This document summarizes input VAT rules in the Philippines. It discusses transitional input VAT calculated as 2% of beginning inventory, which can be claimed in the month of registration. It also discusses regular input VAT paid on domestic purchases or imports, which can generally be claimed in the month of purchase or payment. Input VAT on capital goods exceeding 1 million pesos per month must be deferred and amortized over the useful life. The document outlines the requisites and timing for claiming different types of input VAT credits.
This document summarizes input VAT rules in the Philippines. It discusses transitional input VAT calculated as 2% of beginning inventory, which can be claimed in the month of registration. It also discusses regular input VAT paid on domestic purchases or imports, which can generally be claimed in the month of purchase or payment. Input VAT on capital goods exceeding 1 million pesos per month must be deferred and amortized over the useful life. The document outlines the requisites and timing for claiming different types of input VAT credits.
This document summarizes input VAT rules in the Philippines. It discusses transitional input VAT calculated as 2% of beginning inventory, which can be claimed in the month of registration. It also discusses regular input VAT paid on domestic purchases or imports, which can generally be claimed in the month of purchase or payment. Input VAT on capital goods exceeding 1 million pesos per month must be deferred and amortized over the useful life. The document outlines the requisites and timing for claiming different types of input VAT credits.
This document summarizes input VAT rules in the Philippines. It discusses transitional input VAT calculated as 2% of beginning inventory, which can be claimed in the month of registration. It also discusses regular input VAT paid on domestic purchases or imports, which can generally be claimed in the month of purchase or payment. Input VAT on capital goods exceeding 1 million pesos per month must be deferred and amortized over the useful life. The document outlines the requisites and timing for claiming different types of input VAT credits.
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CHAPTER 9: INPUT VAT whether or not they previously paid taxes and
acquisition of their beginning inventory of
INPUT VAT - Refers to VAT due or paid by a VAT goods materials and supplies registered person on importation or local - The transitional input VAT applies only to purchases of goods, properties, or services, beginning inventory of goods materials or including lease or use of properties in the course supplies excluding exempt beg. inventory, of his trade or business. equipment and other capital goods - Input VAT is not part of the inventory to a VAT taxpayer for income tax purposes. Hence What if the VAT is not separately billed? it must be removed from the basis of the 2% - the selling price stated in the sales transitional input VAT. document shall be deemed to inclusive of VAT. B. REGULAR INPUT VAT - is the 12% VAT paid on domestic purchase REQUISITES OF A CREDITABLE INPUT VAT: of goods, services, or properties, or importation of goods or services. 1. The input VAT must have been paid o incurred in the course of trade or business. TIMING OF CREDIT OF REGULAR INPUT VAT 2. The input VAT is evidenced by a VAT invoice or official receipt. SOURCES TIMING 3. The VAT invoice or receipt must be issued by Purchase of goods or properties Month of purchase a VAT registered person. Purchase of services Month paid 4. Input VAT is incurred in relation to vatable Importation of goods Month VAT is paid sales not from exempt sales. Purchase of depreciable capital goods or properties - General treatment Month of purchase Note: - When the MONTHLY AGGREGATE Amortized over useful life - the purchases from non-VAT suppliers acquisition cost (cost excluding VAT) in moths or 60 months and purchases of VAT exempt goods or exceeds P1,000,000 whichever is shorter. properties have no input VAT Purchase of non-depreciable vehicles Not creditable - The input VAT on purchase is not intended and on maintenance incurred for business (personal use) it's non thereon. creditable against the output VAT - input but evidenced by ordinary receipt rather than by a VAT invoice or VAT official C. AMORTIZATION OF DEFERRED INPUT receipt is not creditable. VAT
INPUT VAT on PURCHASE OF CAPITAL GOODS
A. TRANSITIONAL INPUT VAT OR PROPERTIES - equivalent to 2% of the VATABLE beginning inventory of goods, materials, or supplies or the actual VAT paid thereon IF THE MONTHLY AGGREGATE ACQUISITION COST OF whichever is HIGHER. DEPRECIABLE CAPITAL GOODS (USEFUL LIFE >1 YEAR) Does not exceed Input VAT is claimable in the month of COMPUTE THE TAX ON VATABLE GOODS: P1,000,000 purchase Input VAT from Purchases from VAT sellers vs. Exceeds Amortized over useful life in months or 2% Transitional Input VAT whichever is higher P1,000,000 60 months whichever is shorter.
REQUISITES: The input VAT to be amortized is called “Deferred input
VAT”. 1. The taxpayer must submit an inventory list of goods. Note: 2. The taxpayer must prepare an entry - Car for personal use is capital asset rather recognizing the transitional input VAT credit in than an ordinary asset subject to his accounting books. depreciation; hence excluded from the monthly aggregate acquisition cost. TIMING OF CREDIT OF TRANSITIONAL INPUT - Goods for sale are not capital goods and VAT: non-depreciable; hence excluded. - The transitional input VAT shall be claimable in the month of registration as a \ VAT taxpayer.
Note: - the transitional input tax credit operates to benefit newly VAT- registered persons
