CHAPTER I - IMPOSITION OF TAX SEC. 105. Persons Liable.

- Any person who, in the course of trade or business, sells barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the valueadded tax (VAT) imposed in ections !"# to !"$ of this %ode& The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services& This rule shall li'ewise apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of (epublic Act )o& **!#& The phrase 'in the course of trade or business' means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a nonstoc', nonprofit private organi+ation (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or government entity& The rule of regularity, to the contrary notwithstanding, services as defined in this %ode rendered in the ,hilippines by nonresident foreign persons shall be considered as being course of trade or business&

SEC. 106. Value-Added Ta

on Sale of !oods or Pro"erties. -

#A$ %ate and &ase of Ta . - There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, value-added tax e-uivalent to ten percent (!".) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor& (!) The term /'oods/ or /properties/ shall mean all tangible and intangible objects which are capable of pecuniary estimation and shall include0 (a) (eal properties held primarily for sale to customers or held for lease in the ordinary course of trade or business1

(b) The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademar', trade brand or other li'e property or right1 (c) The right or the privilege to use in the ,hilippines of any industrial, commercial or scientific e-uipment1 (d) The right or the privilege to use motion picture films, tapes and discs1 and (e) (adio, television, satellite transmission and cable television time& The term ''ross sellin' "rice' means the total amount of money or its e-uivalent which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter or exchange of the goods or properties, excluding the value-added tax& The excise tax, if any, on such goods or properties shall form part of the gross selling price& (2) The following sales by VAT-registered persons shall be subject to +ero percent (".) rate0 (a) E "ort Sales. - The term /export sales/ means0 (!) The sale and actual shipment of goods from the ,hilippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its e-uivalent in goods or services, and accounted for in accordance with the rules and regulations of the 3ang'o entral ng ,ilipinas (3 ,)1 (2) ale of raw materials or pac'aging materials to a nonresident buyer for delivery to a resident local exportoriented enterprise to be used in manufacturing, processing, pac'ing or repac'ing in the ,hilippines of the said buyer/s goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the 3ang'o entral ng ,ilipinas (3 ,)1 (4) ale of raw materials or pac'aging materials to export-oriented enterprise whose export sales exceed seventy percent (*".) of total annual production1

(5) and

ale of gold to the 3ang'o

entral ng ,ilipinas (3 ,)1

(6) Those considered export sales under 7xecutive 8rder )8& 22#, otherwise 'nown as the 8mnibus 9nvestment %ode of !:$*, and other special laws& (b) (orei'n Currenc) *eno+inated Sale& - The phrase /foreign currency denominated sale/ means sale to a nonresident of goods, except those mentioned in ections !5: and !6", assembled or manufactured in the ,hilippines for delivery to a resident in the ,hilippines, paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the 3ang'o entral ng ,ilipinas (3 ,)& (c) ales to persons or entities whose exemption under special laws or international agreements to which the ,hilippines is a signatory effectively subjects such sales to +ero rate& #&$ Transactions *ee+ed Sale& - The following transactions shall be deemed sale0 (!) 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 business1 (2) ;istribution or transfer to0 (a) hareholders or investors as share in the profits of the VATregistered persons1 or (b) %reditors in payment of debt1 (4) %onsignment of goods if actual sale is not made within sixty (#") days following the date such goods were consigned1 and (5) (etirement from or cessation of business, with respect to inventories of taxable goods existing as of such retirement or cessation&

