SSS will release 13th month pensions of pensioners in December

SSS announced last November 27, 2014 that SSS pensioners will receive 13th month pension this December 2014.

According to the Social Security System (SSS), the agency will release P6 billion for the 13th month pensions of nearly 1.9 million pensioners in December, as part of its annual year-end tradition that began in 1988.

Besides, children receiving dependent’s pensions are also entitled to the 13th month pension.

The 13th month pension of retirees and survivor pensioners is equal to the amount of their regular monthly pensions, while it excludes the carer’s allowance for disability pensioners.

SSS members or their beneficiaries can withdraw their December and 13th month pensions on a schedule based on the members’ contingency date for retirement, disability or death.

In fact, based on current SSS records, the average basic monthly pension amounts to P3,157.

Valuation of Contributions or Gifts Actually Paid or Made in Computing Taxable Income

The Revenue Memorandum Circular No. 86-2014 was issued to clarify the valuation of contributions or gifts actually paid or made in computing taxable income as part of substantiation requirement under Revenue Regulations No. 13-98.

In Section 8 of RR No. 13-98 reads in part of the substantiation requirements:

a. For Donors - Donors claiming donations and contributions to accredited non-stock, non-profit corporation/NGO as deductions from their taxable business income should submit evidences or proofs to the BIR by showing the Certificate/s of Donation and indicating therein the following:

i. Actual receipt by the accredited non-stock, non-profit corporation/NGO of the donation or contribution and the date of receipt thereof; and

ii. The a mount of the charitable donation or contribution, if in cash; if property, whether real or personal, the acquisition cost of the said property.

The information required in Section 8 of RR No. 13-98 shall be stated in a Certificate of Donation (BIR form 2322) following the format prescribed in Annex "A" of this Circular.

BIR Form 2322 consists of two parts - a donee certification and a donor's statement of values. The first page of BIR form 2322 is a certification by the donee that it has received on the date indicated the subject matter (i.e. cash or property) of the donation. It also provides a description of the properties donated. The donee certification must signed by an authorized representative of the donee organization.

The second page of BIR Form 2322 requires the donor to execute a statement which provides descriptions, acquisition costs and net book values of the properties donated as reflected in the financial statements of the donor. Moreover, the statement must be accompanied by deed of sale/bill of sale to prove the acquisition cost of the properties. The values declared by the donor in the statement shall still be subject to further confirmation by the Bureau as to its correctness and accuracy. The donor's statement must be signed by the donor or authorized representative.

Finally, under Section 235 of the National Internal Revenue ode of 1997, as amended, any provision of existing general or special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organizations or grantees of tax incentives shall be subject to examination by the Bureau for purposes of ascertaining compliance with the conditions under which they have been granted exemptions or tax incentives, and their tax liability, if any.

This Circular took effect immediately.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2086-2014.pdf of the full text of the circular.

Privileges and Minimum Registration and Tax Compliance Requirements of Marginal Income Earners

The Department of Finance has issued the Revenue Memorandum Circular No. 7-2014 to clarify and reiterate the registration as well as compliance requirements of Marginal Income Earners (MIE) pursuant to Revenue Regulations (RR) No. 7-2012.

MIE as defined in Section 3 of the same RR provides:

"Marginal Income Earner - shall refer to those individual whose business do not realize gross sales or receipts exceeding P100,000 in any 12-month period."

The individual referred to in that section is an individual not deriving compensation as an employee under an employer-employee relationship but who is self-employed and deriving gross sales or receipts not exceeding P100,000 in any 12-month period. Moreover, the activities of such MIE should be principally for subsistence or livelihood. The MIE, as herein defined, shall include but not limited to agricultural growers/producers (farmers/fishermen) selling directly to ultimate consumer, small sari-sari stores, small cariderias or "turo-turos", drivers/operators of a single unit tricycle, and such, but shall not include licensed professionals, consultants, artist, sales agents, brokers and other similarly situated, including all others whose income have been subjected to withholding tax.

