Value-Added Tax (VAT) is a consumption tax placed on sellers engaged in trade or business in the Philippines. VAT applies to the seller’s products and services during the manufacturing or retail process. According to the Bureau of Internal Revenue (BIR), VAT may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.
The government applies VAT to products and services at a rate of 0% to 12% to the prices of goods or services sold, depending on the businesses’ transactions. BIR also levies imported goods from abroad with VAT.
Current VAT Rates
As of this writing, the BIR imposed tax rates for the following items subject to VAT in the Philippines:
- Sale of Goods and Properties
- 12% VAT for the gross selling price or gross value in money of goods and properties sold, bartered or exchanged.
- Sale of Services and Use or Lease of Properties
- 12% VAT of gross receipts acquired from the sale or exchange of services, including properties used or leased by individuals.
- Export Sales and Other Zero-Rated Sales
- Sale of Goods and Services are subject to 0% VAT for PEZA-registered entities enjoying fiscal incentives.
Entities Required to File VAT Returns
According to BIR, the following individuals are required by law to file and declare their VAT Returns:
- VAT-registered individuals or businesses engaged in selling, exchanging, leasing of goods or properties, and rendering services, if the actual gross sales or receipts accumulate up to Php 3,000,000.00;
- Taxpayers required to sign up as a VAT taxpayer but failed to register; and
- Any individual who imports goods regardless if it’s in line with the course of their business or not.
According to BIR’s guidelines, VAT taxpayers must file their declarations as long as their VAT registration is ongoing, regardless if there are no taxable transactions during the month or the business does not exceed the P1,500,000.00 threshold for 12 months.
Table of BIR Forms for VAT
We file the following tax returns for businesses and individuals:
|Prescribed Filing Period*
|Monthly Value-Added Tax Declaration
Not later than the 20th day following the end of the month.
|Quarterly Value-Added Tax Return
|Not later than the 25th day following the end of each taxable quarter.
“Taxable quarter” means that the quarter is synchronized with the taxpayer’s income tax quarter (e.g. Calendar Quarter or Fiscal Quarter)
*Deadlines for clients registered under the Electronic Filing and Payment System (eFPS) may vary.
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