#C$ Chan'es in or Cessation of Status of a VAT-re'istered Person & The tax imposed in ubsection (A) of this ection shall also apply to goods disposed of or existing as of a certain date if under circumstances to be prescribed in rules and regulations to be promulgated by the ecretary of <inance, upon recommendation of the %ommissioner, the status of a person as a VAT-registered person changes or is terminated& #*$ *eter+ination of the Ta . (!) The tax shall be computed by multiplying the total amount indicated in the invoice by one-eleventh (!=!!)& (2) ales (eturns, Allowances and ales ;iscounts& - The value of goods or properties sold and subse-uently returned or for which allowances were granted by a VAT-registered person may be deducted from the gross sales or receipts for the -uarter in which a refund is made or a credit memorandum or refund is issued& ales discount granted and indicated in the invoice at the time of sale and the grant of which does not depend upon the happening of a future event may be excluded from the gross sales within the same -uarter it was given& (4) Authorit) of the Co++issioner to *eter+ine the A""ro"riate Ta &ase& - The %ommissioner shall, by rules and regulations prescribed by the ecretary of <inance, determine the appropriate tax base in cases where a transaction is deemed a sale, barter or exchange of goods or properties under ubsection (3) hereof, or where the gross selling price is unreasonably lower than the actual mar'et value& SEC. 10,. Value-Added Ta on -+"ortation of !oods. -

#A$ -n !eneral. - There shall be levied, assessed and collected on every importation of goods a value-added tax e-uivalent to ten percent (!".) based on the total value used by the 3ureau of %ustoms in determining tariff and customs duties plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody0 ,rovided, That where the customs duties are determined on the basis of the -uantity or volume of the goods, the valueadded tax shall be based on the landed cost plus excise taxes, 9f any& #&$ Transfer of !oods b) Ta -e e+"t Persons. - 9n the case of tax-free importation of goods into the ,hilippines by persons, entities or agencies

exempt from tax where such goods are subse-uently sold, transferred or exchanged in the ,hilippines to non-exempt persons or entities, the purchasers, transferees or recipients shall be considered the importers thereof, who shall be liable for any internal revenue tax on such importation& The tax due on such importation shall constitute a lien on the goods superior to all charges or liens on the goods, irrespective of the possessor thereof& SEC. 10.. Value-added Ta Pro"erties. on Sale of Ser/ices and 0se or Lease of

#A$ %ate and &ase of Ta . - There shall be levied, assessed and collected, a value-added tax e-uivalent to ten percent (!".) of gross receipts derived from the sale or exchange of services, including the use or lease of properties& The phrase /sale or exchange of services/ means the performance of all 'inds or services in the ,hilippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors1 stoc', real estate, commercial, customs and immigration bro'ers1 lessors of property, whether personal or real1 warehousing services1 lessors or distributors of cinematographic films1 persons engaged in milling processing, manufacturing or repac'ing goods for others1 proprietors, operators or 'eepers of hotels, motels, resthouses, pension houses, inns, resorts1 proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers1 dealers in securities1 lending investors1 transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire another domestic common carriers by land, air and water relative to their transport of goods or cargoes1 services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under ection !!: of this %ode1 services of ban's, non-ban' financial intermediaries and finance companies1 and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies1 and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties& The phrase /sale or exchange of services/ shall li'ewise include0 (!) The lease or the use of or the right or privilege to use any copyright, patent, design or model, plan secret formula or process, goodwill, trademar', trade brand or other li'e property or right1 (2) The lease of the use of, or the right to use of any industrial, commercial or scientific e-uipment1

(4) The supply of scientific, technical, industrial or commercial 'nowledge or information1 (5) The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right as is mentioned in subparagraph (2) or any such 'nowledge or information as is mentioned in subparagraph (4)1 (6) The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any brand, machinery or other apparatus purchased from such nonresident person& (#) The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial underta'ing, venture, project or scheme1 (*) The lease of motion picture films, films, tapes and discs1 and ($) The lease or the use of or the right to use radio, television, satellite transmission and cable television time& >ease of properties shall be subject to the tax herein imposed irrespective of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the ,hilippines& The term /gross receipts/ means the total amount of money or its e-uivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits and advanced payments actually or constructively received during the taxable -uarter for the services performed or to be performed for another person, excluding valueadded tax& #&$ Transactions Sub1ect to 2ero Percent #03$ %ate - The following services performed in the ,hilippines by VAT- registered persons shall be subject to +ero percent (".) rate& (!) ,rocessing, manufacturing or repac'ing goods for other persons doing business outside the ,hilippines which goods are subse-uently exported, where the services are paid for in acceptable foreign

