Vat Requirements PDF

DEPARTMENT OF ACCOUNTANCY HOLY ANGEL UNIVERSITY VAT STILL DUE & MISCELLANEOUS REQUIREMENTS DETERMINATION OF VAT PAYABLE OUTPUT VAT Pxxx,xxx Less: INPUT VAT (xxx,xxx) VAT DUE Pxxx,xxx Less: Tax Credits (xxx,xxx) VAT still due Pxxx,xxx TAX CREDITS/...

DEPARTMENT OF ACCOUNTANCY HOLY ANGEL UNIVERSITY VAT STILL DUE & MISCELLANEOUS REQUIREMENTS DETERMINATION OF VAT PAYABLE OUTPUT VAT Pxxx,xxx Less: INPUT VAT (xxx,xxx) VAT DUE Pxxx,xxx Less: Tax Credits (xxx,xxx) VAT still due Pxxx,xxx TAX CREDITS/ PAYMENTS 1. VAT paid in the previous two months-for quarterly VAT returns 2. VAT paid in return previously filed, in the case of amended return 3. Advanced payments made to the BIR 4. Final withholding VAT on sales to the government 5. Advanced VAT on certain goods  VAT PAYMENTS IN THE MONTHLY RETURNS This tax credit applies to the quarterly VAT return (BIR Form 2550Q). This is not applicable to the monthly VAT return (BIR Form 2550M) FINAL WITHHOLDING VAT The final withholding VAT is the 5% of sales withheld by government agencies or GOCCs. Remember that the VAT payable on sales to government and GOCCs is zero because the VAT due (5%) is pre-deducted at source. This amount is also deducted from the VAT payable in computing the VAT still due or overpayment ADVANCED VAT - The owners or sellers of the following goods are required to pay advanced VAT before their withdrawal at the point of production: a. Refined sugar b. Flour c. Naturally grown and planted timber products ADVANCED VAT ON THE SALE OF SUGAR - Before any warehouse receipts or quedans are issued or before the sugar is withdrawn from the sugar mill/refinery, the advanced VAT shall be paid by the owner/seller to the BIR or deputized city or municipal treasurer *Base price of advanced VAT: P1,400 per 50kg. bag ADVANCED VAT ON THE SALE OF FLOUR BY MILLERS - VAT from imported wheat shall be paid prior to the release from Custom’s custody of the wheat or the purchase of imported wheat from traders shall be paid by the flour miller prior to delivery of the wheat by the trader  ADVANCED VAT ON THE SALE OF FLOUR BY MILLERS 1. For wheat imported by millers Advanced VAT = 12% x 75% x 105% x (Invoice value at the currency exchange rate on the time of payment + Estimated custom duties and other charges prior to the release of the imported wheat from custom’s custody)  ADVANCED VAT ON THE SALE OF FLOUR BY MILLERS 2. For wheat purchased by flour millers from wheat traders Advanced VAT = 12% x 75% x 105% x (Invoice value + Estimated Freight) ADVANCED VAT ON THE TRANSPORT OF NATURALLY GROWN AND PLANTED TIMBER PRODUCTS - Shall be paid in advance by the owner/seller to the BIR through authorized agent bank (AAB), revenue collection officers (RCO), or deputized municipal treasurers in place where there are no AABs. ADVANCED VAT ON THE TRANSPORT OF NATURALLY GROWN AND PLANTED TIMBER PRODUCTS *For Luzon and Visayas Luzon, Visayas, Mindanao ** For Mindanao Philippine Mahogany, *P1,400 /m3 Manggasinoro, Manggachapui, **P1,425 /m3 Narig, Palosapis, Guijo Group Yakal Group *1,500 /m3 **1,530 /m3 Apitong Group 1,260 /m3 ADVANCED VAT ON THE TRANSPORT OF NATURALLY GROWN AND PLANTED TIMBER PRODUCTS Luzon, Visayas, Mindanao Softwood Species except Igem P715 /m3 Igem 1,275 /m3 Nato 1,000 /m3 Furniture/ Construction hardwood 950 /m3 Premium species, allowed cut 3,000 /m3 ADVANCED VAT ON THE TRANSPORT OF NATURALLY GROWN AND PLANTED TIMBER PRODUCTS Luzon, Visayas, Mindanao Lesser-used P700 /m3 Pulpwood, chip wood and mathwood species 95 /m3 (per m3)  TAX STILL DUE - The resultant “tax still payable” in the VAT return is paid to the government as follows: 1. 1st month of the quarter – within 20 days after the end of the month 2. 2nd month of the quarter – within 20 days after the end of the month 3. 