Government, any of its political subdivision, instrumentality, or agencies, including government-owned or controlled corporations (GOCCs) is also subject to value-added taxes in the Philippines, unless otherwise exempted. Sales to Government of goods, properties, or services are subject to 12% value-added tax. However there are special rules that accountants and businessmen must be aware of in dealing with the government sales. (1) Final withholding VAT on sales to government in the Philippines, and; (2) Accounting & filling-out VAT return forms in the Philippines. FINAL WITHHOLDING VAT ON SALES TO GOVERNMENT As a rule, government or any of its political subdivision, instrumentality, or agencies, including GOCCs are mandated to withhold 5% (out of 12% regular VAT) on VATable sales upon payment to to value-added tax sellers of goods or services. Such 5% withholding tax shall represent net VAT payable by the seller to government . This would mean that the seller will not b
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