Compliance Requirements

By : Abigail Ibaez

VAT Invoice and VAT OR

A VAT registered person shall issue a VAT Invoice for every sale, barter exchange of goods or properties, and VAT OR for every lease of goods or properties and for every sale, barter or exchange of service.

Invoicing Requirement
1. Statement that the seller is VAT Registered, followed by TIN 2. Total amount to be paid including : A. Amount of tax separate item B. VAT Exempt Sale C. Zero Rated Sale D. Mixed Sale Breakdown

Invoicing and Recording Deemed Sale

Deemed Transaction Invoicing and Recording

Transfer, use or consumption not in the course of business

Distribution to shareholders or to creditors in payment of debt

Memo entry
Invoice, and duly recorded in the subsidiary journal

Consignment of goods not returned within 60 days

Retirement from or cessation of business

Same as above
An inventory shall be prepared and submitted to the RDO not later than 30 days from the date of retirement

VAT Returns and Payment of VAT

Monthly VAT declaration and payment of VAT
Filing and payment, not later than 20 days following the end of the first two months in a quarter

Filing of Quarterly VAT Return and Payment of VAT 25 days following the close of the taxable quarter

Meaning taxable quarter

The quarter that is synchronized to the income tax quarter of the taxpayer (calendar quarter or fiscal quarter)

Quarterly returns includes the amount reflected in the monthly VAT declarations
Amounts for the first 2 months shall be included in the Quarterly VAT return, which reflects the cumulative figures for the taxable quarter.

Exercise
The following data for the current year are presented to you: Compute VAT Payable for the months of January to June
January February March April Output Tax 100,000 120,000 80,000 150,000 Input tax 80,000 110,000 120,000 100,000

May June

90,000 110,000

50,000 60,000

Substituted VAT Return

Lone Payor 1. In case of sale of goods or services by persons subject to 12% VAT, lone payor, the payee shall no longer be required to file the monthly VAT declaration and the quarterly returns. 2. The Monthly Remittance Return of VAT Withheld duly filed by the withholding agent payor serves as the substituted return of the payee seller with the lone payor

Substituted VAT Return

Payee with several payors still required to file the regular VAT return
They only file quarterly returns to consolidate their transactions, no more payments are made

Short Period Return

Final return of a person who retires from business