*Assume the company is a VAT registered entity

Regular Sales to Vat registered customer

Regular Sales to Non VAT customer
Zero rated sales (i.e. exports)
Sale of VAT exempt products (i.e. agricultural produce)
Transaction deemed sales
Regular Purchases from Vat registered supplier
Regular Purchases from Non VAT supplier
Importation for business use
Importation for personal
Purchase of VAT exempt goods (i.e. agrigultural produce)
Purchases related to zero rated sales
First time VAT registered as to their beginning inventories
Manufacturer of essential food (i.e. canned sardines/mackerel, cooking oil, etc)

Example
XYZ VAT registered company (Seller of goods), has the following sales for the month of Ju
Sales to VAT customers, on account 500,000.00
Sales to non VAT customers, cash sales 200,000.00
Installment sales (50% collected) 100,000.00
Advance payment or deposits from customers 80,000.00
Merchandise for sale used as payment to creditors 50,000.00
Consigned goods not yet sold by consignee:
Received on June 30 10,000.00
Received on May 31 20,000.00
Received on April 30 40,000.00
1) Determine Output tax

Sales to VAT customers, on account 500,000.00

Sales to non VAT customers, cash sales 200,000.00
Installment sales (50% collected) 100,000.00
Merchandise for sale used as payment to creditors 50,000.00
Consigned goods not yet sold by consignee 60,000.00
910,000.00
12%
Output tax 109,200.00

XYZ VAT registered company (Seller of goods), has the following sales for the month of Ju
Purchases of vatable merchandise from VAT companies 400,000.00
Purchases of vatable merchandise from nonVAT companies 200,000.00
Purchase returns to VAT suppliers 40,000.00
Purchase returns to nonVAT suppliers 20,000.00
Purchases of vegetables and fruits for sale from farmers 80,000.00
Purchases of Office supplies 50,000.00
Operating expenses (salaries, depreciation) 150,000.00
Deferred input tax (Excess input tax from previous month) 5,000.00
Goods used as samples 10,000.00
2) Determine the allowed creditable input tax.

Purchases of vatable merchandise from VAT companies 400,000.00

Purchase returns to VAT suppliers (40,000.00)
Purchases of Office supplies 50,000.00
410,000.00
12%
Input tax from current purchases 49,200.00
Excess input tax carry over from last period 5,000.00
Total creditable input tax 54,200.00

3) Determine the VAT payable

Vat payable for July 55,000.00
 Output Tax Input Tax
Yes
Yes
0%
No
Yes
Yes
No
Yes
No
No
Yes
Transitional input tax 2% or actual paid whichever is higher
4% Presumptive input tax

for the month of July (VAT exclusive amounts given)

not included in output tax if seller of service

only 50% is included in output tax if seller of service

included in output tax only if seller of service
Transaction deemed sale

Transaction deemed sale

Transaction deemed sale
for the month of July (VAT exclusive amounts given)

ignore since related to nonVAT supplier

VAT exempt

not subject to VAT

already included in the purchases

Outpu - Input tax

whichever is higher
Deferred Input Tax on Capital Goods (Import or purchase of Depreciable Goods) Amortization allow

Amount net of VAT (VAT exclusive) USEFUL LIFE

Total amount for the month > P1 million = or > 5 years usefu life

Total amount for the month > P1 million < 5 years useful life

Total amount for the month < or = P1 million Regardless of useful life

Example 1: XYZ (VAT registered) purchasedthe following depreciable equipments from abroad du
Equipment Amount Vat exclusive
Equipment 1 ₱400,000.00
Equipment 2 ₱600,000.00
Equipment 3 ₱800,000.00
Determined allowed input tax for the month of January

Equipment Amount Vat exclusive

Equipment 1 ₱400,000.00
Equipment 2 ₱600,000.00
Equipment 3 ₱800,000.00
Total VAT exclusive amount ₱1,800,000.00
*Greater than P1M

Example 2: XYZ (VAT registered) purchased the following depreciable equipments for the month
Equipment Amount VaT inclusive
Equipment 4 ₱224,000.00
Equipment 5 ₱560,000.00
Equipment 6 ₱336,000.00
Assume Example 2 is a continuation of example 1.
1) Amount of input tax from the february purchase
2) Determined allowed input tax for the month of February
Equipment 4 ₱224,000.00
Equipment 5 ₱560,000.00
Equipment 6 ₱336,000.00
₱1,120,000.00
Less: Input tax ₱120,000.00
Total VAT exclusive amount ₱1,000,000.00

Question: Amount of input tax from the february purchase

Answer: P120,000

Question: Determined allowed input tax for the month of February

From January purchases of equipment ₱4,866.67

Grom February purchases of equipment ₱120,000.00
Total input tax allowed for february ₱124,866.67
ods) Amortization allowed until December 31, 2021

INPUT TAX

Spread evenly every month over 60 months (5 years)

