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The sale of properties which may be considered as ordinary assets would be subject to the 12%] VAT effective February 1, 2006.
Tax base of output VAT
The tax base of the 12% output VAT is the selling price (SP) or the fair market value (FMV) of the property whichever is higher.
If VAT is not billed separately in the document of sale, the selling price stated in the deed is deemed inclusive of VAT. Thus, to
get the selling price without VAT, divide the selling price in the deed by 1.12. To get the VAT, multiply the selling price without
VAT by .12.
What if the gross selling price in the document of sale is equal to the zonal value or market value of the property? Will the selling
price without VAT be effectively lower than the zonal or market value of the property?
No, the zonal/market value shall be considered as net of the output VAT.
***the VAT should be separately indicated in the document of sale and official receipt as there are penalties for noncompliance.
VAT payable
The amount of VAT payable is the difference between the output VAT and input VAT. Keep the VAT-registered official receipts
(for services purchased) and invoices (for goods purchased) supporting your business expenses so you can claim input VAT
which can reduce your output VAT payable.