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:. Value-Added Tax

Contents

 

Description

Value-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale of goods and services and on the imports of goods into the Philippines. It is an indirect tax, which can be passed on to the buyer.



Who Are Required To File VAT Returns

  • Every person or entity who in the course of his trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Five Hundred Thousand Pesos (P 1,500,000.00) for any twelve month period
  • A person required to register as VAT taxpayer but failed to register
  • A person who imports goods
  • Professional practitioners
  • Professional Practitioners (PPs) are formerly classified as non-VAT taxpayers and were exempt from the Value-Added Tax and Percentage taxes under Section 109 of the National Internal Revenue Code (hereinafter referred to as the Code), until December 31, 2002. Prior to this date, they were subject only to Income Tax under Section 24 of the Code.  Effective January 1, 2003, however, by virtue of Republic Act Nos. 7716 and 9010, which were implemented by Revenue Regulation Nos. 1-2003 and 3-2003, services of PPs are also subject to either VAT or 3% Percentage Tax.  Pursuant to Revenue Regulations No. 16-2005, services of Professional Practitioners are subject to VAT if gross professional fees exceed P1,500,000.00 for a 12-month period and subject to 3% Percentage Tax if gross professional fees total P1,500,000.00 and below for a 12-month period.

"Professional Practitioners" include the following:

o        Certified Public Accountants

o        Insurance Agents (Life & Non-life)

o        Other Professional Practitioners required to pass the government examination

o        Others



Monthly VAT Declarations

Tax Form
BIR Form 2550 M - Monthly VAT Declarations

Documentary Requirements
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable

2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax At Source (SAWT), if applicable

3. Duly approved Tax Debit Memo, if applicable

4. Duly approved Tax Compliance Certificate, if applicable

5. Authorization letter, if return is filed by authorized representative.

Procedures
1. Fill-up BIR Form 2550 M in triplicate copies.

2. If there is payment:

         Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office (RDO)/ Large Taxpayers District Office (LTDO) where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment.

         In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment.

         Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.        

3. If there is no payment:

         Proceed to the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments.

         Receive your copy of the duly stamped and validated form from the RDO representative

Deadline

         Manual Filing

Not later than the 20th day following the end of each month

         Filing Through eFPS

Group A - within twenty five (25) days following the end of the month
Group B - within twenty four (24) days following the end of the month
Group C - within twenty three (23) days following the end of the month
Group D - within twenty two (22) days following the end of the month
Group D - within twenty one (21) days following the end of the month



Quarterly VAT Returns

Tax Form
BIR Form 2550 Q - Quarterly VAT Return

Documentary Requirements
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable

2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax At Source (SAWT), if applicable

3. Duly approved Tax Debit Memo, if applicable

4. Duly approved Tax Compliance Certificate, if applicable

5. Previously filed return and proof of payment, for amended return

6. Authorization letter, if return is filed by authorized representative

7. Summary List of Sales (if quarterly total Sales/Receipts (net of VAT) exceeds P 2,500,000) with the following information:

a.      BIR-registered name of the buyer who is engaged in business/exercise of profession;

b.      Taxpayer Identification Number (TIN) of the buyer (Only for sales that are subject to VAT);

c.       Exempt Sales;

d.      Zero-rates Sales;

e.      Sales subject to VAT (exclusive of VAT)

f.    Sales subject to Final VAT Withheld; and

g.        Output Tax (VAT on Sales subject to 12%)

8. Summary List of Purchases (if quarterly total purchases (net of VAT) exceeds P 1,000,000) with the following information:

a.      BIR-registered name of the seller/supplier/service-provider;

b.      Address of seller/supplier/service-provider;

c.       Taxpayer Identification Number (TIN) of seller/supplier/service-provider

d.      Exempt purchases;

e.      Zero-rated purchases;

f.        Purchases subject to VAT (exclusive of VAT) - on services;

g.      Purchases subject to VAT (exclusive of VAT) - on capital goods;

h.      Purchases subject to VAT (exclusive of VAT) - on goods other than capital goods

i.    Purchases subject to Final VAT Withheld

j.        Creditable Input Tax

k.        Non-creditable Input Tax

NOTE: Creditable input taxes and non-creditable input taxes are to be computed not on a per supplier basis but on a per month basis.

9. The Quarterly Summary List of Importation with the following information:

      a.      Import Entry Declaration Number;

      b.      Assessment/Release Date;

      c.       Date of Importation;

      d.      Name of the Seller;

      e.      Country of Origin;

      f.        Dutiable Value;

      g.      All Charges Before Release from Customs Custody;

      h.      Landed Cost:

      i.        Exempt

      j.        Taxable (Subject to VAT)

      k.      VAT paid;

      l.        Official Receipt (OR) Number of the Official Receipt evidencing payment of tax; and

      m.    Date of VAT payment

Procedures
1. Fill-up BIR Form 2550 Q in triplicate copies.

2. If there is payment:

         Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 Q with the required attachments and your payment.

         In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments and your payment.

         Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.

3. If there is no payment:

          Proceed to the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments.

          Receive your copy of the duly stamped and validated form from the RDO representative.

NOTE:
1. For taxpayers with branches, only one consolidated return shall be filed for the principal place of business or head office and all the branches.

2. The Quarterly List of Sales and Purchases shall be submitted in magnetic form using 3.5-inch floppy diskette following the format provided under Section 4.110-4 (Subsection G) of RR 8-2002.

3. The Quarterly List of Sales and Purchases shall be submitted through electronic filing facility for taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and those enrolled under the eFPS.

Deadline
Within twenty five (25) days following the close of taxable quarter of the taxpayer (for manual filing).

Within thirty (30) days following the close of taxable quarter of the taxpayer (for taxpayers under the jurisdiction of the LTS and for filing through eFPS)



Tax Rates

          For output tax (0% or 12%)

          For input tax on importation of goods or local purchases of goods, properties or services, including lease or use of properties, in the course of trade or business (0% or 12%)

 

          For creditable input tax on advance VAT payments made by the seller/owner of refined sugar and importer/miller of wheat/flour (12%)


 



Related Revenue Issuances

          RR No. 5-87-Regulations implementing the provisions of Title IV of the Tax Code imposing VAT on importation of goods and sales and services

          RR No. 3-89 - Regulations governing the imposition of 10% VAT on deposits for returnable containers

 

          RR No. 5-93 - Implementing guidelines requiring the monthly payment of VAT and amending thereby Section 110 of the Tax Code