Spread evenly every month using the useful life

Input tax NOT amortized. Credit the full amount of input tax

pments from abroad during the month of January, 2020

Useful Life Date Purchase
4 years 1-Jan-20
8 years 10-Jan-20
3 years 23-Jan-20

Input VAT Life in months

₱48,000.00 48
₱72,000.00 60
₱96,000.00 36
Input tax for January

pments for the month of February 2020

Useful Life Date Purchase
4 years 1-Feb-20
8 years 14-Feb-20
3 years 28-Feb-20
To be credited as input tax in full
Not to be amortized, amount is = to P1million
Amortized Input Tax
₱1,000.00
₱1,200.00
₱2,666.67
₱4,866.67
ABC Canning Corporation is engaged in canned mackerel and cooking oil (VAT not included)
Sales to VAT customers 2,000,000.00
Sales to nonVAT customers 1,000,000.00
Sales discounts 100,000.00
Sales returns 200,000.00
Purchases:
Fresh mackerel 400,000.00
Palm and vegetable used in cooking oil 500,000.00
Salt unrefined and unprocessed used in canned mackerel 10,000.00
Onions and garlic used in canned mackerel 50,000.00
Packaging and cartons from VAT supplier 100,000.00
Other supplies from VAT supplier 80,000.00
Other supplies from nonVAT supplier 120,000.00

Determine:
1) Output tax
2) Input tax
3) Vat Payable
4) Excess input tax

Sales to VAT customers 2,000,000.00

Sales to nonVAT customers 1,000,000.00
Sales discounts (100,000.00)
Sales returns (200,000.00)
Sales subject to VAT 2,700,000.00
12%
1) Output tax 324,000.00

Palm and vegetable used in cooking oil 500,000.00

Salt unrefined and unprocessed used in canned mackerel 10,000.00
Onions and garlic used in canned mackerel 50,000.00
560,000.00
4%
Presumprive input tax 22,400.00

Packaging and cartons from VAT supplier 100,000.00

Other supplies from VAT supplier 80,000.00
180,000.00
12%
Regular input tax 21,600.00
2) Input tax 44,000.00

Output tax 324,000.00

Input tax 44,000.00
3) Vat Payable 280,000.00

4) Excess input tax 0

(VAT not included)

Without presumptive input tax, VAT exempt

Presumptive input tax
Presumptive input tax
Presumptive input tax
12% input tax
12% input tax
no input tax
Presumprive input tax + Regular input tax
First time VAT Registered entity on April 1, 2021 (Amounts are VAT exclusive)
Information during March 2021:
1) Inventory as of March 31, 2021
a) From VAT supplier 150,000.00
b) From non VAT supplier 120,000.00
c) Vat exempt inventories 50,000.00

2) Office and store supplies on hand from VAT supplier 20,000.00

3) Machineries from nonVAT supplier 200,000.00

Purchases during April 2021:

1) From VAT supplier 400,000.00
2) From non VAT supplier 500,000.00
3) Vat exempt inventories 100,000.00
4) Supplies from VAT supplier 50,000.00
5) Machinery from VAT supplier 100,000.00

Determine
1) Transitional input tax coming from beginning inventories held for sale
2) Total creditable input tax for April 2021

a) From VAT supplier 150,000.00

b) From non VAT supplier 120,000.00
Total beginning inventories subject to Transititional input tax 270,000.00
2%
2% of beginning inventories 5,400.00

a) From VAT supplier 150,000.00

12%
Actual VAT paid on beginning inventories 18,000.00

1) Transitional input tax 18,000.00

1) From VAT supplier 400,000.00

4) Supplies from VAT supplier 50,000.00
5) Machinery from VAT supplier 100,000.00
Total purchase subject to VAT 550,000.00
12%
Regular input tax from purchases 66,000.00
Transitional input tax 18,000.00
2) Total creditable input tax for April 2021 84,000.00
 input tax

input tax
input tax

es held for sale

higher than P5,400

higher between 2% and actual paid

Local Travel: Philippines to Philippines
Tranport of goods
Type Business Tax
Land 12% VAT
Air 12% VAT
Sea 12% VAT

Local Travel: Philippines to Philippines

Tranport of passengers
Type Business Tax
Land 3% OPT
Air 12% VAT
Sea 12% VAT
*Air and sea local travel within the Philippines, goods or passengers = 12% VAT
*Air and sea international transport, goods or passengers = zero rated 0% VAT

Given amounts are VAT exclusive

Example 1: ABC Common carrier engaged in local travel within the Philippines data for the month
Gross receipts from cargoes - sea vessel
Gross receipts from passengers - aircraft
Supplies and materials paid to VAT registered supplier
Supplies and materials paid to nonVAT registered supplier
Determine:
1) Output tax
2) Input tax
3) Vat Payable
4) Excess input tax

