Perfiles de apoyo de los cilindros hidráulicos

VAT is the easiest tax under the NIRC but the most technically worded provision of the law. Admitted ‘yan. Walang kokontra d’yan. Napakadali lang. Marunong kayong mag-add, mag-multiply? Walang division. Addition and multiplication at subtraction. Wala ditong division. Value added tax (VAT) is value added tax. Tax is added to the value. It is a form of indirect tax which is collected or imposed for:

1. Every/each sale of goods in the course of trade or business; 2. For each sale of service in the course of trade or business; and

3. For each importation of goods. Walang service ha. This time whether trade or business related or not.

It is a form of tax imposed on each sale of goods in connection with the trade or business, or each sale of service in connection with trade or business, or each importation of goods whether related to trade or business or not. These are the only three transactions covered by VAT.

Meaning of sale

What is the meaning of sale? Sale may refer to actual sale or barter or exchange. There is transfer of ownership. Sale of goods. Goods will even cover

real property. If you are engaged in development and sale of property, each sale of real property is considered sale of goods.

Sale of service. There is no employer-employee relationship involved. Services are rendered and for the services, you are paid.

Sale of service may cover lease, rentals. When there is a lease, there is sale of service.

Importation of goods. Galing sa ibang bansa at dadalhin sa loob ng Pilipinas. Kung gagamitin mo sa bahay mo ang iyong inimport, walang pakialam. Pagdating sa Pilipinas, importation of goods. Paano ini-import? Walang land. By air and sea. Pagdating niyan sa Bureau of Customs sa Pilipinas, that’s importation. Bago mo ilabas sa warehouse ng Bureau of Customs, magbabayad ka ng VAT. Kapag inilabas mo, kapag binenta mo, each sale, VATable. Kung kakainin mo, walang VAT. Pero may VAT ang importation.

Transactions deemed sale

Now, in sale of goods we have Transactions Deemed Sale (TDS). Transactions deemed sale is found in Section 106 (B). There is no actual sale but the goods are being sold and subjected to value added tax:

1. Transfer, use, consumption of goods intended originally for sale in the ordinary course of trade or business. Meron kang restaurant. Ang binebenta mo ay tapsilog. Araw-ayaw mong niluluto sa bahay mo. Kumuha ka ng tapsilog na stock. Deemed sold. Because the tapsilog is sold in the ordinary course of trade or business. Kinain mo, nilamon mo. Deemed sold. Period.

2. Transfer in favor of creditors. May utang ka na isang libong piso kay Mr. X. Wala kang pangbayad. Sabi mo kay Mr. X, “Kumain ka ng tapsilog araw- araw.” Ok sige kasi walang pambayad. Kumain si Mr. X. Bawat tapsilog na kinakain, deemed sold.

3. Transfer in favor of investors. Hindi mo maisauli ang investment at tubo. Ang sabi mo, “Kumain ka ng tapsilog equivalent to investment”. “Agree.” Everyday kumakain ng tapsilog. All tapsilogs eaten by the investor deemed sold.

4. Consignment of goods. Goods not sold within 60 days from the consignment, all are deemed sold on the 61st day.

5. Closure of establishment and all stocks remaining shall be deemed sold. Tapsilogan sinara mo. Titingnan ngayon kung ilang kilo ng baka ang nasa refrigerator. Ilang tapsilog ang kayang gawin para doon sa kilo ng baka? All are deemed sold.

Transactions deemed sale, not applicable in sale of service and importation This is how it’s done: Whatever kind of business that you have, if you have these five transactions, these are all deemed sold. VATable. Subjected to VAT. There are no transactions deemed sold in sale of service and importation. Ang importation kasi, ay either imported or hindi. Pag hindi ko dinala sa Pilipinas walang importation. Kapag nasa gitna pa ng dagat, wala pang importation. Kapag dumating sa Pilipinas, importation na ang tawag diyan. Kahit tumalon sa barko at nasa gitna pa lamang ang barko, imporatation. Importation starts from there. Now, what is the rate? 12% tax added to the value. Basis? Gross selling price for sale of goods. For the sale of service, the gross receipts. For importation of goods, the value or the amount determined by the Bureau of Customs.

Output and input tax

In addition to the 12%, we have what we call zero-rated and exempt. Sasabihin n’yo, ang tanga naman ng batas. I-multiply mo ang zero sa limang milyong piso, zero. Ang exempt wala ring VAT. So what is the difference? Later, I’ll inform you of the distinction between the two and which is more beneficial to the tax payer. So, you multiply by 12% and the buyer pays. So ito ang magandang sample: Tapsilog P100. Ibenenta mo sa iyong tindahan. Magkano selling price mo after adding the cost? P100. Buy tapsilog. Ikaw nagbayad ka ng P100 na selling price plus 12%, bigyan mo siya ng P112. The P12 is called the output tax from your end. And he (buyer), calls it input tax. Output tax is the value added tax on sales and input tax is the value added tax on purchases. OS-IP. Output for sales. Input for purchases.

