Input VAT

Input VAT not directly Total Input

Output Creditable Net VAT Unrecoverable
Directly attributable Input VAT for
VAT Input VAT Payable Input VAT
attributable to any VAT refund
activity
Sale subject to 12% VAT 120,000.00 50,000.00 50,000.00 100,000.00 100,000.00 20,000.00 - -

Sale subject to 0% VAT - 30,000.00 50,000.00 80,000.00 80,000.00 - 80,000.00 -

Sale of exempt goods - 20,000.00 50,000.00 70,000.00 - - - 70,000.00 3

Sale to gov't (subject to

5% Final Withholding 120,000.00 40,000.00 50,000.00 90,000.00 70,000.00 1 50,000.00 2 - 20,000.00 3
VAT)

1
Standard Input VAT of 7% on sales to Government
2
Final Withholding VAT of 5% (Final VAT due)
3
to be recognized as cost or expense

Note: Government agencies, before making payment on account of each purchase, shall deduct final withholding VAT of 5% of the gross payment (Government
Money Payments- GMP).
5% final withholding VAT shall represent the net VAT Payable of the Seller.
The remaining 7% effectively accounts for the standard input VAT.
Actual Input VAT > Standard Input VAT (7%) = Unrecoverable Input VAT (which may be recognized as cost or expense)
Actual Input VAT < Standard Input VAT (7%) = difference must be closed to expense or cost
12% final withholding VAT applies to transactions involving lease or use of property rights owned by non-residents and other services
rendered in the Philippines by non-residents.

LDM NOTES October 2016 CPA Board