Law Summary
Scope and Definitions
- Advance VAT applies to sales of flour milled from imported wheat.
- "Flour Miller" refers to those milling imported wheat into flour.
- "Wheat Trader" refers to entities trading or importing wheat.
Advance VAT Payment and Compliance Requirements
- Flour millers must pay VAT in advance at accredited banks corresponding to their tax registration.
- Withdrawal of imported wheat from customs requires proof of advance VAT payment via ATRIG (Authority to Release Imported Goods).
- Local wheat traders must ensure withdrawal of wheat is only upon presentation of a Certificate of Advance Payment on VAT.
- Wheat importers (both millers and traders) must secure ATRIG for all wheat imports.
- Importation of wheat is exempt from advance VAT for traders but requires monitoring through ATRIG.
- Wheat importation is an exception to general exemptions on ATRIG issuance.
Filings and Applications
- ATRIG applications must be filed at specific offices based on taxpayer registration and port of entry jurisdiction.
- Applications for Certificates of Advance Payment on VAT on Flour are filed with relevant RDO or LTAD offices.
- Applications must include complete supporting documents and are processed within one business day.
- Supporting documents include sales invoices, receipts, VAT payment forms, and relevant certifications.
Procedures for Importers and Millers
- Customs offices verify compliance and payment of advance VAT before releasing wheat.
- Proper stamping, logging, and signature procedures must be followed upon application receipt.
- Millers’ applications undergo validation against the ITS database to confirm VAT payments.
- Issuance of ATRIG and certificates follows stipulated Memorandum Orders and applicable guidelines.
Computation of Advance VAT
- For imported wheat by millers:
- Compute VAT at 10% on 75% of the sum of: invoice value in local currency, estimated customs duties, and a 5% markup on these sums.
- For wheat bought locally from traders:
- Compute VAT similarly on 75% of invoice value, estimated freight, and a 5% markup.
- Examples illustrate the computation using real values.
Tax Credits and Reporting
- Advance VAT paid is creditable against the miller's output VAT per Section 107 of the 1997 NIRC.
- Details of advance VAT payments must be indicated in quarterly VAT returns.
- Pending changes, VAT payments to be disclosed in Schedule II of BIR Form 2550Q.
Penalties for Non-Compliance
- Violations will incur penalties as prescribed in Sections 254 and 275 of the National Internal Revenue Code of 1997, as amended.
Repealing Clause
- Inconsistent prior issuances are repealed, modified, or amended accordingly.
Effectivity
- The guidelines take immediate effect upon adoption on December 29, 2003.