Ikaw naman may output kang P12, ano naman ang posibleng mong input? Bumili ka ng gasolina, nagbayad ka ng kuryente. Pag naggagasolina ka, may tax dun. Bumili ka ng gasul may VAT. Nagbayad ka ng kuryente may VAT. May telepono ka, may VAT. Lahat ng purchases mo, 12% ang binabayad mo. Ang tawag doon sa 12% na binayaran mo ay ‘Input’. Ang tawag doon sa binenta mo, ‘Output.’ So ikaw may output na 12%, ikaw ay may input na 12%. Kinain mo si tapsilog. Walang silbi sa iyo si Input. Bakit? Nilamon mo. Walang silbi sa iyo because you are not engaged in trade or business. And being an end-user, it is

not applicable to you except that it adds up your expense. Let us assume that you are engaged in delivery of tapsilog to government offices. So you ordered for 1 tapsilog. My business is delivery of tapsilog. Anong mga purchases mo? Gasoline pag ikaw ay naglalakbay. Maraming purchases. Tama? So itong tapsilog na binili nya ng P112 at nagcompute ka. Per tapsilog is now P150, cost pa lang sa iyo. Kayo namili ng tapsilog sa kanya, ikaw nagparasyon ka. P150 may tubo na siya diyan. Binenta sa iyo plus 12%. Magkano? P150 x 12% = P168. P168 ang tapsilog. Magkano output mo? P18. Output is P18. Magkano input mo? P12. P18 output less input of P12 is P6. Go to BIR remit the P6 that is VAT payable.

Remedy in case input tax is more than output tax

If marami kang purchases, ibig sabihin your input is more that your sales, if your input is more than your output, marami kang pinamili kesa nabenta, what will happen? The excess input you go to BIR, ask for refund. But of course, money will not be given to you. It will form part of credit, either tax credit for the succeeding quarter because VAT is computed on a quarterly basis but paid on a monthly basis. Computed quarterly but remitted to BIR monthly. Ganun ‘yan. So ikaw, if you have excess input, you may credit for the succeeding quarter, or if at the end of the year, if you still have excess input, you will credit it with your other obligations such as income tax due from your business.

Excess output is VAT payable

This is how you do it. Input-output, input-output. Ganun lang ito nang ganun. And then you remit monthly to BIR. If you have excess output, that is VAT payable. Pay to BIR. Hindi ka nagbabayad sa BIR bawat benta. Kokompyutin mo ‘yan on a quarterly basis and you remit on a monthly basis, and if at the end of the year you have excess output, meaning, you have more sales than purchases, then pay to BIR. But if you have excess input, meaning you have more purchases than sales, then you also go to BIR and request for refund or credit, the same with your other tax obligations. So as you are moving along the taxable period, you may credit it for the succeeding quarter. Very simple and Value Added Tax. Kaya sabi ko sa inyo, multiplication, addition, subtraction. Walang division na ginagamit. So ‘yan ang ginagawa n’yo.

Relevance of input and output tax to income tax

How relevant is this to income tax? Very relevant! When you compute for your gross income, the gross income of the taxpayer who is engaged in trade or business reflects your revenue from your operation. Your output tax represents the 12% of your sales, and therefore, that should jive with gross income. Pag iyan ay

Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang

hindi nag-match with the gross income doon sa output tax mo, you are doing something.

Now, your input tax represents your expenses, purchases in your trade or business, and therefore, the 12% input tax should also coincide with your allowable deductions in the form of expenses. Anu-ano ‘yung mga expenses mo? Reasonable allowance for wages. Wala ‘yan VAT. Pag nagbayad ka ng wage, walang VAT. Reasonable allowance for utility: PLDT, Merealco, MWSS, gasolina. Kapag bumili ka ng may VAT, may input tax ka na 12%. Dapat ‘yun mag-match sa deduction mo. Nagbayad ka ng renta sa lupa doon sa parlor. That’s a sale of service. So there’s VAT. Input tax ang binayaran mo. Purchases mo ‘yan eh. So dapat ang input tax mo na kini-claim versus the output tax, mag-match doon sa expenses mo. Tinitingnan ‘yan ng BIR. Income tax is paid the following year. Ang bayaran is the following year. The requirement for VAT is quarterly. You compute but you remit monthly. So from January to December, if you remit in January, BIR has advance notice of how much your sales are for the month of January. When you remit in February, March, April, May hanggang December, BIR has an idea how much your gross sales are, which will represent your gross income. Advance notice ‘yan sa BIR. Such that, kapag nagbayad ka the following year ng income tax mo at hindi nag-match doon sa na-file mo sa VAT return, patay ka. You are doing something. ‘Yan ang relationship niyan. Hindi pwedeng maghiwalay. Kailangan laging magkabuntot. VAT is a tax on business. So this will match up with your gross income on the business that you have. ‘Yun ang sinasabi nating relationship ng income and VAT.

