Paid to a Foreign Country (Sec. 101 (C), NIRC as amended)
In General. - The tax imposed by this Title upon a donor who was a citizen or a resident at the time of donation
shall be credited with the amount of any donor's tax of any character and description imposed by the authority of
a foreign country.
Limitations on Credit. - The amount of the credit taken under this Section shall be subject to each of the
following limitations:
- The amount of the credit in respect to the tax paid to any country shall not exceed the same proportion of the tax against which
such credit is taken, which the net gifts situated within such country taxable under this Title bears to his entire net gifts; and
- The total amount of the credit shall not exceed the same proportion of the tax against which such credit is taken, which the
donor's net gifts situated outside the Philippines taxable under this title bears to his entire net gifts.
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If the gift is made in property, the fair market value at that time will be considered the amount of gift.
In case of real property, the taxable base is the fair market value as determined by the Commissioner of Internal Revenue (Zonal
Value) or fair market value as shown in the latest schedule of values fixed by the provincial and city assessor (MV per Tax
Declaration), whichever is higher. (Sec. 88 and 102, NIRC as amended)
If there is no zonal value, the taxable base is the fair market value that appears in the tax declaration at the time of the gift
4. For purposes of Donor’s Tax, what does the term “Net Gift” mean?
For purposes of the donor’s tax, “NET GIFT” shall mean the net economic benefit from the transfer that accrues to the donee.
Accordingly, if a mortgaged property is transferred as a gift, but imposing upon the donee the obligation to pay the mortgage
liability, then the net gift is measured by deducting from the fair market value of the property the amount of mortgage assumed.
(sec. 11, RR No. 2-2003)
5. Under R.A. No. 7166, any contribution in cash or in kind to any candidate or political party or coalition of parties for campaign
purposes shall not be subject to the payment of any gift tax. What instance will it be subject to Donor’s Tax?
Those contributions in cash or in kind NOT duly reported to the Commission on Elections (COMELEC) shall not be subject to
donor’s tax.
Section 99 (C) of the Tax Code, as amended, provides that any contribution in cash or in kind for campaign purposes shall be
governed by R.A. No. 7166 or the Election Code.
Section 13 of the R.A. No. 7166 specifically states that any provision of law to the contrary notwithstanding any contribution in
cash or kind to any candidate or political party or coalition of parties for campaign purposes, duly reported to the Commission
shall not be subject to the payment of any gift tax (donor’s tax). Accordingly, the BIR can impose donor’s tax on contributions of
this nature. (Q-14, RMC No. 63-2009)
A legally adopted child is entitled to all the rights and obligations provided by law to legitimate children, and therefore, donation
to him shall not be considered as donation made to stranger. (sec. 10, RR No. 2-2003)
7. For purposes of Donor’s Tax, are donations between businesses considered donations made between strangers?
Donation made between business organizations and those made between an individual and a business organization shall be
considered as donation made to a stranger. (sec. 10, RR No. 2-2003)
Gifts, donations, and other contributions received by the Homeowners’ Associations (Associations) are subject to the payment of
donor’s tax pursuant to Section 98 and 99 of the Tax Code, as amended. Endowment or gifts received by such associations are not
exempt from donor’s tax considering that gifts to Associations are not qualified for exemption under Section 101(A)(3) of the Tax
Code. (II, RMC No. 53-2013)
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9. Is an onerous donation or donation in exchange for goods, services or use or lease of properties to Homeowners’ Association
subject to Donor’s Tax?
Pursuant to RMC No. 9-2013, Associations are subject to the corresponding internal revenue taxes imposed under the Tax Code
of 1997 on their income of whatever kind and character. In this regard, contributions to associations in exchange for goods,
services and use of properties constitute as other assessments/charges from activity in exchange for the performance of a service,
use of properties or delivery of an object. As such, these fees are income on the part of the associations that are subject to income
tax under Section 27 of the Tax Code, as amended. (III, RMC No. 53-2013)
10. What is the proper treatment for transactions involving transfer of property other than real property referred to in Section 24
(D) for less than adequate and full consideration?
