Philippines
Feb 16, 2011 by Victorino Abrugar at Law & Government, Taxation
How to compute Value Added Tax (VAT) payable in the Philippines? Any person or entity who is
engaged in trade, business or in the practice of profession may be liable to business taxes.
Business taxes can be either a Percentage tax or a Value Added Tax. Furthermore, a taxpayer can
be a VAT registered or a Non-VAT registered taxpayer. In this article, we will tackle how to
compute VAT Payable and file the monthly and quarterly VAT returns.
Output tax means the VAT due on the sale, lease or exchange of taxable goods or properties or
services by any person registered or required to register under Section 236 of the Tax Code.
Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local
purchase of goods, properties or services, including lease or use of property in the course of his
trade or business. It shall also include the transitional input tax determined in accordance with
Section 111 of the Tax Code, presumptive input tax and deferred input tax from previous period.
Total Vatable Purchases are your total purchases from VAT registered suppliers. This should be
supported with VAT receipts.
Note:
VAT exempt sales, zero rated sales, purchases not qualified for input tax, and other input taxes (if
any) should also be shown in the VAT returns. See BIR Forms.
(RCO) or duly authorized Treasurer of the Municipality where such taxpayer (head office of the
business establishment) is registered or required to be registered.
The RCO or duly authorized Municipal/City Treasurer shall issue a Revenue Official Receipt
upon payment of the tax.
3. If there is no payment:
File the Monthly VAT Declaration, together with the required attachments with the
RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent or duly authorized
Municipal/ City Treasurer of Municipality/City where the taxpayer (head office of the business
establishment) is registered or required to be registered.
Deadline
Monthly VAT returns BIR Form 2550M:
Not later than the 20th day following the end of each month (manual filing)
Quarterly VAT returns BIR Form 2550Q:
Within twenty five (25) days following the close of taxable quarter (manual filing)
For EFPS filing, please visit the BIR website for detailed and updated dates of deadlines.
Reference:
BIR Tax information on Value Added Tax
Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
Disclaimer: New and subsequent BIR rulings, issuances and or laws may render the whole or
part of the article obsolete or inaccurate. For more information, please inquire or consult with
the BIR.