Excess input tax may be credited and applied to VAT liabilites in succeeding quarter or to other tax liabilities

Now, output less input. Grugrupuhin mo sa isang quarter, ano ba ng aking nabenta na may VAT? Kunin sa isang quarter diyan, ano ba ang pinamili ko na may VAT? Kunin. I-match n’yo. Pag sobra ang output, go to BIR, VAT payable. Pag ang sobra ay input, punta ka sa BIR, refund. Miss Kim Ynarez. Or hindi kaya as you are moving along the quarters of the year, i-credit mo na agad ang excess input. Pwede. Kapag sa dulo nag-excess ka, “Oi Ms. Kim Ynarez, i-aaplly ko po ito sa aking income tax due. Sayang naman. Pwede ba?” Pwede! ‘Yun ang tax credit. ‘Yan ang mga pwedeng mangyari sa inyo. Mahirap ba ang VAT? Hindi. Napakadali.

Zero-rated transactions

Zero-rated transactions. Anong nakasulat? Section 106. What are the zero- rated transactions? ‘Yan ay hindi ko ini-expect na memoryahin ninyo. Ano ba ang “zero–rated transaction?” Tingnan ninyo ang mga examples diyan.

Export sale

Kapag ikaw ay nag-iimport, times 12%. Kapag ikaw ay naglabas, times 0%. Niloloko tayo. Ay, bakit imumultiply pa ng 0%? Kapag zero-rated kasi, kaya ginagawang zero-rated, may benepisyo kasi ang gobyerno. Kapag nag-export ka ng tubig, ang bayad niya padadaanin sa foreign currency ang bayad at pinadadaan sa bangko. Wala namang nagbabayad na pinadadala sa LBC. So it goes through the bank and it is in foreign currency.

Benefits of exportation

As you bring water outside, there are two benefits to the government. 1. foreing currency reserve is increased; and

2. we promote locally manufactured products

Comparing it to an importation wherein we destroy locally manufactured products because of the dating ng mga produktong imported. And secondly, kapag tayo ay nagbabayad, ang ating foreign currency reserve ay nababawasan.

Sale of gold bars

Nagbenta ng ginto sa Bangko Sentral ng Pilipinas. Dumadami ang ating reserve para sa paglililok ng salapi. Kailangan natin ‘yan. So kapag nagbenta ka, may benepisyo ang gobyerno. Dahil nagbigay ka ng benepisyo sa gobyerno, sa halip na times 12%, times 0%.

VAT on sale of service

Now we go to Section 108. Sale of service. Madami din ‘yan. Sample na lang natin. Walang zero-rated sa importation, ha? Wala. Zero-rated lang sa sale of goods and service. Sa sale of service. Noong unang panahon, 10 years ago, ‘yung repacking, ‘yung sachet, dito ‘yun nauso sa Asia. So mga 10-15 years ago, meron

bagong industriya sa Pilipinas. Ang kanyang ginagawa ay mag-repack. Sa ibang bansa, sa US halimbawa, mahal ang service na iyan. So ang ginagawa ng mga producer ng toothpaste sa US, ipadadala sa Pilipinas ng naka balde-balde na toothpaste. Ang trabaho sa Pilipinas mag-repack. Pagka-repack, naka-sachet, ibabalot sa kahon ilalabas ulit ng bansa. Ang bayad sa Pilipinas for the service ay foreign currency coursed through the BSP. ‘Yun nanaman. Nakinabang nanaman ang Pilipinas. ‘Yan nanaman ang halimbawa ng times 0%.

Effectively zero-rated sales

Ang isang effectively zero-rated ay hindi talaga zero-rated. Kaya lang, upon the recommendation of the Secretary of Finance, the President may declare a particular transaction as effectively zero-rated. Perfect example are the industries within the economic zones. The transations therein are not exactly zero- rated. If you look at the Code, they are treated as effectively zero-rated because of certain conditions.

Distinctions between zero-rated transactions and exempt transactions

Now, how do we distinguish zero-rated from exempt. These are the distinctions: In zero-rated, the transaction is not subject to VAT at all stages and the input tax is allowed to be credited against the output tax. Exempt transactions are not subject to VAT only at a particular stage and the input tax is not allowed to be credited.

