Law Summary
Extension and Transition of VAT Registration Deadline
- Registration of affected taxpayers as VAT or Non-VAT taxpayers without penalty extended to March 19, 2003.
- VAT Declaration/Monthly Percentage Tax Return for January 2003 must be filed by the filing deadline for February 2003 transactions (March 20, 2003 for manual filers).
- Services rendered starting January 1, 2003, are subject to VAT output tax unless gross receipts in prior year do not exceed P550,000.
- Taxpayers below threshold may pay 3% percentage tax instead unless opting into VAT.
- VAT-registrable persons may issue Provisional or Temporary Receipts pending VAT registration, to be replaced by VAT Official Receipts to allow clients to claim input tax credit.
Treatment of Unused Receipts
- Taxpayers changing from Non-VAT to VAT status must submit inventory of unused receipts as of December 31, 2002 by March 19, 2003.
- Unused Non-VAT receipts can be used for VAT transactions if stamped properly indicating VAT registration date.
- These receipts may be used until June 30, 2003.
Billed But Uncollected Sale of Services Prior to VAT Effectivity
- Sale of services rendered on/before December 31, 2002 but unpaid as of January 1, 2003 treated as accrued at December 31, 2002 for VAT exemption purposes.
- Conditions include filing an information return with details of unpaid amounts, billing date, proper receivables recording, issuance of non-VAT official receipts, and filing applicable percentage tax return.
- Failure to comply results in gross receipts being subject to VAT.
Transitional Input Tax Credits
- For goods, materials, or supplies on hand as of December 31, 2002, presumptive input tax of 8% of value or actual VAT paid is allowed whichever is higher.
- An inventory of such goods must be filed with the RDO by March 19, 2003.
- Accounting entries must reflect this recognition (debit input tax, credit asset accounts).
- Provision excludes brokers.
- Brokers may claim input tax outstanding from books and VAT returns filed as of December 31, 1999 through December 31, 2002.
Repealing Clause
- All prior regulations, orders, or instructions inconsistent with these amendments are repealed or modified accordingly.
Effectivity Clause
- Regulations take effect immediately upon publication in a newspaper of general circulation.