INPUT VAT

ERIELE JUNE G. RIVERA, CPA, CTT, MBA

 Definition

Refers to the VAT due or paid by a VAT-

registered person on importation or
local purchases of goods, properties, or
services, including lease or use of
properties in the course of his trade or
business.
Requisites of a creditable
input VAT
The input VAT must have been
paid or incurred in the course of
trade or business.
The input VAT is evidenced by a
VAT invoice or official receipt .
Requisites of a creditable
input VAT
The VAT invoice or receipt must be
issued by a VAT-registered person.
Input VAT is incurred in relation to
vatable sales not from exempt sales.
 ILLUSTRATION
Mrs. A had a P300,000 output VAT in the month. She also made the
following purchases during the month:
Goods from non-VAT suppliers - P280,000
Goods from VAT suppliers with VAT invoices - P224,000
Importation of car for personal use, VAT inclusive - P1,120,000
Importation of grapes and apples for sale - P300,000
Importation of merchandise for sale, VAT inclusive - P896,000
Services from VAT suppliers, evidenced by ordinary receipts - P120,000

How much should be the creditable input VAT?

 ILLUSTRATION
ABC Corp. had the following input VAT during the quarter:
Input VAT traceable to regular domestic sales - P400,000
Input traceable to VAT-exempt sales - P30,000
Input VAT traceable to export sales - P600,000

The creditable input VAT shall be:

CHECKPOINT 1:
1. Only VAT-registered taxpayers can claim
input VAT.
2. There is no input VAT from purchases
made from non-VAT-registered suppliers.
3. The total consideration paid by
purchasers to VAT taxpayers includes the
selling price and the VAT.
CHECKPOINT 1:
4. A non-VAT registered person purchased goods
invoiced at P112,000 from a VAT-registered person.
The claimable input VAT shall be
5. Mr. A, a VAT taxpayer, purchased the following
from a VAT-taxpayer:
VAT exempt goods - P20,000
Vatable goods - P40,000
Total invoice price = P60,000
Compute the input VAT allowable to Mr. A.
 Transitional Input VAT
refers to the input VAT
on inventory that a
Types of business already owns
Input VAT when it becomes VAT-
registered. It allows the
1. Transitional business to claim VAT
Input VAT credits on these items,
even though they were
purchased before VAT
registration.
 Rule: 2 % of the Beg.
Inventory of goods,
Types of materials, or supplies or
the actual VAT paid
Input VAT thereon whichever is
1. Transitional higher (RMC 62-2005
states that exempt BI
Input VAT shall be excluded on the
basis of 2% transitional
input VAT)
Types of
Timing: The TIV shall be
Input VAT claimable in the month of
1. Transitional registration as a VAT
Taxpayer.
Input VAT
 ILLUSTRATION
Mr. A became liable to VAT after exceeding the VAT threshold in
January 2025. Mr. A had the following beginning inventory for Feb
2025:

VAT-exempt goods - P20,000

Vatable goods:
Purchased from non-VAT sellers - P60,000
Purchased from VAT sellers - P11,200

The amount of TIV is

 ILLUSTRATION
ABC General Merchandise exceeded the VAT threshold in
December 2024. It had the following inventory of goods at the start
of January 2025:
Frozen meat, eggs and dried fish - P40,000
Fruits and vegetables - P50,000
Grocery items (all from VAT suppliers) - P22,400
Appliances (from non-VAT suppliers) - P30,000

TIV amounts to
CHECKPOINT 2:
1. ABC, a realty development company,
transitioned as a VAT taxpayer with the
following initial inventory:
Raw land acquired from a non-VAT seller - P10M
Various equipment - P8M
Office building - P20M
Land where the office building stands P4M

TIV shall amount to

CHECKPOINT 2:
2. Ms. B became subject to VAT effective the month of Feb.
She had the following beg. inv in Feb:
Purchases from non-VAT suppliers - P30,000
Purchases from VAT suppliers, exclusive of VAT - P220,000

What is the TIV?

Types of The regular input VAT is
the VAT paid on:
Input VAT a. Domestic purchase of
2. Regular goods, services or properties
b. Importation of goods or
Input VAT service
 Persons or firms engaged
in the processing of
SaMaMiCoPaRe shall be
Types of Input allowed a PIT.
VAT Sa-rdines
Ma-ckerel
3. Presumptive Mi-lk
Input Tax Co-oking oil
Pa-cked noodle based
instant meals
Re-fined sugar
Types of Input Rule: 4% of the gross
value in money of the
VAT purchase of primary
3. Presumptive agricultural products
which are used in
Input Tax production
 ILLUSTRATION
ABC Corp, a VAT-registered cooking oil manufacturer, purchased
the following materials and supplies in the processing of cooking
oils during the month:
Copra - P1,200,000
Hexane solvent - P50,000, exclusive of VAT
Cans - P200,000, exclusive of VAT
Sodium carbonate - P80,000, exclusive of VAT
Activated carbon - P100,000, exclusive of VAT

Presumptive input VAT amounts to

CHECKPOINT 3:
1. ABC, a sardine's canning company, had the following
purchases as inputs for its manufacturing operations
during the month:
Tin cans, exclusive of VAT - P80,000
Tomatoes - P150,000
Sardines - P200,000
Labels, exclusive of VAT - P20,000

Q1: PIV allowable is

Q2: Total creditable input VAT for the month
CHECKPOINT 3:
2. ABC Sugar is a processor of refined sugar. It
purchased a total of P500,000 sugar cane for
processing. It purchased other supplies at a cost of
P80,000, exclusive of VAT. What is the allowable
presumptive input VAT?