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Notes Output VAT - BUSINESS TAX
Accountancy (National University Philippines)
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OUTPUT VAT
A. REGULAR OUTPUT VAT
Sources of Regular Output VAT
1. Sales of Vatable Goods
2. Sales of Vatable Services
3. Sales of Vatable Properties
4. Transaction Deemed Sales
SALES OF VATABLE GOODS
GENERAL
- 12% VAT based on Gross Selling Price
RULE:
- If the gross selling price is unreasonably lower, the VAT
shall be based on the fair value of the goods sold.
Unreasonably
Lower Selling
Unreasonably Lower SP, definition
Price
GSP is lower by more than 30% of the actual fair market
value of the goods sold.
SALES OF VATABLE SERVICES
- 12% VAT based on the Gross Receipts.
SALES OF VATABLE REAL PROPERTIES
Tax Base Treatment
- The computed output VAT is not
Cash Sale amortized. Thus, directly/wholly
reported on the month of sale.
GSP Whichever is
FMV - Deferred Payment is not qualified
Deferred HIGHEST
Zonal Value on the installment treatment of
Payment
VAT
Basis *FMV and ZV is presumed to be - Treated as CASH sales
exclusive of VAT unless otherwise stated.
- Qualified to be an installment if
*GSP is legally presumed to be VAT initial payment (Collection/GSP)
inclusive. does not exceed 25% of the GSP
Installment - Output VAT is amortized in
proportioned to the payment over
selling price (Payments/GSP x
Output VAT)
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Sales of properties considered “ordinary assets”
(RR4-2007) Even if the real property is not primary held for sale to customers or held for lease in the
ordinary course of business but the same is used in the trade or business of the seller, the sale thereof
shall be subject to VAT being a transaction incidental to the taxpayer’s main business.
TRANSACTION DEEMED SALES
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
b. Distribution or transfer to
i. Shareholders or investors share in the profits of VAT-registered persons
ii. Creditors in payments of debt or obligation
c. Consignment of goods if actual sale is not made within 60 days following the date such goods were
consigned.
d. Retirement from or cessation of business with respect to all the goods on hand whether capital goods,
stock in trade, supplies or materials as of the date of cessation, whether or not the business is continued by
the new owner or successor.
e. Cessation of status as a VAT-registered person.
B. ZERO RATED SALES
Zero-Rated Sales of Goods
Two types of zero-rated sales of goods
A. Export Sales
B. Effectively Zero-rated sales
EXPORT SALES
The term export sales will ONLY include:
1. Direct Export
2. Sales to economic zones and tourism enterprise zones
3. Sales of goods or properties, supplies, equipment and fuel to persons engaged in international
shipping or international air transport operations
EXPORT SALES
Requisites:
1. Paid in acceptable foreign currency
Direct Export
2. Accounted for in accordance with the rules and
regulations of the BSP
Examples of Philippine Ecozones:
Sales to economic zones 1. PEZA
and tourism enterprise 2. Cagayan Economic Zone
zones 3. Zamboanga Special Economic Zone
4. Clark Special Economic Zone
5. Clark Freeport Zone
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6. Poro Point Special Economic and Freeport Zone
7. John Hay Special Economic Zone
8. Aurora Special Economic Zone
Sales of goods or
properties, supplies,
equipment and fuel to
persons engaged in
international shipping or
international air
transport operations
Not yet done 😉
