Question & AnswerQ&A (EXECUTIVE ORDER NO. 181)
The threshold amount is set at Five Hundred Thousand Pesos (P500,000.00).
Transactions involving sale or lease of goods or properties, or performance of services other than those mentioned in subparagraphs (a) to (s) of Section 103 of the Tax Code, where the gross annual sales and/or receipts do not exceed P500,000.00 are exempt from VAT.
Yes, any person covered by the exemption may apply for VAT registration not later than ten (10) days before the beginning of the taxable quarter and must pay the annual registration fee prescribed in Section 107(a) of the Tax Code.
They are required to pay a tax equivalent to 3% of their gross quarterly sales and/or receipts upon the effectivity of R.A. No. 7716, and 4% thereafter two years later.
Section 103(t) of the National Internal Revenue Code (Tax Code), as amended by R.A. 7716, empowers the President to set the threshold.
The Secretary of Finance recommended the threshold amount.
No, it applies specifically to transactions other than those mentioned in subparagraphs (a) to (s) of Section 103 of the Tax Code.
Their gross annual sales and/or receipts must not exceed P500,000.00, they can apply for VAT registration within the required timeframe if desired, must pay the annual registration fee if registered, and pay the appropriate percentage tax as prescribed.