Let us look at Section 109. ‘Yan ang mga exempt. These transactions are not subject to VAT. Only at a particular stage. After that stage, provided in the law, VATable na. Unlike zero-rated na kahit anong stage, times 0%. Tingnan natin ang Section 109.

I. Sale or importation of agricultural and marine food products in their original state

Number 1. Mr. A. May baboy siya sa bakuran. Binili ito ng alive. VATable? Exempt. Si baboy na oink-oink kinatay niya. Itininda niya sa palengke. Pork chop, liempo laman-loob, pigi, ulo. Nakalatag. Binili. Si dead na baboy na chop-chop na. VATable? Exempt. Ang natira na part ng baboy na hindi nabenta, ginawa niyang tocino, BBQ flavor at longganisa. Isinabit sa palengke. Binili ang longganisa. VATable? No. Exempt. Nakasulat. Binili ang porkchop, prinito at sinerve with itlog and kamatis, porksilog. Kinain mo sa restaurant niya. VATable. Kapag niluto mo, VATable. Si longganisa ganun din. Binili mo sa kanya. Exempt. Kapag niluto mo si longganisa, binenta mo sa restaurant. Binili mo, kinain mo. VATable.

II. Sale of residential unit, low-cost housing unit

Real estate developer. Low-cost housing unit. You buy from him. VATable? Exempt. Ikaw, bumili ka ng lima sa kanya. Buy and sell ka of low-cost housing unit. Ikaw tumira ka. When you buy from him 5 units, VATable? Exempt. Now the housing units are in your possession. Tinirahan mo. Binenta mo kay Mr. Blue. VATable? No. You are not engaged in trade or business. May tax ka? 6% CGT. Can you be exempt? Yes, if all the requisites for exemption are present.

Ikaw naman bumili ka ng lima sa kanya all low-cost housing units, VATable? Exempt. 109. You sell the 5 units. VATable? Yes. Subject to CGT? No, because this is an ordinary asset from your end.

III. Rentals of residential unit

Lease of residential units when the rental do not exceed P10,000. Owner of 10 units leases to 10 lessees. Rental from each is P9,999.99. VATable? Exempt. This is exempt under the Tax Code. When you sell the apartment units, VATable? Yes. If the rent is P10,500. VATable? Yes. Nandoon kasi ‘yan sa mga examples niya. Kaya kailangan basahin ninyo para lang alam ninyo kung hanggang saan ba ang exempt at ang hindi. Pwede din kuwentong kutsero katulad ng ginagawa natin kasi pagminemorize, masisisra ang ulo natin. Kasi yung example ko, kuwento ‘yan ng codal para makita niyo. Hindi yung codal lang ang iniintindi. So ano pa ang stage ang exempt?

Let’s go to Letter V. Basahin ninyo ang letter V. Ito ang example niyan, ha? Ang tindahan ko ay tindahan ng kandila. Ang gross sales ko ay P1,000,000. VATable? Hindi. Kasi ang nakasulat diyan, wala sa listahahn at hindi nag-exceed sa P1,500,000 ang gross sales. Exempt. Am I liable for tax? Yes. If you are exempt under letter V, exempt ka sa VAT pero ang ii-impose sa iyo ay percentage tax equivalent to 3% of your gross sales.

Ang tindahan ko ay tindahan ng kandila. Ang gross sales ko ay P1,600,000. VATable? Yes. Hindi na ako exempt.

Uulitin natin para makita ninyo ang Letter V. Unang sinabi ko ay ang tindahan ko ay tindahan ng kandila. Ang gross sales ko walang P1,500,000. VATable? Exempt. ‘Yan ang letter V. Sumunod, ang tindahahn ko ay tindahan ng kandila. Ang gross sales ko ay P3,000,000. VATable? Oo. Hndi na exempt.

May piggery ako. Baboy. Ang baboy ko 20,000. I sold the 20,000 baboy at P10,000 each. Magkano yan? P2,000,000. VATable? Yes or no? Nakalagay sa

Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang

109. Kanina, kapag nagbaneta ka ng baboy, exempt. Ngayon gawin nating 20,000 baboy, isang libo bawat isa. Magkano yun? P2,000,000. Lagpas P1,500,000. VATable? Yes or no? Bakit ‘No’? Mentioned in the preceeding paragraph. So kung nasa listahan ng A-U, exempt. Basta ‘yan ang dinidescribbe niyong sale. Kapag wala sa listahahn ng A-U at hindi nag-exceed ng P1,500,000, exempt. Ano ang konklusyon? Pag wala sa listahan ng A-U at nagexceed ng P1,500,000, VATable. Kaya ang tindahahn ko ng kandila ng P3,000,000 ang gross sales ay VATable.