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    Business and Transfer Taxation Business Taxation - VAT (Students' Handouts)

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    Angelica Jem Ballesterol Carandang
    This document summarizes the rules for output VAT in the Philippines. It outlines the sources that are subject to output VAT, including the sale of goods, services, and real properties. It also discusses transactions that are deemed sales for VAT purposes, such as distributions to shareholders or transfers of goods not in the ordinary course of business. The VAT base and timing of reporting output VAT is provided for each type of transaction. Transactions not considered deemed sales are also listed.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Business and Transfer Taxation Business Taxation - VAT (Students' Handouts)

    Uploaded by

    Angelica Jem Ballesterol Carandang
    20 views1 page
    This document summarizes the rules for output VAT in the Philippines. It outlines the sources that are subject to output VAT, including the sale of goods, services, and real properties. It also discusses transactions that are deemed sales for VAT purposes, such as distributions to shareholders or transfers of goods not in the ordinary course of business. The VAT base and timing of reporting output VAT is provided for each type of transaction. Transactions not considered deemed sales are also listed.

    Original Description:

    REGULAR OUTPUT VAT

    Original Title

    Handout_07

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    This document summarizes the rules for output VAT in the Philippines. It outlines the sources that are subject to output VAT, including the sale of goods, services, and real properties. It also discusses transactions that are deemed sales for VAT purposes, such as distributions to shareholders or transfers of goods not in the ordinary course of business. The VAT base and timing of reporting output VAT is provided for each type of transaction. Transactions not considered deemed sales are also listed.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views1 page

    Business and Transfer Taxation Business Taxation - VAT (Students' Handouts)

    Uploaded by

    Angelica Jem Ballesterol Carandang
    This document summarizes the rules for output VAT in the Philippines. It outlines the sources that are subject to output VAT, including the sale of goods, services, and real properties. It also discusses transactions that are deemed sales for VAT purposes, such as distributions to shareholders or transfers of goods not in the ordinary course of business. The VAT base and timing of reporting output VAT is provided for each type of transaction. Transactions not considered deemed sales are also listed.

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    © All Rights Reserved
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    BUSINESS AND TRANSFER TAXATION

    Business Taxation_VAT (Students’ Handouts)

    CHAPTER 7 THE REGULAR OUTPUT VAT

    Sources:

    A. Sale of goods
    *Unreasonably lower selling price – lower by more than 30% of the actual market value of the
    goods sold

    B. Sale of services
    *sales to SC or PWD

    C. Sale of properties
    Types of Sale of Properties Taxability
    Sale by a dealer, developer or lessor of real properties Vatable
    Sale of properties considered ordinary assets Vatable
    Sale of properties not in the ordinary course of business Exempt
    *gross selling price – consideration stated in the sales document or fair value of the property,
    whichever is higher

    *Sale of real property on installment plan


    -installment payment in the year of sale do not exceed 25% of the selling price
    *Sale of property by a realty dealer on a deferred payment basis
    -treated as cash sale
    **Interest and penalties actually or constructively received by the seller is likewise subject to
    VAT

    D. Transactions deemed sale


    -applies only if the property is an ordinary asset or vatable property
    a. Transfer, use or consumption not in the course of business of goods or properties
    originally intended for sale or for use in the course of business
    b. Distribution or transfer to:
    i. Shareholders or investors share in the profits of VAT-registered persons
    ii. Creditors in payment of debt or obligation
    c. Consignment of goods if actual sale is not made within 60days following the date such
    goods were consigned
    d. Retirement or cessation of business with respect to all goods on hand whether capital
    goods, stock in trade, supplies or materials, as of the date of cessation, whether or not the
    business is continued by the new owner or successor
    e. Cessation of status as a VAT-registered person

    Transactions not considered deemed sales


    A. Change of control of a corporation by the acquisition of the controlling interest of such
    corporation by another stockholder or group of stockholder
    B. Change in the trade or corporate name of the business
    C. Merger or consolidation of corporations

    Output Tax on Transactions Deemed Sales


    -based on the acquisition costs or the current market price of the goods or properties, whichever is
    lower

    **Deemed sale transactions apply to VAT Taxpayers only

    Summary of Output VAT Rules


    Source of Regular Output VAT VAT Base Timing of Reporting of Output VAT
    Gross selling price, but fair value if
    Sale of goods selling price is unreasonably lower In the month of sale
    Sale of services Gross receipts In the month collected
    In the month of sale or spread
    Gross selling price (Higher of fair throughout the collection period
    Sale of real properties value or selling price) under the installment method
    Transactions deemed sales Fair value of the deemed sale In the month deemed sold

    Based on R.B.Banggawan’s Business and Transfer Taxation (2019) Page 1 of 1

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