Value Added

Taxes Part 2

Taxation Review

Mr. James Dane T. Adayo

 COMPLIANCE
REQUIREMENTS
Invoicing Requirement, Refund of Input Taxes and
Others
  RA 9337 (RVAT) RR 16-2005
a. VAT Invoice and A VAT-registered person shall issue:
VAT Official Receipt a) a VAT invoice for every sale, barter, or exchange of goods or properties; and
b) a VAT official receipt for every lease of goods or properties and for every sale, barter
or exchange of services.
b. Invoicing The following information shall be indicated in VAT invoice or BAT official receipt:
Requirement a) A statement that the seller is VAT-registered person followed by TIN;
b) The total amount to be paid with the indication that such amount includes the VAT:
1) Amount of tax shall be shown as a separate item in the invoice or receipt;
2) “VAT-exempt sale” if sale is exempt;
3) “Zero-rated sale”, if the sale is subject to zero percent VAT;
4) If mixed sales, breakdown of sales price between taxable, exempt and zero-rated
components and the calculation of the VAT on each portion.
Separate invoices or receipts may be issued for each type of sales.
c) The name, business style, if any, address and TIN of the customer, in case the sales
amount to P1,000 or more.
Invoicing and Recording Deemed Sale Transaction
Deemed Transaction
a. Transfer, use or consumption
not in the course of trade or
business;
b. Distribution or transfer to
shareholders or investors or to
creditor
in payment of debt or obligation;
c. Consignment of goods if not
sold within 60 days following the
date of consignment;
d. Retirement from or cessation of
business
Invoicing and Recording
Memorandum entry
Invoice shall be prepared at the time of the occurrence of the transaction
and shall be duly recorded in the subsidiary sales journal.
The total amount of “deemed sale” shall be included in the return to be
filed for the month or quarter.
Same as 2) above
An inventory shall be prepared and submitted to the RDO having
Jurisdiction over the taxpayer’s principal place of business not later than 30
days after retirement or cessation from business.
VAT Returns and Payment of Value-Added Tax
a. Monthly VAT Declaration and Payment of VAT
1) Filing of the declaration and Not later than 20th day following the end of the first two (2) months
payment of value-added tax in a quarter
2) Taxpayers enrolled with Group A – 25 days following the end of the month
Electronic Filing and Payment B – 24 days following the end of the month
Systems (EFPS) C – 23 days following the end of the month
D – 22 days following the end of the month
E – 21 days following the end of the month
VAT Returns and Payment of Value-Added Tax
Filing of Quarterly VAT Return and PAYMENT of VAT
1) Filing of quarterly return and Within twenty-five (25) day following the close of the taxable quarter.
payment of value-added tax
2) Meaning of taxable The term “taxable quarter” shall mean the quarter that is synchronized to the
quarter income tax quarter pf the taxpayer (i.e. calendar quarter or fiscal quarter)
3) Quarterly return includes the Amounts reflected in the monthly VAT declarations for the first two (2)
amounts reflected in the months of the quarter shall still be included in the quarterly VAT return,
monthly VAT declarations which reflects the cumulative figures for the taxable quarter.
4) Monthly payments to be Payments un the monthly VAT declarations shall be credited in the quarterly
credited in the quarterly VAT VAT return to arrive at the net VAT payable, or excess input tax/overpayment
Return as the end of the quarter.
5) Deductions from the The VAT payable/Excess Input tax for each taxable quarter shall be reduced
quarterly VAT Payable by the total amount of taxes previously paid for the immediately preceding
(excess input tax) two (2) months, and the advance payments/creditable VAT withheld by the
payors for the three months of the quarter
c. Exercise

The following data for the current year are presented to you:
Output tax Input tax
January P100,000 P 80,000
February 120,000 110,000
March 80,000 120,000
April 150,000 100,000
May 90,000 50,000
June 110,000 60,000

Compute the VAT payable for the months of January to June

D. Exercise
Love Company reported the following in its books for the month:

Receipts from transport of passengers, net of VAT P1,000,000

Receipts from transport of cargoes, net of VAT 250,000
Receivables from transport of passengers 75,000
Receivables from transport of cargoes 25,000
Payments for repairs of transport unit, net of VAT 15,000
Salaries of personnel 150,000
Purchase of spare parts, net of VAT 30,000
Registration with the Land Transportation Office 5,000
Premiums on bus insurance, net of VAT 7,500

How much is the VAT payable?