Where property, other than real property referred to in Section 24 (D) of the NIRC, as amended, is transferred for less than
adequate and full consideration in money or money’s worth, then the amount by which the fair market value of the property
exceeded the value of the consideration shall, for the purpose of Donor’s Tax, be deemed a gift, and shall be included in
computing the amount of gifts made during the calendar year. (Sec. 100, NIRC, as amended)
11. What entities are considered exempted from Donor’s Tax under special laws?
The list below consists of entities considered Donor’s Tax exempt under special laws including, but not limited to the following:
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12. How do we determine the fair market value of the unlisted stocks?
In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets and liabilities are adjusted
to fair market values. The net of adjusted asset minus the adjusted liability value is the indicated value of the equity.
For purposes of this item, the appraised value of real property at the time of sale shall be the highest among the following:
(b) The fair market value as shown in the schedule of values fixed by the Provincial and City Assessors, or
(c) The fair market value as determined by Independent Appraiser. (RR NO. 6-2013) (Annex U)
1. SELL
During your lifetime, you can decide to sell certain assets such as a condominium unit or a piece of land to your intended heirs.
This approach would still require payment of taxes but it would be at a lower rate. For instance, when an individual (in his
personal capacity) sells his assets during his lifetime, the sale will be subject to a 6% capital gains tax on sale of real property plus
the applicable documentary stamp tax and local transfer taxes. You would incur the abovementioned taxes in lieu of the estate
taxes that can go as high as 20%.
When using a sale as an estate planning tool, make sure that it is for an adequate consideration based on prevailing market values;
and that the buyer-heirs have the capacity to pay. Don’t confuse this tax saving tool for simulated sales. Simulated sales are
transfers of property made to look like a contract of sale but in reality are donations (where buyer pays nothing or buyer pays a
price that is grossly inadequate). Simulated sales are illegal and will result to issues with the tax authorities.
2. DONATE
Another way to ensure that the value of your legacy will be protected is by turning over your assets to your children while you are
still alive. You will have fewer assets in your name, but this will translate to a lower estate tax. Donor’s tax would apply on the
transfer by any person of the property by gift. This tax is based on the total net gifts made during the calendar year. Generally, a
graduated donor’s tax rate of 2% to 15% of the value of the net gifts would apply, except if the gift is given to a stranger which
would have a 30% tax rate.
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A word of caution though: be careful with “disposing” your assets too soon and make sure to leave something for yourself. It
would also be best to ensure that your heirs are already mature enough to manage your assets, or else they might end up
mishandling it, leaving them with nothing by the time you pass away.
3. GET INSURED
Life insurance is one of the keys to good estate planning. By getting a life insurance policy and making your heirs irrevocable
beneficiaries, your wealth can easily be passed on to them when you pass away. The insurance proceeds can either be used to pay
the estate tax on your assets, or may even be the inheritance itself. When the insured dies, the insurance proceeds can easily be
transferred in full, and are exempt from estate tax, provided that the beneficiaries are designated as irrevocable. The proceeds are
also exempt from income tax.
TAX RATES
On sale of goods and properties - twelve percent (12%) of the gross selling price or gross value in money of the goods or
properties sold, bartered or exchanged
On sale of services and use or lease of properties - twelve percent (12%) of gross receipts derived from the sale or
exchange of services, including the use or lease of properties
On importation of goods - twelve percent (12%) based on the total value used by the Bureau of Customs in determining
tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such as tax to be paid by the
importer prior to the release of such goods from customs custody; provided, that where the customs duties are determined
on the basis of quantity or volume of the goods, the VAT shall be based on the landed cost plus excise taxes, if any.
