INPUT VAT CREDITS, REFUNDS AND MIXED zero rated shall be written or

BUSINESS TRANSACTIONS invoice receipt

o Sales invoice goods properties or
TRANSITIONAL VAT INPUT service some of which VAT zero
 Any person who becomes liable to VAT or rated or VAT zero rated or VAT
who elects to be a VAT registered shall be exempt, the invoice or receipt
allowed. shall clearly indicate the
 Beginning inventory of goods, materials and breakdown of the total amount
supplies an input tax equivalent to 2% of  the date of transaction, quantity unit
the value of such inventory or the actual cost and description pf the goods or
VAT paid on such goods, materials and properties or nature of service
supplies  1000 or more where the sale or transfer
is made to a VAT registered person, the
PRESUMPTIVE VAT INPUT name, business style
Any person or firm engaged in the processing of POWER OF COMMISIONER TO SUSPEND
sardines, mackerel and milk, and in BUSINESS
manufacturing refined sugar and cooking oil
and packed noodle based instant meals shall be Closure of business establishment
allowed a presumptive input tax equivalent 4% The BIR commissioner or his duly
WITHHOLDING OF VAT authorized representative may order the
suspension of the business operations and
Government or any of its political subdivisions temporarily close the business
instrumentalities or agencies including establishment of any person for a period of
government owned or controlled corporations not less than 5 days for any of the following
(GOCCS)
A. Failure to register with the appropriate
Deduct and withhold a final VAT at the rate 5% RDO
of the gross payment thereof B. Failure to issue receipts or invoices
INVOICING REQUIREMENTS C. Failure to file a VAT return or invoices
D. Understatement of taxable sales or
 All VAT registered persons who sell, receipts by 30% or more of his correct
barter or exchange goods properties or taxable sales or receipts for the taxable
services shall issue a VAT invoice or quarter
receipt
 Statement that the seller is a VAT Mixed business transaction and allocation
registered person, followed by this (TIN) of input tax
 Total amount which the purchaser pays  Allocation of input VAT when an
or obligated to pay to the seller such amount of input could not be traced
amount includes VAT directly to a particular sale
o The amount of the tax shall be  Regular 12% vat
shown separate item in the  Zero rated VAT
invoice or receipt  VAT exempt
o If the sale is exempt from VAT or  Taxpayer is engaged in VAT taxable,
zero rated the term exempt or zero-rated and VAT exempt of sales
of goods or services
OTHER PERCENTAGE TAXES Amount paid for messages transmitted by any embassy
and consular offices of a foreign government
These are general consumption taxes imposed to NON-
VAT registered business. INTERNTIONAL ORGANIZATIONS

YES Amount paid for messages transmitted by a public

international organization or any of its agencies based
Gross receipts or sales subject to 12% output VAT and a in the Philippines enjoying privileges, exemptions and
benefits of input VAT on purchases immunities w/c the government of the Philippine
granted
Gross receipts or sales subject to 12% output VAT but
no benefit of input VAT NEWS SERVICES
NO Amount paid for messages for any news paper, press
association, radio or television news, broadcasting
Does the annual gross receipts or sales exceed
agency or newspaper
1,919,500?
AMUSEMENT
Gross receipts or sales subject to 3% percentage tax no
input tax allowed Amusement Activities Opt
BUSIBNESS SUBJECT TO OUTPUT TAX Jai-alai and race tracts 30%
 life insurance companies Cabarets, night or day clubs 18%
 overseas dispatch or message from the
Philippines Cockpits 18%
 amusement places Professional basketball games 15%
 franchise
 bank and non bank financial Boxing exhibitions 10%
 non-vat business with annual sales of 1,919,500 BOXING EXEMPTIONS
and below
 domestic carriers and keepers of One of the contenders for the world or oriental
 sales of shares of stock in local stock exchange3 championship is citizen of phil.

