TAX REFORM FOR

ACCELERATION AND
INCLUSION (TRAIN) LAW on VAT
Lesson 1

Marinor A. Gallardo, CPA, Ph.D.

Lecturer
 OUTLINE – Session I
I. Vision – Mission of President Duterte's
Administration
II. Core Values
III. Goal of TRAIN Law (R.A. No. 10963)
IV. Taxpayers by Income Bracket
V. Branches of the Government: An
Overview
VI. Department of Finance
VII. Revisiting BIR
 OUTLINE – Session I

VIII.Government Revenue Sources

IX. Taxes and Non-Tax Revenues
X. National Internal Revenue Code
XI. Types of Administrative Tax Authorities
XII. Disagreement between BIR and
Taxpayers
XIII. Sources of Tax Law
XIV. Review of Session I
 VISION STATEMENT OF
PRESIDENT DUTERTE'S
ADMINISTRATION

> Embodiment of the Filipino people's

highest aspiration for a government;
> promotion and sustainability of
environment of peace and security;
> growth, public accountability,
genuine compassion and meaningful
change towards a just social order
(Office of the President; op-proper.gov.ph)
MISSION STATEMENT

>The Office of the President shall be

fully responsive to the specific needs
and requirements of the President as
Head of the State and Government,
Chief Executive and Commander in
Chief.
(Office of the President; op-proper.gov.ph)
 CORE VALUES OF PRESIDENT
DUTERTE'S ADMINISTRATION
For the COUNTRY:

> Love; and

> Service (Sincerity, Excellence,
Respect/Responsiveness/Resourcefulness,
Vigilance/Virtue, Integrity/Innovation,
Competence/Compassion and
Efficiency/Expertise

(Office of the President; op-proper.gov.ph)

 TAX REFORM FOR
ACCELERATION AND INCLUSION
(TRAIN LAW)
> Reform Initiative for
poverty – reduction and
economic development
> to creation of a just,
simple and more
effective system of tax
collection (www.dof.gov.ph)
BIR under the Umbrella of DOF

DOF

BIR
 BUREAU OF INTERNAL REVENUE
(BIR)

> Created by Commonwealth Act

No. 466, approved by the National
Assembly on June 15, 1939, effective
July 1, 1939.

> MISSION: To collect taxes efficiently

and effectively, for and at the least cost
to the government.

> BIR collection accounts for more than 60% of the national
Government's total revenues.

(www.bir.gov.ph)
 GOVERNMENT REVENUES
>Includes all amounts
of money received from
sources outside the
government entity
➢Acquires the resources
to finance its expenditures
through a number of
different methods.
 GOVERNMENT REVENUES
SOURCES
A. TAX REVENUES

B. NON-TAX REVENUES – ex. Grants,

Marcos Wealth, BT income, CARP
 GOVERNMENT REVENUES
SOURCES
A.
 TAX REVENUES
> compulsory payments
associated with certain
activities
> most important source of
government revenue;
> are imposed to support the
government;
> in exchange for the general
advantages and protection
afforded by the government
to the taxpayer and his or her
property
 TAXATION

>Directed against right/

persons, property
>Purpose: raise revenue to
support the government
Taxpayer:
> gives money : tax
> in return for service and
protection

(www.bir.gov.ph)
 2 TYPES OF ADMINISTRATIVE TAX
AUTHORITIES
1.REVENUE REGULATIONS -are
administrative interpretations of the tax
statutes enacted by Congress.

2. REVENUE RULINGS -
>are more detailed;
> explains the results of
very specific transactions
(www.bir.gov.ph)
DISAGREEMENT BETWEEN
BIR & TAXPAYERS

> Final decision will rest on the Judiciary

on what is the correct application of the
tax statutes to specific transactions;
> By virtue of Republic Act No. 1125 - Court of Tax
Appeals (CTA) was created on June 16, 1954
>By virtue of R.A. 9282, CTA's jurisdiction expanded;
It includes not only civil tax cases but also cases
that are criminal in nature, as well as local tax
cases, property taxes and final collection of taxes.