On export sales and other zero-rated sales - 0%
Any person who, in the course of trade or business, sells, barters or exchanges goods or properties or engages in the sale or
exchange of services shall be liable to register if:
a. His gross sales or receipts for the past twelve (12) months, other than those that are exempt under Section 109 (A) to (U), have
exceeded One Million Five Hundred Thousand Pesos (P1,500,000.00): or
b. There are reasonable grounds to believe that his gross sales or receipts for the next twelve (12) months, other than those that
are exempt under Section 109 (A) to (U), will exceed One Million Five Hundred Thousand Pesos (P1,500,000.00).
When is a new VAT taxpayer required to apply for registration and pay the registration fee?
New VAT taxpayers shall apply for registration as VAT Taxpayers and pay the corresponding registration fee of five hundred
pesos (P500.00) using BIR Form No. 0605 for every separate or distinct establishment or place of business before the start of their
business following existing issuances on registration.
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Thereafter, taxpayers are required to pay the annual registration fee of five hundred pesos (P500.00) not later than January 31,
every year.
What compliance activities should a VAT taxpayer, after registration as such, do promptly or periodically?
a. Pay the annual registration fee of P500.00 for every place of business or establishment that generates sales;
b. Register the books of accounts of the business/occupation/calling, including practice of profession, before using the same;
c. Register the sales invoices and official receipts as VAT-invoices or VAT official receipts for use on transactions subject to
VAT. (If there are other transaction not subject to VAT, a separate set of non-VAT invoices or non-VAT official receipts need to
be registered for use on transactions not subject to VAT);
d. Filing of the Monthly Value-added Tax Declaration on or before the 20th day following the end of the taxable month (for
manual filers)/on or before the prescribed due dates enunciated in RR No. 16-2005 (for e-filers) using BIR Form No. 2550M and
of the Quarterly VAT Return on or before the 25th day following the end of the taxable quarter using BIR Form No. 2550Q,
reflecting therein gross receipts (for seller of service)/ gross sales (for seller of goods) and output tax (VAT on sales); purchases of
goods and services made in the course of trade or business/exercise of profession and input tax (VAT on purchases), other
allowable tax credits as in the case of advance VAT payment and VAT withheld by government payors, and VAT payable or
excess input VAT, whichever is applicable, with the accredited agent banks (AABs) of the BIR or Revenue Collection Officers
(RCOs) of the BIR (in areas without AAB), for returns with payment, or with the RDO/LTDO having jurisdiction over the
taxpayer (home RDO/LTDO), for returns without payment. (The monthly VAT Declaration and the Quarterly VAT Return shall
reflect the consolidated total for all the taxable lines of activity and all the establishments - head office and branches);
e. Submit with the RDO/LTDO having jurisdiction over the taxpayer, on or before the deadline set in the filing of the Quarterly
VAT Return, the soft copy of the Quarterly Schedule of Monthly Sales and Output Tax (if the quarterly sales exceed
P2,500,000.00), and the soft copy of the Quarterly Schedule of Monthly Domestic Purchases and Input Tax/ the soft copy of the
Schedule of Transactional/Individual Importation ( if the quarterly total purchases exceed P1,000,000.00), reflecting therein the
required data prescribed under existing revenue issuances.
How do we determine the main or principal business of a taxpayer who is engaged in mixed business activities?
In determining the main or principal business of a taxpayer, we apply the predominance test. Under this test, if more than fifty
(50%) of its gross sales and/or gross receipts comes from its business/es subject to VAT, its main/principal business falls within
the VAT system making its status as a VAT person. Otherwise, he can not be considered as a VAT person eligible for the election
provided for under Section 109(2) of the Tax Code.
What is the liability of a taxpayer becoming liable to VAT and did not register as such?
Any person who becomes liable to VAT and fails to register as such shall be liable to pay the output tax as if he is a VAT-
registered person, but without the benefit of input tax credits for the period in which he was not properly registered.
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Who may opt to register as VAT and what will be his liability?
1. Any person who is VAT-exempt under Sec. 4.109-1 (B) (1) (V) not required to register for VAT may, in relation to Sec. 4.109-
2, elect to be VAT-registered by registering with the RDO that has jurisdiction over the head office of that person, and pay the
annual registration fee of P500.00 for every separate and distinct establishment.