The privileges and minimum registration and tax compliance requirements of MIE are as follows:

1. Registration with the Bureau using BIR Form 1901 with the following minimal documentary requirements:

i. Sworn Statement of Income for the year (Annex "A"); and

ii. NSO Certified or Local Civil Registry Birth Certificate;

2. Exemption from the payment of Annual Registration Fee (ARF);

3. Registration of Books of Accounts (e. g. two-column journal or other simplified books for daily expenses and revenues);

4. Issuance of registered principal receipt/sales invoices as prescribed under RMO 12-2013;

5. Filing and Payment of Annual Income Tax Return using BIR Form 1701 similar to any other self-employed individuals; and

6. Exemption from payment of business taxes (i. e. VAT or any Percentage Tax).

The BIR District Office, upon evaluation of application for registration, shall issue the Certificate of Registration and shall likewise ensure compliance with the registration of books of accounts, and issuance of Authority to Print for their Principal Receipts/Sales Invoices.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/82435RMC%20No%207-2014.pdf the full text of the circular.

Directors' Fees Received by Directors Who Are Not Employees of the Corporation are Not Subject to VAT or Percentage Tax and Business Tax

The Revenue Memorandum Circular No. 77-2008 was issued by the Bureau of Internal Revenue to clarify or reverse the law particularly the Revenue Memorandum Circular No. 34-2008 as the BIR ruled that directors receiving fees, per diems and allowances from corporations where they sit as members of the Board of Directors fall under the category of seller of services and, hence, liable to pay the 12% VAT or the 3% percentage tax.

In revisiting said issuance, it became evident or clear that the fees, per diems and allowances or honoraria being given to a director of a corporation are not derived from an economic or commercial activity that have been pursued "in the course of trade or business". Rather, said director's fees are remunerations paid in the exercise of a right of an owner in the management of a  corporation. Thus, not "in the course of trade or business" as contemplated under Section 105 of the Code. Such fees, per diems, allowances and other income received by the director as such, are therefore, exempt from the imposition of the 12% VAT or 3% percentage tax, notwithstanding that the said payments are not among those enumerated under Section 109 of the said Code.

Therefore, such income are exempt or not subject to from imposition of business tax.

Please refer ftp://ftp.bir.gov.ph/webadmin1/pdf/42932rmc%20no.%2077-2008.pdf of the full text of the Revenue Memorandum Circular No. 77-2008.

Filing/Submission of Hard Copy of the Certificate of Compensation Payment/Tax Withheld (BIR Form 2316)

Revenue Regulations No. 11-2013 was issued by the bureau in order to prescribe additional forms/documents to be filed by withholding agents in compliance with their duty to report income of their employees under the law.

It is stated in Section 2 of these regulations amending Section 2.83 of RR 2-98, as amended, is hereby further amended to read as follows:

"Sec. 2.83. Statements and Returns. - 

Section 2.83.1. Employees Withholding Statements (BIR Form No. 2316). - In general, every employer or other person who is required to deduct and withhold the tax on compensation including fringe benefits given to rank and file employees, shall furnish every employee from whose compensation taxes have been withheld the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) on or before January 31 of the succeeding calendar year, or if employment is terminated before the close of such calendar year, on the day on which the last payment of compensation is made. Failure to furnish the same shall be a ground for the mandatory audit of payor's income tax liabilities (including withholding tax) upon verified complaint of the payee.

Employers of MWEs are still required to issue BIR Form No. 2316 (June 2008 Encs version) to the MWEs on or before January 31 of the following year.

As a rule, the employer shall furnish each employee with the original and duplicate copies of BIR Form No. 2316 showing the name and address of the employer; employer's TIN; name and address of the employee; employee's TIN; amount of exemptions claimed, amount of premium payments on health and/or hospitalization insurance not exceeding P2,400.00, if any; the sum of compensation paid including the non-taxable benefits; the amount of statutory minimum wage received by MWEs; Overtime pay, holiday pay, night shift differential pay and hazard pay received by MWEs; the amount of tax due; the amount of tax withheld during the calendar year and such other information as may be required. The statement must be signed by both the employer or other authorized officer and the employee, and shall contain a written declaration that it is made under the penalties of perjury. If the employer is the Government of the Philippines, its political subdivision, agency or instrumentality or government-owned or controlled corporation, the statement shall be signed by the duly designated officer or employee.

However, in cases covered by subsituted filing, the employer shall furnish each employee with the original copy of BIR Form No. 2316 and file/submit to the BIR the duplicate copy not later than February 28 following the close of the calendar year.