currency and accounted for in accordance with the rules and regulations of the 3ang'o entral ng ,ilipinas (3 ,)1 (2) ervices other than those mentioned in the preceding paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the 3ang'o entral ng ,ilipinas (3 ,)1 (4) ervices rendered to persons or entities whose exemption under special laws or international agreements to which the ,hilippines is a signatory effectively subjects the supply of such services to +ero percent (".) rate1 (5) ervices rendered to vessels engaged exclusively in international shipping1 and (6) ervices performed by subcontractors and=or contractors in processing, converting, of manufacturing goods for an enterprise whose export sales exceed seventy percent (*".) of total annual production& #C$ *eter+ination of the Ta & - The tax shall be computed by multiplying the total amount indicated in the official receipt by one-eleventh (!=!!)& SEC. 104. E e+"t Transactions. - The following shall be exempt from the value-added tax0 (a) ale of nonfood agricultural products1 marine and forest products in their original state by the primary producer or the owner of the land where the same are produced1 (b) ale of cotton seeds in their original state1 and copra1

(c) ale or importation of agricultural and marine food products in their original state, livestoc' and poultry of or 'ing generally used as, or yielding or producing foods for human consumption1 and breeding stoc' and genetic materials therefor& ,roducts classified under this paragraph and paragraph (a) shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the mar'et, such as free+ing, drying, salting, broiling, roasting, smo'ing or stripping&

,olished and=or hus'ed rice, corn grits, raw cane sugar and molasses, and ordinary salt shall be considered in their original state1 (d) ale or importation of fertili+ers1 seeds, seedlings and fingerlings1 fish, prawn, livestoc' and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting coc's, a-uarium fish, +oo animals and other animals generally considered as pets)1 (e) ale or importation of coal and natural gas, in whatever form or state, and petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to excise tax imposed under Title V91 (f) ale or importation of raw materials to be used by the buyer or importer himself in the manufacture of petroleum products subject to excise tax, except lubricating oil, processed gas, grease, wax and petrolatum1 (g) 9mportation of passenger and=or cargo vessels of more than five thousand tons (6,""") whether coastwise or ocean-going, including engine and spare parts of said vessel to be used by the importer himself as operator thereof1 (h) 9mportation of personal and household effects belonging to the residents of the ,hilippines returning from abroad and nonresident citi+ens coming to resettle in the ,hilippines0 ,rovided, That such goods are exempt from customs duties under the Tariff and %ustoms %ode of the ,hilippines1 (i) 9mportation of professional instruments and implements, wearing apparel, domestic animals, and personal household effects (except any vehicle, vessel, aircraft, machinery other goods for use in the manufacture and merchandise of any 'ind in commercial -uantity) belonging to persons coming to settle in the ,hilippines, for their own use and not for sale, barter or exchange, accompanying such persons, or arriving within ninety (:") days before or after their arrival, upon the production of evidence satisfactory to the %ommissioner, that such persons are actually coming to settle in the ,hilippines and that the change of residence is bona fide1 (j) ervices subject to percentage tax under Title V1

(') ervices by agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into raw sugar1 (l) ?edical, dental, hospital and veterinary services subject to the provisions of ection !* of (epublic Act )o& **!#, as amended0 (m) 7ducational services rendered by private educational institutions, duly accredited by the ;epartment of 7ducation, %ulture and ports (;7% ) and the %ommission on @igher 7ducation (%@7;), and those rendered by government educational institutions1 (n) ale by the artist himself of his wor's of art, literary wor's, musical compositions and similar creations, or his services performed for the production of such wor's1 (o) ervices rendered by individuals pursuant to an employeremployee relationship1 (p) ervices rendered by regional or area head-uarters established in the ,hilippines by multinational corporations which act as supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-,acific (egion and do not earn or derive income from the ,hilippines1 (-) Transactions which are exempt under international agreements to which the ,hilippines is a signatory or under special laws, except those under ,residential ;ecree )os& ##, 62: and !6:"1 (r) ales by agricultural cooperatives duly registered with the %ooperative ;evelopment Authority to their members as well as sale of their produce, whether in its original state or processed form, to non-members1 their importation of direct farm inputs, machineries and e-uipment, including spare parts thereof, to be used directly and exclusively in the production and=or processing of their produce1 (s) ales by electric cooperatives duly registered with the %ooperative ;evelopment authority or )ational 7lectrification Administration, relative to the generation and distribution of electricity as well as their importation of machineries and e-uipment, including spare parts, which shall be directly used in the generation and distribution of electricity1