2. Any person who is VAT-registered but enters into transactions which are exempt from VAT (mixed transactions) may opt that
the VAT apply to his transactions which would have been exempt under Section 109(1) of the Tax Code, as amended [Sec.
109(2)].
3. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed ten
million pesos (P10,000,000.00) derived from the business covered by the law granting the franchise may opt for VAT registration.
This option, once exercised, shall be irrevocable. (Sec. 119, Tax Code).
4. Any person who elects to register under optional registration shall not be allowed to cancel his registration for the next three (3)
years.
The above-stated taxpayers may apply for VAT registration not later than ten (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. 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
registration.
What are the instances when a VAT-registered person may cancel his VAT registration?
1. If he makes a written application and can demonstrate to the commissioner's satisfaction that his gross sales or receipts for the
following twelve (12) months, other than those that are exempt under Section 109 (A) to (U), will not exceed one million five
hundred thousand pesos (P1,500,000.00); or
2. If he has ceased to carry on his trade or business, and does not expect to recommence any trade or business within the next
twelve (12) months.
The cancellation for registration will be effective from the first day of the following month the cancellation was approved.
1. A VAT invoice for every sale, barter or exchange of goods or properties; and
2. A VAT official receipt for every lease of goods or properties and for every sale, barter or exchange of services.
May a VAT-registered person issue a single invoice/ receipt involving VAT and Non-VAT transactions?
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Yes. He may issue a single invoice/ receipt involving VAT and non-VAT transactions provided that the invoice or receipt shall
clearly indicate the break-down of the sales price between its taxable, exempt and zero-rated components and the calculation of
the Value-Added Tax on each portion of the sale shall be shown on the invoice or receipt.
May a VAT- registered person issue separate invoices/ receipts involving VAT and Non-VAT transactions?
Yes. A VAT registered person may issue separate invoices/ receipts for the taxable, exempt, and zero-rated component of its sales
provided that if the sales is exempt from value-added tax, the term "VAT-EXEMPT SALE" shall be written or printed
prominently on the invoice or receipt and if the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall
be written or printed prominently on the invoice or receipt.
The amount of the tax shall be shown as a separate item in the invoice or receipt.
Sample:
What is the information that must be contained in the VAT invoice or VAT official receipt?
1. Name of Seller
5. Name of Buyer
7. Address of Buyer
9. Date of transaction
10. Quantity
The amount of tax shall be shown as a separate item in the invoice or receipt;
If the sale is exempt from VAT, the term "VAT-EXEMPT SALE" shall be written or printed prominently
on the invoice or receipt;
If the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall be written or
printed prominently on the invoice receipt; and
If the sale involves goods, properties or services some of which are subject to and some of which are zero-
rated or exempt from VAT, the invoice or receipt shall clearly indicate the breakdown of the sales price
between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of
the sale shall be shown on the invoice or receipt.
14. Authority to Print Receipt Number at the lower left corner of the invoice or receipt.
What is the liability of a taxpayer not registered as VAT and issues a VAT invoice/ receipt?
The non-VAT registered person shall, in addition to paying the percentage tax applicable to his transactions, be liable to VAT
imposed in Section 106 or 108 of the Tax Code without the benefit of any input tax credit plus 50% surcharge on the VAT
payable (output tax). If the invoice/ receipts contain the required information, purchaser shall be allowed to recognize an input tax
credit.
What is the liability of a VAT-registered person in the issuance of a VAT invoice/ receipt for VAT-exempt transactions?
If a VAT-registered person issues a VAT invoice or VAT official receipt for a VAT-exempt transaction but fails to display
prominently on the invoice or receipt the words "VAT-EXEMPT SALE", the transaction shall become taxable and the issuer shall
be liable to pay the VAT thereon. The purchaser shall be entitled to claim an input tax credit on his purchase.