     XXXX                   XXXX                    XXXX

It is also stated that under Section 250 of the Tax Code reading, "In the case of each dailure to file an information return, statement or list, or keep any record, or supply any information required by this Code or by the Commissioner on the date prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall, upon notice and demand by the Commissioner, be paid by the person failing to file keep or supply the same, one thousand pesos (P1,000) for each such failure: Provided, however, That the aggregate mount to be imposed for all such failures during a calendar year shall not exceed twenty-five thousand pesos (P25,000).

This regulations was took effect beginning with the calendar year 2013.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/71821RR%2011-2013.pdf of the full text of the regulations.

Tax Implications of Real Estate Service Practitioners (RESPs) Who Passed the Licensure Examinations and Who Did Not Pass or Did Not Take Up Licensure Examinations Given by the Real Estate Service

The Revenue Regulations No. 10-2013 was issued by the Department of Finance and promulgated to further amend portions of Revenue Regulations No. 2-98 as last amended by Revenue Regulations No. 30-2003, providing  for the inclusion of Real Estate Service pursuant to RA 9646, "The Real Estate Service Act of the Philippines" as among those professionals falling under Section 2.57.2(A)(1) of Revenue Regulations No. 2-98, as amended, subject to the 10% or 15%  creditable (expanded) withholding tax and to amend Section 2.57.2(G) of RR 14-2002 to include real estate practitioners who did not pass or did not take up licensure examinations given by the Real Estate Service.

Section 2 of these regulation stated that, Section 2.57.2(A)(1) of RR 2-98, as last amended by RR 30-2003, is hereby further amended to read as follows:

"Section 2.57.2. Income payment subject to creditable withholding tax and rates prescribed thereon. - xxx      xxx

(A) Professional fees, talent fees, etc., for services rendered by individuals. - On the gross professional, promotional and talent fees or any other form of remuneration for the services of the following individuals - Fifteen percent (15%), if the gross income for the current year exceeds P720,000; and Ten percent (10%), if otherwise: 

(1) Those individually engaged in the practice of profession or callings; xxx designers, real estate service practitioners (RESPs), (i. e. real estate consultants, real estate appraisers and real estate brokers) requiring government licensure examination given by the Real Estate Service pursuant to Republic Act No. 9646 and all other profession requiring government licensure examination regulated by the Professional Regulations Commission, Supreme Court, etc. xxx"

Moreover, Section 3 of these regulations stated also that Section 2.57.2(G) of RR 2-98, as last amended by RR 14-2002, is hereby further amended to read as follows:

"Section 2.57.2. - Income payment subject to creditable withholding tax and rates prescribed thereon. -          xxx               xxx

           xxx               xxx

(G) Income payment to certain brokers and agents. - On gross commissions of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and real estate service practitioners (RESPs), (i. e. real estate consultants, real appraisers and real estate brokers) who failed or did not take up the licensure examination given by and not registered with the Real Estate Service under the Professional Regulations Commission. - Ten percent (10%).

   xxx          xxx         xxx"

These regulations was took effect last June 1, 2013 and shall cover income payment to be paid or payable starting June 1, 2013 which are required to be remitted within the month of July, 2013.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/71818RR%2010-2013%20revised.pdf of the full text of the regulations.

Installment Sales / Deferred Payment (Real Property)

The sale of real property subject to vat shall either be in cash basis, installment basis, or deferred payment basis.

Installment Sales

·         If the initial payment do not exceed 25% of the selling price.  The seller or the real estate dealer shall be subject to vat on installment payments, inclusive of interest and penalties.

Deferred Payment

·         If the initial payment exceeds 25% of the selling price.  If the sale is on a deferred payment, the whole selling price shall be subject to vat (same treatment with cash basis).

Initial Payment

·         Pertain to ALL PAYMENTS which the seller receives on or before the execution of the instrument of sale, INCLUDING cash or property received, OTHER THAN the purchaser’s evidence of indebtedness, DURING THE CALENDAR YEAR when the real property was sold.

Installment received		Pxx
Add:
Interest	Pxx
Other charges	xx	xx
Tax base		Pxx

Upon full collection, if the zonal value or market value is higher than the total receipts or collections, the additional vat shall be paid accordingly.  (RMC 03-96);  RR 4-2007

Tax Treatment of Stock Option Plans and Other Option Plans

The Bureau of Internal Revenue just recently issued Revenue Memorandum Circular No. 79-2014 clarifying the Tax Treatment of Stock Option Plans and Other Option Plans.

