Sunday, November 2, 2014

Computation of Valued-Added Tax (VAT) Payable/ (Excess Input Tax)

In the Philippines, the “Tax Credit Approach” is adopted in computing the Vat Payable.  This means that VAT is imposed on the sale first called “Output Vat” and a tax credit is allowed or claimed on the VAT passed-on to his purchase cost of goods or services known as “Input Tax”.  The difference is called “VAT Payable” computed as Follows:

Sale of Goods:


Gross Sales

xx

Less:



Sales discounts
xx


Sales returns
xx


Net sales

xx

Add:



Excise tax, if any
xx
xx

Tax Base

xx

x vat rate

12%

Output Vat

xx

Less:  Input vat

(xx)

VAT Payable/ (Excess input tax)

xx

Sale of Services:


Cash received (actually and constructively)
xx

Deposits/Advance payments for future projects
xx

Materials charged for services
xx

Gross receipts
xx

x  vate rate
12%

Output Vat
xx

Less:  Input vat
(xx)

VAT Payable/ (Excess input tax)
xx

¥        Receivables (For Sale of Services), although earned, are not included in the computation of vat payable.
¥         



Dealer in Securities and Lending Investors:


Gross Selling Price
xx

Less: Acquisition cost of securities sold for the month or quarter
(xx)

Balance
xx

Add:  Other income or incidental income
xx

Gross receipts
xx

x  vate rate
12%

Output Vat
xx

Less:  Input vat
(xx)

VAT Payable
xx

No comments:

Post a Comment