Output tax means the VAT due on the sale, lease or exchange of taxable goods or properties or services by any person registered
or required to register under Section 236 of the Tax Code.
Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local purchase of goods, properties or
services, including lease or use of property in the course of his trade or business. It shall also include the transitional input tax
determined in accordance with Section 111 of the Tax Code, presumptive input tax and deferred input tax from previous period.
The term "goods or properties" shall mean all tangible and intangible objects, which are capable of pecuniary estimation and shall
include, among others:
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a. Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business;
b. The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademark, trade
brand or other like property or right;
c. The right or privilege to use in the Philippines of any industrial, commercial or scientific equipment;
d. The right or the privilege to use motion picture films, films, tapes and discs; and
e. Radio, television, satellite transmission and cable television time.
The term "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee,
remuneration or consideration, whether in kind or in cash, including those performed or rendered by the following:
g. Proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts, theatres, and movie houses;
h. Proprietors or operators of restaurants, refreshment parlors, cafes, and other eating places, including clubs and caterers;
i. Dealers in securities;
j. Lending investors;
k. Transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire
and other domestic common carriers by land relative to their transport of goods or cargoes;
l. Common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to
another place in the Philippines;
n. Franchise grantees of electric utilities, telephone and telegraph, radio and/or television broadcasting and all other franchise
grantees, except franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do
not exceed Ten Million Pesos (P10,000,000.00), and franchise grantees of gas and water utilities;
o. Non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and
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p. Similar services regardless of whether or not the performance thereof calls for the exercise of use of the physical or mental
faculties.
a. The lease of use of or the right or privilege to use any copyright, patent, design or model, plan, secret formula or process,
goodwill, trademark, trade brand or other like property or right;
b. The lease or the use of, or the right to use of any industrial, commercial or scientific equipment;
d. The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or
enjoyment of any such property, or right or any such knowledge or information;
e. The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or
the installation or operation of any brand, machinery or other apparatus purchased from such non-resident person;
f. The supply of technical advice, assistance or services rendered in connection with technical management or administration of
any scientific, industrial or commercial undertaking, venture, project or scheme;
g. The lease of motion picture films, films, tapes and discs; and
h. The lease or the use of or the right to use radio, television, satellite transmission and cable television time.
It is a sale, barter or exchange of goods, properties and/or services subject to 0% VAT pursuant to Sections 106 (A) (2) and 108
(B) of the Tax Code. It is a taxable transaction for VAT purposes, but shall not result in any output tax. However, the input tax on
purchases of goods, properties or services, related to such zero-rated sales, shall be available as tax credit or refund in accordance
with RR No. 16-2005.
The following services performed in the Philippines by VAT-registered person shall be subject to zero percent (0%) rate:
a. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are
subsequently exported where the services are paid for in acceptable foreign currency and accounted for in accordance with the
rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
b. Services other than processing, manufacturing or repacking rendered to a person engaged in business conducted outside the
Philippines or to a non-resident person engaged in business who is outside the Philippines when the services are performed, the
consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations
of the Bangko Sentral ng Pilipinas (BSP);
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c. Services rendered to persons or entities whose exemption under special laws or international agreements to which the
Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;
d. Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use
thereof; Provided, however, that the services referred to herein shall not pertain to those made to common carriers by air and sea
relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines, the
same being subject to twelve percent (12%) VAT under Sec. 108 of the Tax Code starting Feb. 1, 2006;
e. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise
whose export sales exceeds seventy percent (70%) of total annual production;
f. Transport of passengers and cargo by domestic air or sea carriers from the Philippines to a foreign country. Gross receipts of
international air carriers doing business in the Philippines and international sea carriers doing business in the Philippines are still
liable to a percentage tax of three percent (3%) based on their gross receipts as provided for in Sec. 118 of the Tax Code but shall
not be liable to VAT; and
g. Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind,
hydropower, geothermal and steam, ocean energy, and other shipping sources using technologies such as fuel cells and hydrogen
fuels; Provided, however that zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of
energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power .
