Are you ready of the Consequence of Issuing Erroneous VAT Invoice in relation with Registration Procedures and Invoicing Requirements as per Bureau of Internal Revenue (BIR) Revenue Regulations (RR) No. 7-2024?
The Consequence of Issuing Erroneous VAT Invoice is stated in SECTION 3 (D) of RR No. 7-2024 to as follows:
D. Consequence of Issuing Erroneous VAT Invoice
1. All persons who are not VAT-registered and issued VAT invoice showing the person's TIN followed by the word VAT or showing the information under Section (B)(1) of these Regulations, shall, in addition to other percentage taxes be liable to (i) VAT imposed under Section 106 or 108 Tax Code, without the benefits of any input tax credit and (i) a fifty percent (50%) surcharge under Section 248 (B) of the Tax Code.
The VAT shall be recognized as input tax credit under Section 110 of the Tax Code, to the purchaser, buyer or receiver or erroneous VAT Invoice if all the required information under Section 3(B)(1) of these regulations are shown on the invoice.
2. A VAT-registered person or seller issuing a VAT Invoice for a VAT-Exempt transaction, but fails to display the term 'VAT-Exempt Sale" or clearly provide a breakdown of the VAT-Exempt Sale' on the invoice as provided for under Section 3(B)(2.4) of these Regulations, shall be liable for the VAT in Section 106 and 108 as if Section 109 of the Tax Code did not apply.
3. Lack of information required under Section 3(B) of these Regulations - If a VAT-registered person or seller issues a duly registered VAT Invoice to another VAT-registered person or buyer/purchaser with lacking information required under Section 3(B) of these Regulations, the seller or issuer shall be liable for non-compliance with the invoicing requirements. However, the VAT amount shall be still be allowed to be used as an input tax credit under Section 110 of the Tax Code, on the part of the purchaser or buyer, except if the lacking information pertains to any of the following:
a. Amount of Sales
b. VAT amount
c. Registered name and TIN as shown on the Bureau of Internal Revenue (BIR) Certificate of Registration of both purchaser or buyer and issuer or seller.
d. Description of goods or nature of services; and
e. Date of transaction.
Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202024/RR%20No.7-%202024.pdf of the full text of RR No. 7-2024.