Payment of VAT on Importation

The VAT on importation shall be paid by the importer prior to the release of such goods from customs
custody.
Where to File and Pay VAT
a. Where to file The monthly declaration and quarterly returns shall be filed with:
monthly VAT 1) Bank duly accredited by the Commissioner of Internal Revenue located in the revenue
declaration and district office where such taxpayer (head office of the business establishment) is required
quarterly VAT return to register.
if payment is 2) In the absence of accredited bank, the monthly VAT declaration and quarterly return
Involved shall be filed with Revenue District Officer, Collection Agent, duly authorized Treasurer of
the Municipality /City where such taxpayer (head office of the business establishment) is
required to be registered.
b. Where to file 1) The monthly VAT declaration and the quarterly VAT return, where no payment is
monthly VAT involved, shall be filled with:
declaration and a) Revenue District/Large Taxpayer District Office/ Large Taxpayer Assistance
quarterly VAT return b) Collection Agent;
if no payment is c) Duly authorized Municipal/City Treasurer of the Municipality or City where the taxpayer
involved (head office of the business establishment) is registered or required to be registered.
2) Only one consolidated quarterly VAT return or monthly VAT declaration covering the
results of operations of the head office as well as the branches for all lines of business
subject to VAT shall be filed by the taxpayer, for every return period, with the BIR office
where the taxpayer is required to be registered.
 
Submission of Summary List of Sales and Purchases
a. Persons required to All persons liable to VAT
submit summary list
of sales or purchases
b. When to submit The quarterly summary list shall be submitted on the time such quarterly return is due.
SLSP If EFPS additional 5 days is given
 
Wrap Up Exercises VAT
1. When a VAT – registered person distribute or transfer to shareholders or investors in kind assets as
share in the profits basis will be:
a. Cost or fair market value, whichever is higher
b. Cost
c. Cost or fair market value, whichever is lower
d. Fair market value

2. KimmyChou is engaged in the following:

• Medical practice, gross receipts of P1,000,000
• Trucking business, gross receipts of P250,000
• Lease of apartment building (monthly rental is P12,000 per unit), gross receipts of P840,000
She is not VAT-registered. Which of the following statements is correct?
a) Shee can optionally register under the VAT system.
b) She is mandatorily required to register under the VAT system.
c) She is not subject to any percentage tax.
d) She is considered a VAT-registrable taxpayer.
Wrap Up Exercises VAT
3. A dealer in securities has the following data for the year 2018:

Sales, shares held as inventory P2,000,000

Sales, shares held as investment 750,000
Cost, shares held as inventory 1,000,000
Cost, shares held as investment 250,000
Supplies expense, net of VAT 50,000
Rent expense, net of VAT 100,000

How much is the VAT payable?

4. Guinivere is an operator of parking lots. What business tax is due on his income from the business?
A. Common Carrier’s Tax
B. Gross Receipts Tax
C. Value-added Tax
D. Amusement Tax
Wrap Up Exercises VAT
5. Under the TRAIN Law, how much is the threshold for the sale of house and lot, and other residential
dwellings for it to be considered as VAT exempt?
A. P1,000,000
B. P2,500,000
C. P1,919,500
D. P3,000,000

6. Which of the following is considered as a VAT-exempt sale under the TRAIN Law?
A. Sale or lease of goods or services to Senior Citizens and Persons with Disabilities
B. Sale of gold to the BSP
C. Both A and B
D. None of the above
 THANK YOU
FOR LISTENING!!

GOD BLESS!