REPUBLIC ACT 11976 – “Ease of Paying Taxes Act”

Sec. 21. Sources of Revenue and (added: Classification of Taxpayers)

a. Micro – less than Php 3M

b. Small – Php 3M to 20M
c. Medium – Php 20M to 1B
d. Large – Php 1B and above

Sec. 58. Returns and Payment of Taxes Withheld at Source

(E) Income of Recipient – xxx

(Added) Claims for tax credit or refund of any creditable income tax which was deducted and
withheld on income payments shall be given due course only when it is shown that the income payment
has been declared as part of the gross income and the fact of withholding is established. Claims for tax
credit of any creditable income tax deducted and withheld in a previous period can still be creditable in the
subsequent calendar or fiscal year: Provided, That the same had been declared in the tax return whre the
corresponding income is reported

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Sec. 81. Filing of Return and Payment of Taxes Withheld. – Except as the Commissioner otherwise permits,
taxes deducted and withheld by the employer on wages of employees shall be covered by a return and
paid (replaced: to an authorized agent bank; collection agent, or the duly authorized Tresurer of the city or
municipality where the employer has his legal residence or principal place of business, or in case the
employer is a corporation, where the principal office is located), either electronically or manually, to any
authorized agent bank, Revenue District Office through Revenue Collection Officer, or authorized tax
software provider.

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Sec. 106. Value-Added Tax on Sales of Goods or Properties. –

(A) Rate and Based of Tax. – There shall be levied, assessed and collected on every sale, barter or
exchange of goods or properties, a value-added tax equivalent to twelve percent (12%) of the
(replaced: gross selling price or gross value in money) gross sales of goods or properties sold,
bartered or exchanged, such tax to be paid by the seller or transferor.

Sec. 108. Value-Added Tax on Sales of Services and Use or Lease of Properties. –

(A) Rate and Base of Tax. - There shall be levied, assessed and collected, a value-added tax
equivalent to twelve percent (12%) of (replaced: gross receipts) gross sales derived from the
sale or exchange of services, including the use or lease of properties.

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For the purposes of this Section, the term (replaced: “gross receipts”) “gross sales” mean the total
amount of money of its equivalent representing the contract price, compensation, service fee,
 rental or royalty, including the amount charged for materials supplied with the services (removed:
and deposits and advanced payments actually or constructively received) during the taxable
quarter for the services performed for another person (removed: ,excluding value—added tax.)
which purchaser pays or is obligated to pay to the seller in consideration of the sale, barter, or
exchange of services that has already been rendered by the seller and the use or lease of
properties that have already been supplied by the seller, excluding value-added tax and those
amounts earmarked for payment to third (3rd) party or received as reimbursement for payment
on behalf of another which do not redound to the benefit of the seller as provided under relevant
laws, rules or regulations: Provided, That for long-term contracts for a period of one (1) year or
more, the invoice shall be issued on the month in which the service, or use or lease of properties
is rendered or supplied.

(B) Transactions Subject to Zero Percent (0%) Rate. –

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(Added:) (C) Sales Allowances and Sales Discounts. – The value of services rendered for which
allowances were granted by a VAT-registered person may be deducted from the gross sales for the
quarter in which a refund is issued. Sales discount granted and indicated inn the invoice at the time
of sale and the grant of which does not depend upon the happening of a future event may be
excluded from the gross sales within the same quarter it was given.”

Sec. 109. Exempt Transactions. –

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(CC) Sale or lease of goods or properties or the performance of services other than the
transactions mentioned in the preceding paragraphs, the gross annual sales (removed: and/or
receipts) do not exceed the amount of Three million pesos (P3,000,000.00). (Added: Provided,
That the amount herein stated shall be adjusted to its present values using the consumer price
index, as published by the Philippine Statistics Authority (PSA) every three years.”)

Sec. 110. Tax Credits. –

(A) Creditable Input Tax. –

1. Any input tax evidenced by a VAT invoice (removed: or official receipt issued) in accordance
with Section 113 hereof on the following transactions shall be creditable against the
output tax:

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(v) For use in trade or business (removed: for which deduction for depreciation or
amortization is allowed under this Code).