LIFE INSURANCE The promoter of the said boxing exhibitions is a Filipino

citizen . if the promoter is a corporation or association,
1. The life insurance premium is refunded within 6 at least 60% of its capital is owned by a filipino citizen
months
2. Premiums collected outside the Philippine from HORSE RACING WINNINGS
nonresident persons 10% winnings or dividends derived from horse races on
OVERSEAS DISPATCH OR MESSAGE FROM THE the actual amount paid
PHILIPPINES 4% winning from double, forcastiquinella and trifects
SUBJECT TO 10%TAX bets.

By telephone, telegraph, telewritter, exchange, and FRANCISES

other communication equipment services Gas & water franchises
Government A percentage tax of 2% on gross receipts derived from
Amount paid for messages transmitted by the the business covered by the law granting franchise on
government of the phil. Or any of its political gas and water utilities
subdivisions pr instrumentalities RADIO & OR TELEVISION BRODCASTING COMPANIES
Diplomatic Services
Subject to 3% tax if gross receipts do not exceed The maturity period shall be reckoned to the end as of
P10,000,000.00 the date of pre-termination for purposes of classifying
the transaction and applying the correct rate of
 May opt to register as VAT taxpayer
 Registration is irrevocable NON VAT BUSINESS

Gross receipts exceed the threshold A non-VAT business with annual gross sales or gross
receipts of P1,919,500 and below is subject to 3% OPT
 RTBC’S are mandated to register as VAT on its transactions
taxpayer w/in 30 days from the end of the
taxable year Sales to government by NON_VAT Business

OTHER FRANCHISE Withholding percentage Tax of 3%

Subject to 12% value added tax  Seller is non-vat

BANK AND NON BANK FINANCIAL INSTITUTION Creditable withholding income taxes (CWIT) of

Gross Receipts on bank and quasi banks  1% on purposes of goods

 2% on purposes of services
Interest, commissions and discounts from lending
activities as well as income from financial leasing, on the DOMESTIC CARRIERS AND KEEPERS OF GARAGES
basis of remaining maturities of instruments from which
 Cars for rent or hire driven by the lesse
such receipts are
 Transportation contractors persons who
Maturity of 5years or less 5% transport passengers for hire
 Domestic carriers by land for the transport of
More than 5years 1%
passengers
On dividends and equity shares in the net income of o Except owners of bancas and owner of
subsidiaries 0% animal-drawn two wheeled vehicle
 Keepers of garages
On royalties, rentals of real or personal property, profit
from exchange and all other items as gross income INTERNATIONAL AIR SHIPPING CARRIERS
under section 32 of the code 7%
International carriers of foreign registry
On net trading gains within the taxable year on a foreign
Subject to a tax of 3% of their quarterly gross
currency, debt securities, derivatives and other similar
receipts
financial instruments 7%
Subject to VAT on their domestic transport of both
Gross receipts on other non banks
passengers and cargo
Interest, commissions, and discounts from lending act.
Zero rated on their transport of passengers and
As well as income from financial leasing, on the basis of
cargo from the Philippines port to a foreign port
remaining maturities on instruments from which such
receipts are derived SALES OF SHARES STOCK
Maturity 5 years or led 5% IPO
More than 5 years 1% Percent of IPO to outstanding shares tax rate
From interest, commissions, discount and all other Up to 25% 4%
items treated as income under the code 5%
Over 25% but not over 33.3/3% 2%
PRE-TERMINATION
Over 33.3/3% 1%
TAX BASE

Higher between the gross selling price or gross value in

money of the shares of stock sold, bartered or exchange

SALE THROUGH LOCAL STOCK EXCHANGE

Subject to an percentage tax of ½ of 1% of the GSP or

gross value in money

REMINDER:

In general, every person subject to the percentage tax

shall file a quarterly return of the amount of his gross
receipts, sales, or earning and pay the tax due thereon
w/in 25 days after the end of each taxable quarter