A stock option is an option granted by a person, natural or juridical, to a person or entity entitling said person or entity to purchase shares of stocks of a corporation, which may or may not be the shares of stock of the grantor itself, at a specific price to be exercised at a specific date or period (hereinafter referred to as "Equity-settlement Option"). It may also occur even if no actual shares of stocks are transferred in a situation wherein a person or entity is given the right to obtain the difference between the actual fair market value of a shares and the fixed nominal value shares of stock set in the grant of the option, at a specific date or period, although no actual shares of stocks are transferred (hereinafter referred to as "Cash-setttlement Option"). The grant, sale, transfer, or exercise of the option may result to taxable events. 

They are "shares of stocks" as defined by Section 22 (L) of the National Internal Revenue Code of 1997, as amended, and are taxable as such.

TAX TREATMENT:

1. Grant of Option

In the event the Option was granted due to an employee-employer relationship, and where the grantor is the employer and the grantee is the employee, and no payment was received for the grant of the said option, on the year an option was granted, the grantor cannot claim deductions for the grant of the stock option. However, if the option was granted for a price, the full price of the option shall be considered capital gains, and shall be taxes as such.

Upon the issuance of the Option, the same is subject to a documentary stamp tax amounting to Seventy-five centavos (P0.75) on each Two Hundred pesos (P200), or fractional part thereof, of the par value of the stock subject of the option, or in the case of stock without par value the amount equivalent to twenty-five percent (25%) of the documentary stamp tax paid upon the original issue of the stock subject of the option, as provided for in Section 175 of the National Internal Revenue Code of 1997, as amended.

2. Sale or Transfer of Option

The sale, barter, or exchange of stock options is treated as a sale, barter, or exchange of shares of stock not listed on the stock exchange. Thus, any grant of an option for consideration, or transfer of the option is subject to capital gains tax imposed under Section 24 (C) of the NIRC. If the option was granted without any consideration, the cost base of the option for the purposes of computing capital gains shall be zero.

If the option is transferred by the grantee/subsequent owner without any consideration, the same shall be treated as a donation of shares of stock subject to donor's tax. The basis shall be the fair market value of the option at the time of the donation.

3. Exercise of Option

a. Equity-settlement Option. In equity-settled options, the grantee/ subsequent owner pays the exercise price to the grantor and the latter is obligated to deliver the stocks to the owner of the option.

In the event the option was granted by an employer involving the employer's own shares of stock or shares it owns, upon the exercise of the option by a rank-and-file employee, an additional compensation equivalent to the difference of the book value/fair market value of the shares, whichever, at time of the exercise of the stock option and the price fixed on the grant date, shall be recognized and subjected to income tax and consequently to withholding tax on compensation. however, if the employee which exercises the option occupies a supervisory or managerial position, the difference of the book value/fair market value of the shares, whichever is higher, at the time of the exercise of the stock option and the price fixed on the grant date, shall be treated as fringe benefit

subject to fringe benefit tax imposed under Section 33 of the National Internal Revenue Code of 1997, as amended (NIRC).

In the event the option was granted to a supplier of goods or services, the difference between the book value/fair market value of the shares, whichever is higher, at the time of the exercise of the stock option and the price fixed on the grant date, shall recognized as additional consideration for the services rendered or goods supplied by the said supplier, and shall be subject to the relevant withholding tax at source and other taxes applicable.

In the event the option was granted to a person, natural or juridical, who is not an employee, or a supplier of goods or services to the grantor, the difference between the book value/fair market value of the shares, whichever is higher, at the time of the exercise of the stock option and the price fixed on the grant date, shall be considered a donation, and shall be subject to donor's tax among others.

b. Cash-settlement Option

The above rules on Equity-settlement Option also applies in cases of Cash-settlement Options. Cash-settled options do not require the actual delivery of stocks. Instead, the market value, at the exercise date, of the stock is compared to the exercise, and the difference (if in a favorable direction) is paid by the grantor to the holder of the option.