Sec. 113. Invoicing and Accounting Requirement. –

(A) xxx
(B) Information Contained in the VAT Invoice (removed: or VAT Official Receipt). –
1. xxx
 2. xxx
a. The amount of the tax shall be known as a separate item in the invoice
(removed: or receipt);
b. If the sale is exempt from value-added tax, the term VAT-exempt sale: shall be
written or printed prominently on the invoice (removed: or receipt);
c. If the sale is subject to zero percent (0%) value-added tax, the term “zero-
rated sale” shall be written or printed prominently on the invoice (removed:
or receipt).
d. If the sale involved goods, properties or services some of which are subject to
and some of which are VAT zero-rated or Vat exempt, the invoice (removed:
or receipt) shall clearly indicate the break-down of the sale price between its
taxable, exempt and zero-rated components, and the calculation of the value-
added tax on each portion of the sale shall be known on the invoice (removed:
or receipt): Provided, That the seller may issue separate invoices (removed: or
receipt) for the taxable, exempt, and zero-rated components of the sale.
3. xxx
4. In the case of sales in the amount of One thousand pesos (P1,000) or more where the
sale or transfer is made to a VAT-registered person, the name, (removed: business
style, if any), address and Taxpayer Identification Number (TIN) of the purchaser,
customer or client.

C. xxx

D. Consequences of Issuing an Erroneous VAT Invoice. –

1. If a person who is not a VAT-registered person issues an invoice (removed: or receipt)

showing his Taxpayer Identification Number (TIN), followed by the word “VAT”;

a. xxx

b. The VAT shall, if the other requisite information required under Subsection (B)
hereof is shown on the invoice (removed: or receipt), be recognized as an input
tax credit to the purchaser under Section 110 of this Code

2. If a VAT-registered person issues a VAT invoice (removed: or VAT official receipt) for a
VAT-exempt transaction, but fails to display (removed: prominently) on the invoice
(removed: or receipt) the term ‘VAT exempt sale,’ (Added: or clearly provided for under
paragraph B(2)(d) herein) the issuer shall be liable to account for the tax imposed in
section 106 or 108 as if Section 109 did not apply.

(Added) 3. If a VAT-registered person issues a VAT-invoice to another VAT-registered person

with lacking information required under Subsection (B) hereof, the issuer shall be liable
for noncompliance with the invoicing requirement, however, the VAT shall still be allowed
to be used as input tax credit on the part of the purchaser pursuant to Section 110 of this
Code if the lacking information do not pertain to the amount of sales, amount of VAT,
name and Taxpayer Identification Number of both the purchases and issuer/seller,
description of goods or nature of services, and the date of the transaction.
Sec. 235. Preservation of Book of Accounts and Other accounting Records. – All the books of accounts,
including the subsidiary books and other accounting records of corporations, partnerships, or
persons, shall be preserved by them for a period (added: of Five (5) years reckoned from the day
following the deadline in filing a return, or if filed after the deadline, from the date of the filing of
the return, for the taxable year when the last entry was made in the books of accounts). (Removed:
beginning from the last entry in each book until the last day prescribed by Section 203 within which
the Commissioner is authorized to make an assessment.) The said books and records shall be
subject to examination and inspection by internal revenue officers: Provided, that for income tax
purposes, such examination and inspection shall be made only once in a taxable year, except in
the following cases:

SEC. 236. Registration Requirements. –

A. Requirements. –
1. xxx
2. xxx
3. xxx
4. xxx

The registration shall contain the taxpayer's name, (removed: style), place of residence,
business and such other information as may be required by the Commissioner in the form
prescribed therefor. (Added: Provided, That the Commissioner shall ensure the availability of
registration facilities to all taxpayers including those who are not residing in the country;)
Provided further, that the Commissioner shall simplify the requirements of self-employed
individuals and/or professionals.
B. (Removed: Annual Registration Fee – Annual Registration Fee - An annual registration fee in
the amount of Five hundred pesos (P500) for every separate or distinct establishment or place
of business, including facility types where sales transactions occur, shall be paid upon
registration and every year thereafter on or before the last day of January: Provided, however,
That cooperatives, individuals earning purely compensation income, whether locally or
abroad, and overseas workers are not liable to the registration fee herein imposed.

The registration fee shall be paid to an authorized agent bank located within the revenue
district, or to the Revenue Collection Officer, or duly authorized Treasurer of the city or
municipality where each place of business or branch is registered.)