Value Added Tax

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Transcript of Value Added Tax

VALUE-ADDED TAX

VALUE-ADDED TAX

DescriptionWho are Required To File VAT ReturnsMonthly VAT DeclarationsQuarterly VAT ReturnsTax RatesRelated Revenue IssuancesCodal ReferenceFrequently Asked Questions- General VAT Queries- RELIEF Related Queries- RELIEF Technical Queries- VAT on Professionals- VAT on Doctors- VAT on Lawyers- VAT on Insurance Agents- Other Professional Practitioners

DESCRIPTIONValue-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale of goods and services and on the imports of goods into the Philippines. It is an indirect tax, which can be passed on to the buyer.top of the page

WHO ARE REQUIRED TO FILE VAT RETURNSEvery person or entity who in the course of his trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Five Hundred Fifty Thousand Pesos (P 550,000.00) for any twelve month period

A person required to register as VAT taxpayer but failed to register

A person who imports goods

Professional practitionersProfessional Practitioners (PPs) are formerly classified as non-VAT taxpayers and were exempt from the Value-Added Tax and Percentage taxes under Section 109 of the National Internal Revenue Code (hereinafter referred to as the Code), until December 31, 2002. Prior to this date, they were subject only to Income Tax under Section 24 of the Code.Effective January 1, 2003, however, by virtue of Republic Act Nos. 7716 and 9010, which were implemented by Revenue Regulation Nos. 1-2003 and 3-2003, services of PPs are also subject to either VAT (if gross professional fees exceed P 550,000.00 for a 12-month period) or 3% Percentage Tax (if gross professional fees totals P 550,000 and below for a 12-month period), depending on their gross professional fee for a twelve (12) - month period."Professional Practitioners" include the following: Certified Public Accountants Lawyers Doctors Insurance Agents (Life & Non-life) Other Professional Practitioners required to pass the government examination Others

top of the pageMonthly VAT DeclarationsTax FormBIR Form 2550 M - Monthly VAT Declarations

Documentary Requirements1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable

2. Duly approved Tax Debit Memo, if applicable

3. Duly approved Tax Compliance Certificate, if applicable

4. Previously filed return and proof of payment, for amended returnProcedures1. Fill-up BIR Form 2550 M in triplicate copies.

2. If there is payment: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.

3. If there is no payment: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representativeDeadlineManual FilingNot later than the 20th day following the end of each monthFiling Through eFPSGroup A - within twenty five (25) days following the end of the monthGroup B - within twenty four (24) days following the end of the monthGroup C - within twenty three (23) days following the end of the monthGroup D - within twenty two (22) days following the end of the monthGroup D - within twenty one (21) days following the end of the month

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Quarterly VAT ReturnsTax FormBIR Form 2550 Q - Quarterly VAT ReturnsDocumentary Requirements1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable

2. Duly approved Tax Debit Memo, if applicable

3. Duly approved Tax Compliance Certificate, if applicable

4. Previously filed return and proof of payment, for amended return

5. Summary List of Sales (if quarterly total Sales/Receipts (net of VAT) exceeds P 2,500,000) with the following information:a) BIR-registered name of the buyer who is engaged in business/exercise of profession;b) Taxpayer Identification Number (TIN) of the buyer (Only for sales that are subject to VAT);c) Exempt Sales;d) Zero-rates Sales;e) Sales subject to VAT (exclusive of VAT); and f) Output Tax (VAT on Sales)

6. Summary List of Purchases (if quarterly total purchases (net of VAT) exceeds P 1,000,000) with the following information:a) BIR-registered name of the seller/supplier/service-provider;b) Address of seller/supplier/service-provider;c) Taxpayer Identification Number (TIN) of seller/supplier/service-providerd) Exempt purchases;e) Zero-rated purchases;f) Purchases subject to VAT (exclusive of VAT) - on services;g) Purchases subject to VAT (exclusive of VAT) - on capital goods; h) Purchases subject to VAT (exclusive of VAT) - on goods other than capital goods i) Creditable Input Taxj) Non-creditable Input TaxNOTE: Creditable input taxes and non-creditable input taxes are to be computed not on a per supplier basis but on a per month basis.7. The Quarterly Summary List of Importation with the following information:a) Import Entry Declaration;b) Assessment/Release Date;c) Date of Importation;d) Name of the Seller;e) Country of Origin;f) Dutiable Value;g) All Charges Before Release from Customs Custody;h) Landed Cost:i) Exemptj) Taxable (Subject to VAT)k) VAT paid;l) Official Receipt (OR) Number of the Official Receipt evidencing payment of tax; andm) Date of VAT paymentProcedures1. Fill-up BIR Form 2550 Q in triplicate copies.

2. If there is payment: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 Q with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.

3. If there is no payment: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.

NOTE:1. For taxpayers with branches, only one consolidated return shall be filed for the principal place of business or head office and all the branches.

2. The Quarterly List of Sales and Purchases shall be submitted in magnetic form using 3.5-inch floppy diskette following the format provided under Section 4.110-4 (Subsection G) of RR 8-2002.

DeadlineWithin twenty five (25) days following the close of taxable quarter of the taxpayer (both for manual filing and filing through eFPS)

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Tax Rates For output tax (0% or 10%) For input tax1. 0% or 10%

2. Transitional input tax rates (8% or 10%)

3. Presumptive input tax rate (1-1/2%) and

4. Creditable VAT withheld by the Government and the licensee or lessee (3%, 6%, 8.5% and 10%)top of the page

RELATED REVENUE ISSUANCES RR No. 5-87-Regulations implementing the provisions of Title IV of the Tax Code imposing VAT on importation of goods and sales and services

RR No. 3-89 - Regulations governing the imposition of 10% VAT on deposits for returnable containers

RR No. 5-93 - Implementing guidelines requiring the monthly payment of VAT and amending thereby Section 110 of the Tax Code

RR No. 7-95 - Consolidated Value-Added Tax Regulations

RR No. 5-96 - Amendment to Sections 245 of the Tax Code in relation to Revenue Regulations No. 7716 - Export Services and Importation of Meat to WTO Member VAT exempt.

RR No. 6-97 - Implementing Republic Act. No. 2241 An Act Amending Republic Act no. 7716, otherwise known as the Expanded Value-Added Tax Law, and other pertinent provisions of the National Internal Revenue Code, as amended and further amending Revenue Regulations No. 7-95, as amended otherwise known as the Consolidated Value-Added Tax Regulations

RR No. 13-97 - Amending further Revenue Regulations No. 7-95 as last amended by Revenue Regulations No. 6-97

RR No. 7-99 - Amends further Revenue Regulations No. 7-95 relative to the submission of the Summary Lists of Sales and Purchases in magnetic form

RR No. 8-99 - Provides penalties for violation of the requirement that output tax on sale of goods and services should not be separately indicated in the sales invoice or official receipt

RR No. 18-99 - Prescribes the regulations relative to the imposition of VAT on services of banks, non-bank financial intermediaries and finance companies beginning January 1, 2000

RR No. 19-99 - Prescribes the regulations relative to the imposition of VAT beginning January 1, 2000 on the sale of services by persons engaged in the practice of profession or calling and professional services rendered by general professional partnerships; services rendered by actors, actresses, talents, singers,