The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:
a. Export sales
The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping
arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so
exported, paid in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with
the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
The sale of raw materials or packaging materials to a non-resident buyer for delivery to as resident local export-oriented
enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid
for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;
The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy
percent (70%) of total annual production;
Sale of gold to the BSP;
Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments
Code of 1987, and other special laws; and
The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air transport
operations; Provided, that the same is limited to goods, supplies, equipment and fuel pertaining to or attributable to the
transport of goods and passengers from a port in the Philippines directly to a foreign port, or vice-versa without docking
or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the
purpose of unloading passengers and/or cargoes that originated from abroad, or to load passengers and/or cargoes bound
for abroad; Provided, further, that if any portion of such fuel, goods or supplies is used for purposes other than the
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mentioned in this paragraph, such portion of fuel, goods and supplies shall be subject to twelve percent (12%) output
VAT.
The sale to a non-resident of goods, except those mentioned in Sections 149 and 150 of the Tax Code, assembled or manufactured
in the Philippines for delivery to a resident in the Philippines, paid for in acceptable foreign currency and accounted for in
accordance with the rules and regulations of the BSP.
c. Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement
Sale of goods or property to persons or entities who are tax-exempt under special laws or international agreements to which the
Philippines is a signatory, such as, Asian Development Bank (ADB), International Rice Research Institute (IRRI), etc.
Taxpayers shall file their application directly with the Audit Information, Tax Exemption and Incentives Division (AITEID) under
the Assessment Service, or with the LTAID I and II, BIR National Office, as the case may be.
What is a Contractor's Final Payment Release Certificate and where should taxpayers file their application for this?
The Contractor's Final Payment Release Certificate is issued by the BIR before a government contractor is fully paid for his
contract with the government. Taxpayers may file their application at the BIR National Office at the Audit Information, Tax
Exemption and Incentives Division (AITEID)
a. 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. Transfer of goods or properties not in the course of business can take place when VAT-registered person
withdraws goods from his business for his personal use;
c. Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned.
Consigned goods returned by the consignee within the 60-day period are not deemed sold;
d. Retirement from or cessation of business, with respect to all goods on hand, whether capital goods, stock-in-trade, supplies or
materials as of the date of such retirement or cessation, whether or not the business is continued by the new owner or successor.
The following circumstances shall, among others, give rise to transactions "deemed sale";
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Change of ownership of the business. There is a change in the ownership of the business when a single proprietorship
incorporated; or the proprietor of a single proprietorship sells his entire business.
Dissolution of a partnership and creation of a new partnership which takes over the business.
It is a sale of goods, properties or service and the use or lease of properties which is not subject to output tax and whereby the
buyer is not allowed any tax credit or input tax related to such exempt sale.
a. Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally
used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefore;
b. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including
ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race
horses, fighting cocks, aquarium fish, zoo animals and other animals considered as pets);
c. Importation of personal and household effects belonging to residents of the Philippines returning from abroad and non-resident
citizens coming to resettle in the Philippines; Provided, that such goods are exempt from custom duties under the Tariff and
Customs Code of the Philippines;
d. Importation of professional instruments and implements, wearing apparel, domestic animals, and personal household effects
(except any vehicle, vessel, aircraft, machinery and other goods for use in the manufacture and merchandise of any kind in
commercial quantity) belonging to persons coming to settle in the Philippines, for their own use and not for sale, barter or
exchange, accompanying such persons, or arriving within ninety (90) days before or after their arrival, upon the production of
evidence satisfactory to the Commissioner of Internal Revenue, that such persons are actually coming to settle in the Philippines
and that the change of residence is bonafide;
f. Services by agricultural contract growers and milling for others of palay into rice, corn into grits, and sugar cane into raw sugar;
g. Medical, dental, hospital and veterinary services except those rendered by professionals;
h. Educational services rendered by private educational institutions duly accredited by the Department of Education (DepED), the
Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority (TESDA) and those
rendered by the government educational institutions;
j. Services rendered by regional or area headquarters established in the Philippines by multinational corporations which act as
supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific Region and
do not earn or derive income from the Philippines;
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k. Transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws
except those granted under P.D. No. 529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949;
l. Sales by agricultural cooperatives duly registered and in good standing with the Cooperative Development Authority (CDA) to
their members, as well as of their produce, whether in its original state or processed form, to non-members, their importation of
direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production
and/or processing of their produce;
m. Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered and in good standing with the
Cooperative Development Authority;
n. Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with and in good standing with CDA;
Provided, that the share capital contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00) and regardless
of the aggregate capital and net surplus ratably distributed among the members;
p. The following sales of real properties are exempt from VAT, namely:
1. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business;
2. Sale of real properties utilized for low-cost housing as defined by RA No. 7279, otherwise known as the "Urban Development
and Housing Act of 1992" and other related laws, such as RA No. 7835 and RA No. 8763;
3. Sale of real properties utilized for specialized housing as defined under RA No. 7279, and other related laws, such as RA No.