(t) Aross receipts from lending activities by credit or multi-purpose cooperatives duly registered with the %ooperative ;evelopment Authority whose lending operation is limited to their members1 (u) ales by non-agricultural, non- electric and non-credit cooperatives duly registered with the %ooperative ;evelopment Authority0 ,rovided, That the share capital contribution of each member does not exceed <ifteen thousand pesos (,!6,""") and regardless of the aggregate capital and net surplus ratably distributed among the members1 (v) 7xport sales by persons who are not VAT-registered1 (w) ale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business or real property utili+ed for low-cost and sociali+ed housing as defined by (epublic Act )o& *2*:, otherwise 'nown as the Brban ;evelopment and @ousing Act of !::2, and other related laws, house and lot and other residential dwellings valued at 8ne million pesos (,!,""",""") and below0 ,rovided, That not later than Canuary 4!st of the calendar year subse-uent to the effectivity of this Act and each calendar year thereafter, the amount of 8ne million pesos (,!,""",""") shall be adjusted to its present value using the %onsumer ,rice 9ndex, as published by the national tatistics 8ffice () 8)1 (x) >ease of a residential unit with a monthly rental not exceeding 7ight thousand pesos(,$,""")1 ,rovided, That not later than Canuary 4!st of the calendar year subse-uent to the effectivity of (epublic Act )o& $25! and each calendar year thereafter, the amount of 7ight thousand pesos (,$,""") shall be adjusted to its present value using the %onsumer ,rice 9ndex as published by the )ational tatistics 8ffice () ")1 (y) ale, importation, printing or publication of boo's and any newspaper, maga+ine review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements1 and (+) ale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales and=or receipts do not exceed the amount of <ive hundred fifty thousand pesos (,66",""")0 ,rovided, That not later than Canuary 4!st of the calendar year subse-uent to the effectivity of (epublic Act )o& $25! and each calendar year thereafter, the amount

of <ive hundred fifty thousand pesos (66",""") shall be adjusted to its present value using the %onsumer ,rice 9ndex, as published by the )ational tatistics 8ffice () 8)& The foregoing exemptions to the contrary notwithstanding, any person whose sale of goods or properties or services which are otherwise not subject to VAT, but who issues a VAT invoice or receipt therefor shall, in addition to his liability to other applicable percentage tax, if any, be liable to the tax imposed in ection !"# or !"$ without the benefit of input tax credit, and such tax shall also be recogni+ed as input tax credit to the purchaser under ection !!", all of this %ode&

SEC. 110. Ta

Credits. -

A. Creditable -n"ut Ta . (!) Any input tax evidenced by a VAT invoice or official receipt issued in accordance with ection !!4 hereof on the following transactions shall be creditable against the output tax0 (a) ,urchase or importation of goods0 (i) <or sale1 or (ii) <or conversion into or intended to form part of a finished product for sale including pac'aging materials1 or (iii) <or use as supplies in the course of business1 or (iv) <or use as materials supplied in the sale of service1 or (v) <or use in trade or business for which deduction for depreciation or amorti+ation is allowed under this %ode, except automobiles, aircraft and yachts& (b) ,urchase of services on which a value-added tax has been actually paid& (2) The input tax on domestic purchase of goods or properties shall be creditable0 (a) To the purchaser upon consummation of sale and on importation of goods or properties1 and (b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the 3ureau of %ustoms&