(www.cta.judiciary.gov.ph)
SOURCES OF TAX LAWS

>Constitution;
> Statutes and Presidential
Decrees;
> Revenue Regulations by
DOF;
> Rulings issued by BIR Commissioner
and opinions by the Secretary of
Justice;
>Decisions of the Supreme Court and
Court of Tax Appeals
SOURCES OF TAX LAWS
>Provincial, city,
municipal and barangay
ordinances subject to
limitations set forth in the
Local Government;

>Treaties or international
agreements
 Review of Session I
➢Vision Mission of the President for the
country
➢Core Value: Love and service to the
Country
➢TRAIN LAW (R.A. 10963), effective
January 01, 2018
➢3 Branches of the Government
➢Legislative Branch – creates the law;
Executive Branch – implements the
law; and
Judiciary – interprets the law
OUTLINE : SESSION II
I. Definition of Terms:
business, taxes
II. Requisites of “business”
III. Kinds of Taxes
IV. Types of Business Taxes
V. VAT Comparison with
Other Asian Countries
OUTLINE : SESSION II
VI. Gross Receipts/
Gross Sales under
RR 8-2018
VII. Highlights of VAT under
TRAIN Law
VIII. Definition and Sources
of Output Tax
IX. Definition and Sources of Input Tax
X. Input Tax on Capital Goods
OUTLINE : SESSION II

XI. Withholding Taxes

Definition
XII. Types of Withholding
Taxes and Tax base
XIII. ACTUAL CASES
XIV. REVIEW OF SESSION II
 DEFINITION OF TERMS

A.
A. “Business” or in the “course
of business”
-
>Sec. 105 of NIRC
Requisites:
> It should be used in the
commercial or
economic entity; or
> There should be
regularity in the activity
 DEFINITION OF TERMS

B. Taxes
- enforced proportional
contributions
-from persons and property
-levied by the lawmaking
body
-sovereignty
-for the support of all
government and public
needs
 KINDS OF TAXES

1. DIRECT TAX
>the economic unit
that pays the tax to
the government and
carries the burden of
it.
ex. Income tax,
estate tax & donor’s
tax
 KINDS OF TAXES

1. INDIRECT TAX
>the economic unit does
not carry the burden of
the tax
➢ This can be shifted to
the consumers
➢ ex. VAT, percentage
taxes, excise tax
TYPES OF BUSINESS TAXES
 COMPARATIVE DATA
ON VAT IN ASIA
COUNTRY
Value added tax (VAT)

CAMBODIA 10%
CHINA 17%
HONG KONG
INDIA State VAT 12.5%
INDONESIA 10%
JAPAN 5%
S. KOREA 10%
LAOS Business turnover tax on sales (VAT) 10%

MALAYSIA Sales tax 10%

PHILIPPINES 12%
SINGAPORE 7%
THAILAND 7%
VIETNAM 10%

www.business-in-asia.com
 GROSS RECEIPTS
(Revenue Regulations No. 8-2018
R.A. 10963 TRAIN LAW Sec. 2)
➢Refers to the total amount of money or
its equivalent
➢representing the contract price,
compensation, service fee, rental or
royalty
➢ including the amount charged for
materials supplied with the services and
 GROSS RECEIPTS
(Revenue Regulations No. 8-2018
R.A. 10963 TRAIN LAW Sec. 2
➢deposits and advance
payments actually or
constructively received
during the taxable
period
➢for the services
performed or to be
performed for another
person
 GROSS RECEIPTS
(Revenue Regulations No. 8-2018
R.A. 10963 TRAIN LAW Sec. 2)
➢except returnable
security deposits for the
purposes of these
regulations.
➢ In the case of VAT
taxpayer, this shall
exclude the VAT
component.
 GROSS SALES
(Revenue Regulations No. 8-2018
R.A. 10963 TRAIN LAW Sec. 2 )
➢Refer to the total
sales transactions
net of VAT, if
applicable, reported
during the taxable
period, without any
deduction…
 COMPARISON

