GLIMPSE OF A CPA'S MIND

 BIR clarifies VAT payment of non-resident digital service providers... The Bureau of Internal Revenue (BIR) has put forth clarifications to address certain issues regarding the imposition of the value-added tax (VAT) on digital services. Among others, the agency says all non-resident digital service providers (NRDSPs) are required to register on or before June 1 regardless of the type of transaction. Revenue Memorandum Circular (RMC) No. 47-2025 expounds on the provisions of Revenue Regulations (RR) No. 3-2025 , which prescribes the policies and guidelines for the implementation of the VAT on digital services.  RMC 47-2025 provides clarifications and further information on the provisions of the RR related to registration, reportorial requirements  and payment/remittance, specific tax treatments, and invoicing requirements and input taxes. A non-resident digital service provider refers to an entity with no physical presence in the Philippines that supplies digital servic...

  Deferring the Implementation of RR No. 9-2021  The Secretary of Finance has issued RR No. 15-2021 deferring the implementation of RR No. 9-2021 dated 9 June 2021 imposing value-added tax (VAT) on certain transactions that were previously considered VAT zero-rated. The same is deferred until the issuance of amendatory revenue regulations. In view of the continuing COVID 19-pandemic and its impact to the export industry, the implementation of RR No. 09-2021 is deferred until issuance of amendatory revenue regulation. RR No. 09-2021 imposed 12% VAT on transactions which used to be zero-rated under Section 106 (A) (2) (a) (3), (4), and (5) and Section 108 (B) (1) and (5) of the Tax Code, as amended. The following transactions will revert to VAT zero-rating: Sale of goods or properties: The sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking ...

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...