VALUE-ADDED TAXES

The following are rules on Value-added Taxation in the Philippines

Description

Value-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale, barter, exchange or lease of goods or properties and services in the Philippines and on importation of goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.

Who Are Required To File VAT Returns

• Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Five Hundred Thousand Pesos (P1,500,000.00). 
• A person required to register as VAT taxpayer but failed to register 
• Any person, whether or not made in the course of his trade or business, who imports goods

Monthly VAT Declarations

Tax Form - BIR Form 2550 M - Monthly Value-Added Tax Declaration (February 2007 ENCS)

Documentary Requirements
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No. 2307), if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax At Source (SAWT), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Authorization letter, if return is filed by authorized representative.

Procedures

1. Fill-up BIR Form No. 2550 M in triplicate copies (two copies for the BIR and one copy for the taxpayer)
2. If there is payment:

• File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business establishment) is registered or required to be registered.
• The taxpayer must accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and payment of the tax.
• In places where there are no duly accredited agent banks, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue Collection Officer (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
1. If manual Filing - Not later than the 20th day following the end of each month
2. If through Electronic Filing and Payment System (eFPS): - Filing should be done per Business Industry


                    Group A                                                  Period for filing Monthly VAT Declarations 

• Insurance and Pension Funding                                                25 days following the end of the month 
• Activities Auxiliary to Financial Intermediation 
• Construction 
• Water Transport 
• Hotels and Restaurants 
• Land Transport 

                   Group B                                                  Period for filing Monthly VAT Declarations 

• Manufacture and Repair of Furniture                                      24 days following the end of the month 
• Manufacture of Basic Metals 
• Manufacture of Chemicals and Chemical Products 
• Manufacture of Coke, Refined Petroleum & Fuel Products 
• Manufacture of Electrical Machinery & Apparatus N.E.C. 
• Manufacture of Fabricated Metal Products 
• Manufacture of Food, Products & Beverages 
• Manufacture of Machinery & Equipment NEC 
• Manufacture of Medical, Precision, Optical Instruments 
• Manufacture of Motor Vehicles, Trailer & Semi-Trailers 
• Manufacture of Office, Accounting & Computing Machinery 
• Manufacture of Other Non-Metallic Mineral Products 
• Manufacture of Other Transport Equipment 
• Manufacture of Other Wearing Apparel 
• Manufacture of Paper and Paper Products 
• Manufacture of Radio, TV & Communication Equipment/ Apparatus 
• Manufacture of Rubber & Plastic Products 
• Manufacture of Textiles 
• Manufacture of Tobacco Products 
• Manufacture of Wood & Wood Products 
• Manufacturing N.E.C. 
• Metallic Ore Mining 
• Non-Metallic Mining & Quarrying 

                  Group C                                                  Period for filing Monthly VAT Declarations 

• Retail Sale                                                                           23 days following the end of the month
• Wholesale Trade and Commission Trade 
• Sale, Maintenance, Repair of Motor Vehicle, Sale of Automotive Fuel 
• Collection, Purification and Distribution of Water 
• Computer and Related Activities 
• Real Estate Activities 

                  Group D                                                  Period for filing Monthly VAT Declarations 

• Air Transport                                                                    22 days following the end of the month 
• Electricity, Gas, Steam & Hot Water Supply 
• Postal & Telecommunications 
• Publishing, Printing & Reproduction of Recorded Media 
• Recreational, Cultural & Sporting Activities 
• Recycling 
• Renting of Goods & Equipment 
• Supporting & Auxiliary Transport Services 

                   Group E

• Activities of Membership Organizations, Inc.              21 days following the end of the month
• Health and Social Work
• Public Admin & Defense Compulsory Social Security
• Research and Development
• Agricultural, Hunting, and Forestry
• Farming of Animals
• Fishing
• Other Service Activities
• Miscellaneous Business Activities
• Unclassified
• Quarterly Value-Added Tax Return

Tax Form - BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)


Attachments to the Return
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax At Source (SAWT), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Previously filed return and proof of payment, for amended return
6. Authorization letter, if return is filed by authorized representative

Procedures

1. Fill-up BIR Form 2550 Q in triplicate copies (two copies for the BIR and one copy for the taxpayer)

2. If there is payment:

· File the Quarterly VAT Return, together with the required attachments, and pay the VAT due thereon with any AAB under the jurisdiction of the RDO/LTDO where the taxpayer (head office of the business establishment) is registered or required to be registered.

The taxpayer must accomplish and submit BIR- prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate that return as proof of filing the return and payment of the tax.

· In places where there are no duly accredited agent banks, file the Quarterly VAT Return, together with the required attachments and pay the VAT due with the Revenue Collection Officer (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 Quarterly VAT Return, 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.

Reminders:
1. Only one consolidated Monthly VAT Declaration/Quarterly VAT Return shall be filed covering the results of operation of the head office as well as the branches for all lines of business subject to VAT.
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 4.114-3(g) of RR No. 16-2005.
3. The Quarterly List of Sales and Purchases shall be submitted through electronic filing facility for taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and those enrolled under the eFPS.

Deadline: Within twenty five (25) days following the close of taxable quarter.

Tax Rates
· On sale of goods and properties - twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged

· On sale of services and use or lease of properties - twelve percent (12%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties

· On importation of goods - twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such as tax to be paid by the importer prior to the release of such goods from customs custody; provided, that where the customs duties are determined on the basis of quantity or volume of the goods, the VAT shall be based on the landed cost plus excise taxes, if any.

· On export sales and other zero-rated sales - 0%

See also: PEZA rules on Value-Added Taxes

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