Business Tax: Value-Added Tax (Compliance b.

If the sale is subject to zero percent (0%) VAT, the term

Requirements) “zero-rated sale” shall be written or printed
prominently on the invoice or receipt;
VAT Invoicing Requirements c. If the sale involves goods, properties or services some
A VAT-registered person shall issue: of which are subject to and some of which are VAT
zero-rated or VAT-exempt, the invoice or receipt shall
1. A VAT invoice for every sale, barter or exchange of clearly indicate the break-down of the sale price
goods or properties; and between its taxable, exempt and zero-rated
2. A VAT official receipt for every lease of goods or components, and the calculation of the VAT on each
properties, and for every sale, barter or exchange of portion of the sale shall be shown on the invoice or
services. receipt. The seller has the option to issue separate
invoices or receipts for the taxable, exempt, and
The invoice/receipt shall be valid for 5 years from date of zero-rated components of the sale.
permit to use. However, starting July 16, 2022, the 5-year
validity period of such receipts was removed. Thus, the 3. In the case of sales in the amount of one thousand
validity of the receipts no longer have expiry. pesos (P1,000.00) or more where the sale or transfer is
made to a VAT-registered person, the name, business
VAT Invoicing Requirements style, if any, address and TIN of the purchaser,
customer or client, shall be indicated in addition to
The following information shall be indicated in VAT invoice
the information required in (1) and (2) of this Section.
or VAT official receipt:
1. A statement that the seller is a VAT-registered person, VAT Invoicing Requirements of Deemed Sale Transactions
followed by his TIN;
2. The total amount which the purchaser pays or is
obligated to pay to the seller with the indication that
such amount includes the VAT; Provided, That:
The amount of tax shall be shown as a separate item in the
invoice or receipt;
a. If the sale is exempt from VAT, the term “VAT-exempt
sale” shall be written or printed prominently on the
invoice or receipt;
VAT Filing and Payment SUBMISSION OF QUARTERLY SUMMARY LIST OF SALES AND
PURCHASES
Monthly VAT declaration and payment of VAT

VAT Filing and Payment

Filing of Quarterly VAT return and Payment of VAT

SUSPENSION OF BUSINESS OPERATIONS

The Commissioner of Internal Revenue or his duly authorized
representative may order suspension or closure of a
business establishment for a period of not less than five (5)
days for any of the following violations:
Payment of VAT on Importation 1. Failure to issue receipts and invoices.
The VAT on importation shall be paid by the importer prior 2. Failure to file VAT return as required under the
to the release of such goods from customs custody provisions of Sec. 114 of the Tax Code.
WHERE TO FILE AND PAY VAT 3. Understatement of taxable sales or receipts by 30% or
more of his correct taxable sales or receipt for the
taxable quarter.
4. Failure of any person to register as required under the
provisions of Sec. 236 of the Tax Code.
MANDATORY REGISTRATION UNDER VAT SYSTEMS
Any person who, in the course of trade or business, sells,
barters or exchanges goods or properties or engages in the
sale or exchange of services shall be liable to register if:
 1. His gross sales or receipts for the past twelve (12) e. For purposes of VAT, any person who has registered
months, other than those that are exempt under Sec. VAT as a tax type shall be referred to as a VAT-
109 (A) to (BB) have exceeded Three million pesos registered person who shall be assigned only one TIN
(P3,000,000.00); or
REQUIRED ATTACHMENTS TO VAT RETURNS
2. There are reasonable grounds to believe that his gross
Monthly VAT Declarations
sales or receipts for the next twelve (12) months, other
than those that are exempt under Sec. 109 (A) to (BB, BIR Form 2550M - Monthly Value-Added Tax Declaration
will exceed Three million pesos (P3,000,000.00) (February 2007 ENCS)
OPTIONAL REGISTRATION UNDER VAT SYSTEMS Documentary Requirements:
Persons allowed optional VAT registration: 1. Duly issued Certificate of Creditable VAT Withheld at
Source (BIR Form No. 2307), if applicable
a. Any person who is VAT exempt under Section 109
(aa) not required to register for VAT may elect to be 2. Summary Alphalist of Withholding Agents of Income
VAT-registered by registering with the RDO that has Payments Subjected to Withholding Tax at Source
jurisdiction over the head office of that person, and (SAWT), if applicable
pay the annual registration fee of P500 for every
3. Duly approved Tax Debit Memo, if applicable
separate and distinct establishment or place of
business, including facility types where sales 4. Duly approved Tax Credit Certificate, if applicable
transactions occur, shall be paid upon registration
5. Authorization letter, if return is filed by authorized
and every year thereafter on or before the last day
representative.
of January
REQUIRED ATTACHMENTS TO VAT RETURNS
b. Cooperatives, individuals earning purely
compensation income, whether locally or abroad, Quarterly Value-Added Tax Return
and overseas workers are not liable to the registration
BIR Form No. 2550Q - Quarterly Value-Added Tax Return
fee herein imposed
(February 2007 ENCS)
c. Any person who elects to register optionally shall not
Documentary Requirements:
be entitled to cancel his registration for the next three
(3) years 1. Duly issued Certificate of Creditable VAT Withheld at
Source (BIR Form 2307), if applicable
d. Any person who elected to pay 8% tax on gross sales
or receipts shall not be allowed to avail of this option
 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
Authorization letter, if return is filed by authorized
representative