C. REPORTORIAL REQUIREMENTS

1. Grant Option

Within 30 days from the grant of the option, the issuing corporation shall submit to the Revenue District Office where it is registered a statement under oath indicating the following:

i. Terms and Conditions of the stock option

ii. Names, TINs, positions of the grantees

iii. Book value, fair market value, par value of the shares subject of the option at the grant date

iv. Exercise price, exercise date and/or period

v. Taxes paid on the grant, if any

vi. Amount paid for the grant, if any.

2. Exercise of Option

During the exercise period, the issuing corporation shall file a report on or before the 10th day of the month following the month of exercise stating therein the following:

i. Exercise Date

ii. Names, TINs, positions of those who exercised the option

iii. Book value, fair market value, par value of the shares subject of the option at the exercise date/s

iv. Mode of settlement (i. e. cash, equity)

v. Taxes withheld in the exercise, if any.

vi. Fringe benefits tax paid, if any.

Sources of Input Tax

Sources of Input Tax:

Only purchases from Vat suppliers will give rise to input taxes.

 Input taxes may come from the following:

·         Domestic Purchases

·         Importation

·         Presumptive input tax

·         Transitional input tax

·         Standard input tax

1.    Examples of Input Taxes on DOMESTIC or importations include.

Ø  Goods for sale

Ø  Goods for conversion into finish product (including packaging materials).

Ø  Goods for use as supplies

Ø  Goods for use as materials supplied in the sale of services

Ø  Goods for use in trade or business for which depreciation or amortization is allowed.

Ø  Real properties for which Vat has actually been paid

Ø  Services for which Vat has actually been paid

Ø  Transactions deemed sale

Acquisition of CAPITAL GOODS (Depreciable Goods) by a Vat registered person (RR 16-2005)

·         Capital goods or properties

Ø  Refers to goods or properties with estimated useful life of greater than 1 year and which are treated as depreciable assets under the Tax Code, used directly or indirectly in the production or sale of taxable goods or services.

Ø  Depreciated or amortized for income tax purposes.

Ø  Acquired through local purchase or acquisition.

·         Construction in Progress

Ø  It is the cost of construction work which is not yet completed.

Ø  Not depreciated until the asset is placed in service.

Ø  Upon completion, construction in progress is reclassified and the reclassified asset is capitalized and depreciated.

RECOGNITION OF INPUT TAX
AGGREGATE Acquisition cost exceeds P1,000,000 exclusive of vat
	Life ≥5 years	Input tax shall be spread evenly for a period of 60 months to commence in the calendar month when capital good is acquired.
	Life < 5 years	Input Tax shall be spread over such useful life to commence in the calendar month when capital good is acquired.
	Life < 12 months	It is not a capital good subject to depreciation), the spreading of input tax over several months is not done.  The whole acquisition is cost is to be claimed in the month of acquisition.
	Construction in progress	It is a purchase of services.  Input taxes will be recognized in the month payment was made on the progress billing.  In the case where labor will be furnished by the contractor and materials will be purchased by the contractee from other suppliers, input taxes will be recognized on labor when payment is made on the progress billings while input taxes will be recognize on materials at the time the materials are purchased.

NOTE:  If the CAPITAL GOOD IS SOLD within the five (5) year period or prior to exhaustion of Input Vat thereon, the ENTIRE UNAMORTIZED INPUT TAX on the capital goods sold can be claimed as input tax credit during the month or quarter when the sale is made.

AGGREGATE Acquisition cost DOES NOT exceed P1,000,000 exclusive of vat
	Ø  The Total amount of Input Taxes will be allowable as credit against output tax in the month of acquisition

2.    IMPORTATION (for business use or sale locally)

                                      i.         IN GENERAL:

Ø  Based on the total value used by the Bureau of Customs in determining the tariff and customs duties (dutiable value) plus customs duties, excise taxes, if any, and other legitimate charges, prior to removal of goods from the customs custody.

Total value for tariff and customs duties		xxx
Add:
Customs duties	xxx
Excise Tax	xxx
Other charges prior to release**	xxx	xxx
Tax base		xxx
Tax rate		12%
VAT on importation		xxx

                                    ii.        Where the customs duties are determined on the basis of QUANTITY or VOLUME of Goods:

Ø  Based on landed cost which includes invoice cost, freight, insurance, customs duties, excise taxes, if any, and other legitimate charges, prior to removal of goods from the customs custody.

