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VAT-Exempt Transactions
1. Sale or importation of agricultural and marine food products in their original state,
livestock and poultry of a kind generally used as, or yielding or producing foods for
human consumption; and breeding stock and genetic materials therefor.
Note: Products shall be considered in their original state even if they have undergone the
simple processes of preparation or preservation for the market, such as freezing, drying,
salting, broiling, roasting, smoking or stripping. Polished and/or husked rice, corn grits, raw
cane sugar and molasses, and ordinary salt shall be considered in their original state.
Note: Vehicles, vessels, aircrafts, machineries and other similar goods shall not fall within
this classification, thus, subject to taxes.
TRAIN repeals 54 out of 61 special laws with non-essential VAT exemptions, thereby making
the system fairer.
Purchases of senior citizens and persons with disabilities, however, will continue to be
exempt from VAT.
Housing that cost below P2 million will be exempt from VAT beginning 2021, while
medicines for diabetes, high cholesterol, and hypertension will be exempt beginning 2019.
Sale of agricultural cooperative are exempt from VAT provided the following elements
concur, viz:
1. The agricultural cooperative must be registered with the CDA; and
2. The cooperative must sell either exclusively to its members, or to members and
non-members, its produce, whether in its original state or processed form.
If the cooperative transacts only with members, all its sales are VAT-exempt.
If it transacts with both members and non-members, the product sold must be the
cooperative’s own produce to be VAT-exempt. (CIR v. United Cadiz Sugar, G.R. 209776
[2016])