@owever, in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee& (4) A VAT-registered person who is also engaged in transactions not subject to the value-added tax shall be allowed tax credit as follows0 (a) Total input tax which can be directly attributed to transactions subject to value-added tax1 and (b) A ratable portion of any input tax which cannot be directly attributed to either activity& The term /input tax/ means the value-added tax due from or paid by a VAT-registered person in the course of his trade or business on importation of goods or local purchase of goods or services, including lease or use of property, from a VAT-registered person& 9t shall also include the transitional input tax determined in accordance with ection !!! of this %ode& The term /output tax/ means the value-added tax due on the sale or lease of taxable goods or properties or services by any person registered or re-uired to register under ection 24# of this %ode& #&$ E cess 5ut"ut or -n"ut Ta . - 9f at the end of any taxable -uarter the output tax exceeds the input tax, the excess shall be paid by the Vatregistered person& 9f the input tax exceeds the output tax, the excess shall be carried over to the succeeding -uarter or -uarters& any input tax attributable to the purchase of capital goods or to +ero-rated sales by a VATregistered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of ection !!2& #C$ *eter+ination of Creditable -n"ut Ta . - The sum of the excess input tax carried over from the preceding month or -uarter and the input tax creditable to a VAT-registered person during the taxable month or -uarter shall be reduced by the amount of claim for refund or tax credit for valueadded tax and other adjustments, such as purchase returns or allowances and input tax attributable to exempt sale& The claim for tax credit referred to in the foregoing paragraph shall include not only those filed with the 3ureau of 9nternal (evenue but also those filed with other government agencies, such as the 3oard of 9nvestments the

3ureau of %ustoms& SEC. 111. Transitional6Presu+"ti/e -n"ut Ta Credits. -

#A$ Transitional -n"ut Ta Credits. - A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory according to rules and regulations prescribed by the ecretary of finance, upon recommendation of the %ommissioner, be allowed input tax on his beginning inventory of goods, materials and supplies e-uivalent for eight percent ($.) of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax& #&$ Presu+"ti/e -n"ut Ta Credits. -

(!) ,ersons or firms engaged in the processing of sardines, mac'erel and mil', and in manufacturing refined sugar and coo'ing oil, shall be allowed a presumptive input tax, creditable against the output tax, e-uivalent to one and one-half percent (! !=2.) of the gross value in money of their purchases of primary agricultural products which are used as inputs to their production& As used in this ubsection, the term /processing/ shall mean pasteuri+ation, canning and activities which through physical or chemical process alter the exterior texture or form or inner substance of a product in such manner as to prepare it for special use to which it could not have been put in its original form or condition& (2) ,ublic wor's contractors shall be allowed a presumptive input tax e-uivalent to one and one-half percent (! !=2.) of the contract price with respect to government contracts only in lieu of actual input taxes therefrom& SEC. 117. %efunds or Ta Credits of -n"ut Ta . -

#A$ 2ero-rated or Effecti/el) 2ero-rated Sales. - any VAT-registered person, whose sales are +ero-rated or effectively +ero-rated may, within two (2) years after the close of the taxable -uarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax0

,rovided, however, That in the case of +ero-rated sales under ection !"#(A)(2)(a)(!), (2) and (3) and ection !"$ (3)(!) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the 3ang'o entral ng ,ilipinas (3 ,)0 ,rovided, further, That where the taxpayer is engaged in +ero-rated or effectively +ero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales& #&$ Ca"ital !oods. - A VAT-registered person may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital goods imported or locally purchased, to the extent that such input taxes have not been applied against output taxes& The application may be made only within two (2) years after the close of the taxable -uarter when the importation or purchase was made& #C$ Cancellation of VAT %e'istration. - A person whose registration has been cancelled due to retirement from or cessation of business, or due to changes in or cessation of status under ection !"#(%) of this %ode may, within two (2) years from the date of cancellation, apply for the issuance of a tax credit certificate for any unused input tax which may be used in payment of his other internal revenue taxes& #*$ Period 8ithin 8hich %efund or Ta Credit of -n"ut Ta es shall be 9ade. - 9n proper cases, the %ommissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (!2") days from the date of submission of compete documents in support of the application filed in accordance with ubsections (A) and (3) hereof& 9n case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the %ommissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (4") days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the %ourt of Tax Appeals&#E$ 9anner of !i/in' %efund. - (efunds shall be made upon warrants drawn by the %ommissioner or by his duly authori+ed representative without the necessity of being countersigned by the %hairman, %ommission on audit, the provisions of the Administrative %ode of !:$* to the contrary notwithstanding0 ,rovided, That refunds under this paragraph shall be subject to post audit by the %ommission on Audit&

