QuestionsQuestions (Republic Act No. 7716)
It implements RA 8241’s amendments to the Expanded VAT Law (RA 7716) and relevant provisions of the National Internal Revenue Code (as amended), by amending specific sections of Rev. Regs. No. 7-95 and clarifying VAT application, zero-rating, exemptions, registration, withholding, and related rules.
They become liable to VAT on their sale of taxable goods or properties (as stated in the amended Section 4.100-1, par. 4).
Yes. Goods and imports subject to excise taxes under Title VI are also subject to VAT, except coal and natural gas in whatever form or state, and manufactured petroleum products other than lubricating oil, processed gas, grease, wax and petroleum.
Sale or exchange of services and use or lease of properties (as defined under the Code) are subject to VAT.
Examples include transportation contractors on transport of goods/cargoes, domestic common carriers (land/air/water) for transport of goods/cargoes, franchise grantees of telephone/telegraph/radio/TV (subject to the thresholds and rules stated), banks and non-bank financial intermediaries/finance companies, non-life insurance companies, and similar services regardless of whether physical or mental faculties are exercised.
They are not subject to VAT, but to the 3% franchise tax under Section 117 of the Code, subject to optional registration rules under Section 4.107-1(c) of Rev. Regs. No. 7-95.
They are subject to the percentage tax under Section 115 of the Code, and NOT to VAT.
They are subject to VAT (per the amended Section 4.102-1(h)).
For example: processing/manufacturing/repacking for other persons doing business outside the Philippines whose goods are subsequently exported; certain services (including those rendered to a non-resident foreign client such as studies, information services, engineering/design) paid in acceptable foreign currency and accounted for per BSP rules; services effectively zero-rated due to exemptions under special laws/international agreements.
Yes. The text states that they are considered in their original state even if they undergo simple processes like freezing, drying, salting, broiling, roasting, smoking, stripping, or advanced technological packaging methods (e.g., shrink wrap, vacuum packing, tetra-pack).
Sale or importation of coal and natural gas (in whatever form or state) and certain petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to excise taxes under Title VI are exempt from VAT.
Mandatory VAT registration applies when aggregate actual or expected gross sales/receipts exceed P550,000.00, adjusted to its present value every year thereafter using the Consumer Price Index (as stated in Section 6(b)).
They must register within 30 days after the end of the last month of that period; VAT liability begins on the first day of the month following their registration.
VAT-exempt persons may opt to register as VAT taxpayers if they meet the stated conditions/thresholds; once franchise grantees of radio/TV (not exceeding P10,000,000 gross annual receipts) opt to register, the registration is no longer revocable.
3% of the gross payment for purchase of goods subject to VAT, and 6% on gross receipts for services rendered by contractors on every sale or installment payment; these are creditable against the seller/contractor’s VAT liability.
Payment of One Thousand Pesos (P1,000.00) and below per purchase is not subject to withholding tax.
They must pay a tax equivalent to 3% of their gross quarterly sales or receipts, except cooperatives which are exempt from the 3% gross receipts tax imposed.
They are covered starting January 1, 1998; prior to inclusion, the services continue to pay the applicable tax previously prescribed under the Code.