Question & AnswerQ&A (BIR REGULATIONS NO. 11-2003)
The regulation amends the transitory provisions under Revenue Regulations No. 1-2003 as amended by Revenue Regulations No. 3-2003, to extend the deadline for registration and compliance requirements during the transitional imposition of VAT on sale of services by certain professionals and service providers starting January 1, 2003.
Persons engaged in the practice of profession or calling, general professional partnerships, actors, actresses, talents, singers, emcees, radio and television broadcasters, choreographers, musical, radio, movie, television and stage directors, professional athletes, and customs, real estate, stock, immigration and commercial brokers are covered.
Affected taxpayers are required to register as VAT or Non-VAT taxpayers without penalty not later than March 19, 2003.
The VAT Declaration/Monthly Percentage Tax Return for January 2003 transactions must be filed no later than the deadline for filing the February 2003 returns, specifically March 20, 2003 for regular/manual filers, and as prescribed for those using the Electronic Filing and Payment System (EFPS).
Yes, sales of services by professionals and other covered service providers are subject to VAT beginning January 1, 2003, except for those whose gross receipts in the preceding year or expected receipts for the current year do not exceed ₱550,000, who shall pay only the 3% percentage tax unless they opt to be VAT-registered.
They must submit an inventory of unused receipts as of December 31, 2002 indicating booklet numbers and serial numbers by March 19, 2003. Unused Non-VAT receipts may be used for VAT transactions if stamped "VAT registered as of _______" and valid until June 30, 2003.
Amounts due for services rendered on or before December 31, 2002 but unpaid after are considered accrued as of that date for VAT exemption and percentage tax payment, subject to specific filing, billing, recording, receipt issuance, and return filing conditions by March 19, 2003. Failure to comply results in subjecting the gross receipts to VAT.
A presumptive input tax equivalent to 8% of the value or the actual VAT paid, whichever is higher, is allowed for goods, materials, or supplies purchased for business use not for sale and not intended for further processing, provided inventories are filed by March 19, 2003. Brokers have different provisions concerning input tax.
These regulations took effect immediately after publication in a newspaper of general circulation following their adoption on February 27, 2003.