7835 and RA No. 8763, wherein price ceiling per unit is P225,000.00 or as may from time to time be determined by the HUDCC
and the NEDA and other related laws;
4. Sale of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and below, or house and lot and
other residential dwellings valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below where the instrument
of sale/ transfer/ disposition was executed on or after July 1, 2005; Provided, that not later than January 31, 2009 and every three
(3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index, as published
by the National Statistics Office (NSO); Provided, further, that such adjustment shall be published through revenue regulations to
be issued not later than March 31 of each year.
q. Lease of residential units with a monthly rental per unit not exceeding Ten Thousand Pesos (P10,000.00), regardless of the
amount of aggregate rentals received by the lessor during the year; Provided, that not later than January 31, 2009 and every three
(3) years thereafter, the amount of P10,000.00 shall be adjusted to its present value using the Consumer Price Index, as published
by the NSO;
r. Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular
intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements;
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s. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine equipment and spare parts thereof for
domestic or international transport operations; Provided, that the exemption from VAT on the importation and local purchase of
passenger and/or cargo vessels shall be limited to those of one hundred fifty (150) tons and above, including engine and spare
parts of said vessels; Provided, further, that the vessels to be imported shall comply with the age limit requirement, at the time of
acquisition counted from the date of the vessel's original commissioning, as follows: (a) for passenger and/or cargo vessel, the age
limit is fifteen (15) years old, (b) for tankers, the age limit is ten (10) year old, and (c) for high-speed passengers crafts, the age
limit is five (5) years old; Provided, finally, that exemption shall be subject to the provisions of Section 4 of Republic Act No.
9295, otherwise known as "The Domestic Shipping Development Act of 2004";
t. Importation of life-saving equipment, safety and rescue equipment and communication and navigational safety equipment, steel
plates and other metal plates including marine-grade aluminum plates, used for shipping transport operations; Provided, that the
exemption shall be subject to the provisions of Section 4 of Republic Act No. 9295, otherwise known as "The Domestic Shipping
Development Act of 2004".
u. Importation of capital equipment, machinery, spare parts, life-saving and navigational equipment, steel plates and other metal
plates including marine-grade aluminum plates to be used in the construction, repair, renovation or alteration of any merchant
marine vessel operated or to be operated in the domestic trade. Provided, that the exemption shall be subject to the provisions of
Section 19 of Republic Act No. 9295, otherwise known as the "The Domestic Shipping Development Act of 2004".