CHAPTER II - COMPLIANCE REQUIREMENTS SEC. 11:. -n/oicin' and Accountin' %e;uire+ents for VAT%e'istered Persons. #A$ -n/oicin' %e;uire+ents& - A VAT-registered person shall, for every sale, issue an invoice or receipt& 9n addition to the information re-uired under ection 24*, the following information shall be indicated in the invoice or receipt0 (!) A statement that the seller is a VAT-registered person, followed by his taxpayer/s identification number (T9))1 and (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the valueadded tax& #&$ Accountin' %e;uire+ents& - )otwithstanding the provisions of ection 244, all persons subject to the value-added tax under ections !"# and !"$ shall, in addition to the regular accounting records re-uired, maintain a subsidiary sales journal and subsidiary purchase journal on which the daily sales and purchases are recorded& The subsidiary journals shall contain such information as may be re-uired by the ecretary of <inance&

SEC. 11<. %eturn and Pa)+ent of Value-Added Ta . #A$ -n !eneral. - 7very person liable to pay the value-added tax imposed under this Title shall file a -uarterly return of the amount of his gross sales or receipts within twenty-five (26) days following the close of each taxable -uarter prescribed for each taxpayer0 ,rovided, however, That VATregistered persons shall pay the value-added tax on a monthly basis& Any person, whose registration has been cancelled in accordance with ection 24#, shall file a return and pay the tax due thereon within twentyfive (26) days from the date of cancellation of registration0 ,rovided, That only one consolidated return shall be filed by the taxpayer for his principal place of business or head office and all branches& #&$ =here to (ile the %eturn and Pa) the Ta & - 7xcept as the %ommissioner otherwise permits, the return shall be filed with and the tax paid to an authori+ed agent ban', (evenue %ollection 8fficer or duly

authori+ed city or municipal Treasurer in the ,hilippines located within the revenue district where the taxpayer is registered or re-uired to register& #C$ =ithholdin' of Creditable Value-added Ta . - The Aovernment or any of its political subdivisions, instrumentalities or agencies, including government-owned or -controlled corporations (A8%%s) shall, before ma'ing payment on account of each purchase of goods from sellers and services rendered by contractors which are subject to the value-added tax imposed in ections !"# and !"$ of this %ode, deduct and withhold the value-added tax due at the rate of three percent (4.) of the gross payment for the purchase of goods and six percent (#.) on gross receipts for services rendered by contractors on every sale or installment payment which shall be creditable against the value-added tax liability of the seller or contractor0 ,rovided, however, That in the case of government public wor's contractors, the withholding rate shall be eight and one-half percent ($&6.)0 ,rovided, further, That the payment for lease or use of properties or property rights to nonresident owners shall be subject to ten percent (!".) withholding tax at the time of payment& <or this purpose, the payor or person in control of the payment shall be considered as the withholding agent& The value-added tax withheld under this ection shall be remitted within ten (!") days following the end of the month the withholding was made&

SEC. 115. Po8er of the Co++issioner to Sus"end the &usiness 5"erations of a Ta "a)er. - The %ommissioner or his authori+ed representative is hereby empowered to suspend the business operations and temporarily close the business establishment of any person for any of the following violations0 #a$ -n the case of a VAT-re'istered Person. (!) <ailure to issue receipts or invoices1 (2) <ailure to file a value-added tax return as re-uired under ection !!51 or (4) Bnderstatement of taxable sales or receipts by thirty percent (4".) or more of his correct taxable sales or receipts for the taxable -uarter& #b$ (ailure of an) Person to %e'ister as %e;uired under Section 7:6. -

The temporary closure of the establishment shall be for the duration of not less than five (6) days and shall be lifted only upon compliance with whatever re-uirements prescribed by the %ommissioner in the closure order&