Gross receipts from cargoes - sea vessel

Gross receipts from passengers - aircraft

1) Output tax
Supplies and materials paid to VAT registered supplier

2) Input tax

3) Vat Payable

4) Excess input tax

Example 2: ABC Common carrier engaged in international travel to foreign countries data for the
Gross receipts from cargoes - sea vessel
Gross receipts from passengers - aircraft
Supplies and materials paid to VAT registered supplier
Supplies and materials paid to nonVAT registered supplier
Determine:
1) Output tax
2) Input tax
3) Vat Payable
4) Excess input tax

1) Output tax

Supplies and materials paid to VAT registered supplier

2) Input tax

3) Vat Payable

4) Excess input tax

Example 3: ABC Land Transport is engaged in local transportation within the Philippines for the 1
Gross receipts from cargoes
Gross receipts from passengers
Supplies paid to VAT registered supplier (for cargo transport)
Supplies paid to nonVAT registered supplier (for passenger transport)
Determine:
1) Output tax
2) Input tax
3) Vat Payable
4) Excess input tax

Gross receipts from cargoes

1) Output tax

Supplies paid to VAT registered supplier (for cargo transport)

2) Input tax

3) Vat Payable

4) Excess input tax

 International Travel: Philippines to Abroad
Tranport of goods
Type Business Tax
Air 0% VAT - Zero Rated Sales
Sea 0% VAT - Zero Rated Sales

International Travel: Philippines to Abroad

Tranport of goods
Type Business Tax
Air 0% VAT - Zero Rated Sales
Sea 0% VAT - Zero Rated Sales

rs = 12% VAT
ated 0% VAT

he Philippines data for the month of April 2019

600,000.00 output tax
800,000.00 output tax
200,000.00 input tax
100,000.00 without input tax

600,000.00
800,000.00
1,400,000.00
12%
168,000.00
 200,000.00
12%
24,000.00

144,000.00 Output - input tax

to foreign countries data for the month of April 2019

600,000.00
800,000.00
200,000.00
100,000.00

0 Zero rated sales

200,000.00
12%
24,000.00

0 Not Vat payment

(24,000.00)

n within the Philippines for the 1st quarter 0f 2019

600,000.00 12% VAT
800,000.00 3% OPT
200,000.00 Input tax
100,000.00

600,000.00
12%
72,000.00

200,000.00
12%
24,000.00

48,000.00

0
XYZ has the following Data for the Second Quarter of 2020
Excess input tax from previous Quarter 20,000.00

1st Month 2nd Month 3rd Month

Outpu tax 170,000.00 120,000.00 210,000.00
Input tax 80,000.00 250,000.00 50,000.00

Determine:
1) Vat payable for the 1st month
2) Vat consequence for the second month
3) Vat payable at the end of the 2nd quarter

1st Month
Outpu tax 170,000.00
Less: Input tax 80,000.00
Excess input tax previous quarter 20,000.00
1) Vat payable for the 1st month 70,000.00

2nd Month
Outpu tax 120,000.00
Less: Input tax 250,000.00
2) Vat consequence for the second month (130,000.00) Excess input tax

2nd Quarter
Total outpu tax (1st + 2nd + 3rd months) 500,000.00
Less: Total input tax (1st + 2nd + 3rd months) 380,000.00
Excess input tax previous quarter 20,000.00
Total VAT due 100,000.00
Less: Vat paid (1st month) 70,000.00
3) Vat still payable at the end of the 2nd quarter 30,000.00
Mixed transactions
*Allocate proportionately the purchases attributed to both VAT and nonVAT transactions using the

Example: XYZ is engaged in both VAT transaction and nonVAT transaction (VAT exclusive amount
Sales attributable to VAT subject transactions 1,200,000.00
Sales attributable to nonVAT transactions 800,000.00
Purchases attributable to VAT subject transactions 300,000.00
Purchases attributable to nonVAT transactions 400,000.00
Purchases attributable to both VAT and nonVAT transactions 600,000.00
Total administrative expenses 100,000.00
Total marketing and selling expenses 50,000.00

Determine
1) Output tax
2) Input tax
3) VAT payable

Sales attributable to VAT subject transactions 1,200,000.00

12%
1) Output tax 144,000.00

Purchases attributable to both VAT and nonVAT transactions 600,000.00

Percentage of VAT sales to total sales 60%
Allocation of mixed purchases to VAT subject transactions 360,000.00
Purchases attributable to VAT subject transactions 300,000.00
Total putchases attributed to VAT subject transactions 660,000.00
12%
2) Input tax 79,200.00

Output tax 144,000.00

Less: Input tax 79,200.00
3) VAT payable 64,800.00
ansactions using the amount of sales

AT exclusive amounts)

ignore

ignore
Allocate the mixed purchases to VAT subject transaction
ignore
ignore

VAT sales divided by total sales [1,200,000/2,000,000]