Total landed costs		xxx
Add:
Customs duties	xxx
Excise Tax	xxx
Other charges prior to release**	xxx	xxx
Tax base		xxx
Tax rate		12%
VAT on importation		xxx

Ø  The phrase “other charges prior to release of goods from custom’s custody” refers to legitimate expenses only”.

Ø  The excise tax shall form part of the tax base.

**EXAMPLE OF OTHER CHARGES/FEES PRIOR TO RELEASE

a.	Insurance	g.	Wharfage dues
b.	Freight	h.	Arrastre charges
c.	Postage	i.	Brokerage fees
d.	Commission	j.	Stamps
e.	Interest	k.	Processing fees
f.	Bank charge

                                   iii.        Transfer of goods by TAX EXEMPT persons

Ø  In the case of goods imported into the Philippines by VAT-exempt persons, entities or agencies which are subsequently sold, transferred or exchanged in the Philippines to non-exempt persons or entities, the latter shall be considered the importers thereof and shall be liable for the VAT due on such importation.

3.    PRESUMPTIVE 4% (On Sale of Goods or Properties)

Applicable to persons or firms engaged in:

Processing of:	Manufacturing  of:
·         Sardines	Ø  REFINED sugar
·         Mackerel	Ø  Cooking oil
·         milk	Ø  Packed noodle based instant meals

Ø  Basis:  Gross value in money of purchases of primary agricultural products used as inputs in processing or manufacturing

Ø  Rate:  4%

4.    TRANSITIONAL INPUT TAX

Newly VAT-registered person shall be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to 2% (two percent) of the value of such inventory (as of October 31, 2005) or the actual VAT paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax.

Ø  Persons who can avail

a)    Person who become liable to vat

b)    Persons who elect to be vat registered

Ø  Basis:

·         Beginning inventory of VAT subject GOODS, MATERIALS, and SUPPLIES excluding those that are vat exempt..

Ø  Transitional Input tax Allowed – the HIGHER between

·         2% of the vat subject beginning inventory value for income tax purposes; and

·         Actual vat paid on such beginning inventory.

Applicable ONLY on Vat PAID inventory.

How can the transitional input tax credit be applied?

Newly VAT-registered person shall be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to 2% (two percent) of the value of such inventory (as of October 31, 2005) or the actual VAT paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax.

5.    STANDARD INPUT TAX (5% Final VAT on GOCCs)

Not to be credited against output taxes arising from sales to Non-Government entities

The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and/or services taxed at twelve percent (12%) VAT pursuant to Sections 106 and 108 of the Tax Code, deduct and withhold a Final VAT due at the rate of five percent (5%) of the gross payment.

The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the seller.  The remaining seven percent (7%) effectively accounts for the standard input VAT for sales of goods or services to government or any of its political subdivisions, instrumentalities or agencies including GOCCs in lieu of the actual input VAT directly attributable or ratably apportioned to such sales.  Should actual input VAT attributable to sales to government exceeds seven percent (7%) of gross payments, the excess may form part of the sellers' expense or cost.  On the other hand, if actual input VAT attributable to sale to government is less than seven percent (7%) of gross payment, the difference must be closed to expense or cost.

The government or any of its political subdivisions, instrumentalities or agencies including GOCCs, as well as private corporation, individuals, estates and trusts, whether large or non-large taxpayers, shall withhold twelve percent (12%) VAT with respect to the following payments:

1.     Lease or use of properties or property rights owned by non-residents; and

2.     Other services rendered in the Philippines by non-residents.

REFUND OF INPUT TAX      (Vat registered Person)
v  Zero-rated Sales	ü  The input tax that may be subject of the claim shall exclude the portion of the input tax that has been applied against the output tax. ü  The application should be made within two (2) years after the close of the taxable quarter when the sales were made.
v  Unused Input Tax of Person who Retired or Ceased Business	ü  The taxpayer should apply for the issuance of tax credit certificate for any unused input tax which he may use in payment of his other internal revenue taxes.  He shall be entitled to a refund if he has no internal revenue tax liabilities. ü  The application should be made within two (2) years from the date of cancellation.
v  Period of Refund	ü  Shall be granted within 120 days from the date of submission of complete documents.
v  Manner of Giving Refund	ü  Refunds shall be made upon warrants drawn by the Commissioner of Internal Revenue or by his authorized representative without the necessity of being countersigned by the COA Chairman