What is VAT Train Law?
A VAT is an indirect tax. Indirect tax means that you can pass on the taxes to the buyer, user, or consumer of the goods, products, or services received.
In VAT, any person, whether a franchise grantee, who in the course of trade or business, sells, barters, exchange, leases, goods or properties, render services shall impose a percentage tax. However, the tax base should be limited only to the value-added to such goods, properties or services by the seller, transferor, or lessor.
A Vat Registered Required to Pay Individual Tax under Train Law 2019?
Value-added tax is classified as a business tax. Business taxes are taxes imposed on any transactions related to transferring goods or properties and services to another with or without considerations.
While individual tax is an income tax, any person who earned or generated income must be taxed. Income taxes include doctors, lawyers, accountants, and ordinary people who are earning incomes.
Related Article: Practice of Profession Tax Train Law
Therefore, Value Added Tax is imposed on the sale of services or goods, properties while individual tax is a tax on the income received by the owner from his business.
What is vat threshold Philippines 2018 and tax rate?
A VAT is a consumption tax levied on the sale, barter, exchange, or lease of goods or properties and services in the Philippines and the importation of goods into the Philippines.
You will be subject to a value-added tax of 12% based on the gross sales or receipts if the expected sales are more than 3 million. These transactions include the sale of goods or commodities or selling of services. The tax base or the VAT threshold increases from 1,919,500 to 3,000,000 as of this year.
The tax base of the VAT is limited only to the value-added to such goods, properties, or services by the seller, transferor or lessor.
Who is Subject to Value Added Tax Train Law?
In General rule, any person is a VAT-registered and who is in the course of business or trade, sells, barters, exchange, leases goods or properties, renders services, and any person who imports goods shall be subject to the Value Added Tax (VAT).
Any person whose gross receipts or gross sales exceeds the threshold of Three Million Pesos (3,000,000) in one year shall be subject to VAT. If your gross sales or gross receipts are less than 3,000,000, you can either choose to pay a percentage tax or an 8% income tax rate. Read the latest updates on percentage under CREATE Law.
How To File and Pay Valued Added Tax in the Philippines?
Every Person shall file a quarterly return of the number of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter prescribed for each taxpayer.
VAT registered persons shall pay the value-added tax every month.
Is a VAT Exempt Person not Subject to Percentage Tax (3%)?
The person who is not a VAT-registered sales or receipts are exempt from payment of value-added tax but must pay a tax equivalent of Three percent (3%) of his gross quarterly sales or receipts.
However, It shall exempt any person engaged in cooperatives and self-employed individuals and professionals availing of the 8% tax on gross sales or receipts and other non-operating income from the payment of three percent (3%) additional percentage tax.
If you’re a newly hired in private or government, you must secure your TIN ID in the BIR. If you don’t have any idea what to bring and process. Make sure to read this before going to get your TIN Number. Here are 5 simple steps on how to get TIN ID.
CPA Topnotcher and passer! Here are the secrets: Top Ten Effective and Powerful tips that you should know to pass CPA board examinations.
Do you find it difficult to solve to compute the estate tax? This article provides five tips on how to compute the estate tax and prepare the estate tax returns in 2021.
Is sari-sari store in the Philippines subject to tax? Is there any way to exempt sari-sari store from business taxes and individual tax? Read this article to know how to register your business in the Bureau of Internal Revenue. You will learn also how to reduce taxes from your sari-sari store.
Under the new tax reform there are new de minimis thresholds and new ruling for the computation of income tax. There are list of benefits that remains the same as before and some were changed. There is also an illustrative and computation on how to compute income tax under this new de minimis thresholds.
How to fill up the annual inventory listing and the sworn statements. What information you need to learn each column.
Learn on how to register your business in Bureau of Internal Revenue as Barangay Micro Business Enterprises (BMBE).
Learn these 7 ways to earn money while ECQ/GCQ. Let me know which of those ways you want to start now!
Five (5) ways to reduce Philippine taxes in 2020. It includes also examples of how to do it.
Tax penalties and closure of business? 9 Facts You Should Know on Tax Mapping. You will also how tax mapping is conducted.
Updates about donor’s tax train law. You will learn the new donor’s tax rate for this year and the threshold subject to tax
Are you still having difficulties in studying Philippine Taxation? Don’t worry you’re not alone. It seems that studying taxation makes you sleep or headache. I can still remember when I studied taxation, it seems very hard to understand, the concepts, terms and even in how to solve the problems. Do you want to know how to enjoy studying taxation?
The fact is, even before the 2018 Tax Reform for Acceleration and Inclusion Law (TRAIN), everyone (including freelancers) was supposed to pay taxes. Whether online or offline, work as a freelancer, the BIR categorizes you as professional and self-employed. Find out how to register in the BIR as a freelancer 2021.
The vat threshold is three million pesos and will be subject to a twelve percent (12%) tax rate based on the annual gross sales. A person may not be subject to vat train law if the gross sales or receipts do not exceed the vat threshold Philippines 2018. Although the gross sales or receipts do not meet the threshold amount, you may still register your business as vat and claim the input tax. The vat threshold in the Philippines in 2018 increased from the previous vat threshold.
For more VAT updates, please read the BIR updates.
If you have questions regarding the vat updates, please don’t be shy to drop your comments below. Your thoughts are precious to us.
Learn More: Percentage Tax under CREATE LAW 2021