3rd month of the quarter – within 25 days after the end of the quarter OVERPAYMENT -may be treated as “Input VAT carry-over” to the succeeding period -must be claimed within 2 years from BIR, BoI, or DOF 1. Overpayments arising from input VAT on zero-rated sales (Tax Refund or TCC) 2. Overpayments arising from advanced input VAT (TCC)  Prescriptive period for claim for refund or tax credit The two-year prescriptive period for the claim for refund or tax credit is counted from the close of the taxable quarter when the zero-rated sales were made, not from the date of payment of the VAT No other remedy for unutilized input VAT on zero-rated sales The unutilized creditable input VAT attributable to zero-rated sales can only be recovered through the application for refund or tax credit Perfect matching of input VAT with zero-rated sales not required When Input VAT may be claimed for refund There are only two cases where a taxpayer can ask for refund of input VAT: 1. Unutilized input VAT on zero-rated sales 2. Unutilized input VAT upon cancellation of VAT registration due to retirement from or cessation of business COMPLIANCE REQUIREMENTS 1. Invoicing requirement 2. Accounting requirement 3. Filing of VAT return 4. Filing of quarterly summary lists 5. Government withholding VAT INVOICING REQUIREMENTS A VAT registered person shall issue: 1. A VAT invoice for every sale, barter or exchange of goods or properties; and 2. A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services A VAT registered may use single or different invoice or receipt for the taxable, exempt and zero-rated components of its sales. ACCOUNTING REQUIREMENT All person subject to VAT shall maintain 1. Regular accounting records 2. Subsidiary sales journal 3. Subsidiary purchase journal FILING OF VAT RETURN Who are required to file VAT returns: 1. Any person or entity who, in 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 exceeds P3,000,000 2. A person required to register as a VAT taxpayer but failed to register 3. Any person who imports goods, whether or not made in the course of his trade or business WHERE TO FILE VAT RETURN? TO THE FOLLOWING IN ORDER OF PRIORITY: 1. Authorized agent bank under the jurisdiction of the RDO/LTO where the taxpayer is required to be registered 2. Revenue collection officer 3. Duly authorized treasurer of the municipality or city Quarterly Summary Lists (SLSP) 1. Quarterly summary list of sales to regular buyers or customers, casual buyers or customers and output tax 2. Quarterly summary list of local purchases and input tax 3. Quarterly summary list of importation Deadline= Same with 2550Q Penalties= 1,000 Aggregate amount not tp exceed P25,000 BIR RELIEF SYSTEM A taxpayer’s quarterly sales and purchases are submitted to the BIR’s website through the RELIEF data entry system The reconciliation of listing for enforcement (RELIEF) system supports the third party information program and voluntary assessment program of the BIR through cross-referencing of third party information with the taxpayer’s quarterly summary lists of sales and purchases SUSPENSION OF BUSINESS OPERATIONS AND TEMPORARY CLOSURE OF BUSINESS The CIR or his duly authorized representatives are empowered to suspend business operations for any of the following violations: A. For a VAT-registered person 1. Failure to issue receipts or invoices 2. Failure to file VAT return 3. Understatement of taxable sales or receipt by 3-% or more of his correct taxable sales or receipts for the taxable quarter B. Failure to register as a taxpayer The temporary closure of the establishment shall be for the duration of not less than 5 days and shall be lifted only upon compliance with whatever requirements prescribed by the CIR on the closure order CANCELLATION OF VAT REGISTRATION The approval of request for cancellation of VAT registration shall be effective on the first day of the month following the month of approval of the cancellation. LIABILITY OF A NON-VAT PERSON WHO ISSUES A VAT INVOICE/ RECEIPT Shall be subject to the usual percentage tax, and output VAT without the benefit of an input tax plus a 50% surcharge FINAL WITHHOLDING BY THE GOVERNMENT OR GOCCs The legal requirement for the final withholding of VAT shall apply if the goods or services purchased from VAT suppliers were vatable. Exception to the 5% final withholding tax 1. Lease or use of proprietary rights of non-residents -- subject to 12% VAT 2. Purchase of goods or services arising from projects funded by the Official Development Assistance (ODA) under RA 8182 References Business and Transfer Taxation 2019 edition by Rex Banggawan CPA Reviewer in Taxation 2018 edition by Enrico D. Tabag Reviewer in Taxation by Asser S. Tamayo CPAR RESA