v. Importation of fuel, goods and supplies engaged in international shipping or air transport operations; Provided, that the said
fuel, goods and supplies shall be used exclusively or shall pertain to the transport of goods and/or passenger from a port in the
Philippines directly to a foreign port, or vice-versa, without docking or stopping at any other port in the Philippines unless the
docking or stopping at any other Philippine port is for the purpose of unloading passengers and/or cargoes that originated form
abroad, or to load passengers and/or cargoes bound for abroad; Provided, further, that if any portion of such fuel, goods or
supplies is used for purposes other that the mentioned in the paragraph, such portion of fuel, goods and supplies shall be subject to
12% VAT;
w. Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial
intermediaries, such as money changers and pawnshops, subject to percentage tax under Sections 121 and 122, respectively of the
Tax Code; and
x. Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding
paragraphs, the gross annual sales and/or receipts do not exceed the amount of One Million Five Hundred Thousand Pesos
(P1,500,000.00). Provided, that not later than January 31, 2009 and every three (3) years thereafter, the amount of P1,500,000.00
shall be adjusted to its present value after using the Consumer Price Index, as published by the NSO.
What are the previously exempt transactions that are now subject to VAT?
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Coal and natural gas;
Petroleum products;
Passenger cargo vessels of more than 5,000 tons;
Work of art, literary works, musical composition;
Generation, transmission and distribution of electricity including that of electric cooperatives;
Sale of residential lot valued at more than P1,500,000.00;
Sale of residential house & lot/dwellings valued at more than P2,500,000.00;
Lease of residential unit with a monthly rental of more than P10,000;
III. What is the treatment for Withholding of VAT on Government Money Payments?
The goverment 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/or
services taxed at twelve percent (12%) VAT pursuant to Sections 106 and 108 of the Tax Code, deduct and
withhold a Final VAT due at the rate of five percent (5%) of the gross payment.
The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the seller. The remaining seven percent
(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 GOCCs in lieu of the actual input VAT directly attributable or ratably
apportioned to such sales. Should actual input VAT attributable to sales to government exceeds seven percent (7%) of gross
payments, the excess may form part of the sellers' expense or cost. On the other hand, if actual input VAT attributable to sale to
government is less than seven percent (7%) of gross payment, the difference must be closed to expense or cost.
The government or any of its political subdivisions, instrumentalities or agencies including GOCCs, as well as
private corporation, individuals, estates and trusts, whether large or non-large taxpayers, shall withhold twelve
percent (12%) VAT with respect to the following payments:
IV. In what grounds can the Commissioner of Internal Revenue suspend the business operations of a taxpayer?
The Commissioner or his authorized representative is empowered to suspend the business operations and temporarily close the
business establishment of any person for any of the following violations:
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The temporary closure of the establishment shall be for the duration of not less than five (5) days and
shall be lifted only upon compliance with whatever requirements prescribed by the Commissioner in
the closure order.
To prove that the supply of services is subject to VAT at a rate of zero percent:
Q. What is the difference between zero rating and exempting a good in the VAT?
A. For a “zero-rated good,” the government doesn’t tax its sale, but allows credits for the value-added tax (VAT) paid on
inputs. If a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a
credit for the VAT they pay on inputs to produce it.
ZERO RATING
Almost all countries apply preferential rates to some goods and services, making them either “zero rated” or “exempt.” For a
“zero-rated good,” the government doesn’t tax its retail sale, but allows credits for the value-added tax (VAT) paid on inputs. This
reduces the price of a good. Governments commonly use zero-rated goods to lower the tax burden on low-income households by
zero-rating essential goods, such as food and utilities or prescription drugs.
EXEMPTING
If, by contrast, a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a
credit for the VAT they pay on inputs to produce it. Because exempting breaks the VAT’s chain of credits on input purchases, it
can sometimes raise prices and revenues. Hence, governments generally only use exemptions when value-added is hard to define,
such as with financial and insurance services.
Welfare
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Products, service, or groups that will continue to be VAT-exempt
Food and agricultural products
Senior citizens
Persons with Disability (PWD)
Cooperatives
Tourism
Education
Renewable energy
Health
Enterprises and BPOs located in Special Economic Zones
Condominium association dues
Rentals and leases below P15,000 per month
The following items, meanwhile, will now also enjoy the benefit of not paying VAT.
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