PREVIOUS TAX
RULES TRAIN
A. VAT Threshold A. VAT Threshold
- exceeds - P3,000,000
P1,919,500 (RR No. 8-2018)
(RR16-2011) .
 COMPARISON

PREVIOUS TAX
RULES TRAIN
A. VAT Threshold A. VAT Threshold
- exceeds P1,919,500 - RR No. 8-2018: A VAT
(RR16-2011) taxpayer who did not
exceed the VAT threshold
within the immediately
preceding 3 yrs, may opt
to be a not – VAT
taxpayer & avail of 5% or
10% income tax rate
option (RR 11-2018).
 COMPARISON

PREVIOUS TAX
RULES TRAIN
A. VAT Threshold A. VAT Threshold
- exceeds P1,919,500 -She/he shall update
(RR16-2011) the registration
records on or before
the first quarter of a
taxable year to reflect
the change in
registration.
 COMPARISON

PREVIOUS TAX
RULES TRAIN
A. VAT Threshold A. VAT Threshold
- exceeds P1,919,500 - However, he shall be
(RR16-2011) liable for VAT as long
as there is no update
of registration and VAT
registered invoices/
receipts are issued...
(RR No. 8-2018)
 HIGHLIGHTS OF VAT :
SALE OF RESIDENTIAL LOT
OLD LAW TRAIN (2018 – 2020)

➢The amount to be The amount to be

considered as VAT- considered as VAT-
EXEMPT in the sale EXEMPT in the sale
of residential lot is of residential lot is
P1,919,500. P3,000,000.
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

➢The amount to be The amount to be
considered as VAT- considered as VAT-
EXEMPT in the sale EXEMPT in the sale
of house & lot and of house & lot and
other residential other residential
dwellings is dwellings is
P3,199,200. P2,500,000.
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

➢The amount to be
considered as VAT-
EXEMPT in the sale
of low-cost and > RETAINED
socialized housing is
Low-cost P1.7M to
P3M Socialized:
P450,000 & below.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE OF SERVICES
➢Sec. 106 (A) (2) EXPORT SALES
subject to 0 rate include the ff:
1. Sale & actual shipment of > RETAINED
goods to a foreign country
irrespective of arrangement, paid
for in acceptable foreign
currency & accounted for in
accordance with BSP RULES.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE OF SERVICES
➢Sec. 106 (A) (2) EXPORT SALES
subject to 0 rate include the ff:
2. Sale of raw materials or > SAME ITEM NO. 3/
packaging materials to a PARAGRAPH 3
nonresident buyer for delivery to
local export – oriented enterprise
to be used for manufacturing or
repacking in the Phil. and paid for
in acceptable foreign currency &
accounted for in accordance
with BSP rules.
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

ON ZERO-RATED SALE
OF SERVICES ➢SAME ITEM NO. 3/
PARAGRAPH 3
➢Sec. 106 (A) (2)
EXPORT SALES subject ➢Item No. 2 Sec. 106 A
to 0 rate include the ff: 2. Sale & Delivery of goods to:
i) Registered enterprises w/in a
separate customs territory as
provided under special laws.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE 2. Sale & Delivery of goods
OF SERVICES to:
➢Sec. 106 (A) (2) ii) Registered enterprises
EXPORT SALES subject w/in a tourism enterprise
to 0 rate include the ff:
zones as declared by the
Tourism Infrastructure &
Enterprise Zone Authority
(TIEZA).
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE OF
SERVICES
➢Sec. 106 (A) (2) EXPORT SALES
subject to 0 rate include the ff:
3. Sale of raw materials or retained (item no.
packaging materials to export- 4/ paragraph 4)
oriented enterprise whose export
sales exceed 70% of total annual
production.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE
OF SERVICES
➢Sec. 106 (A) (2)
EXPORT SALES subject
to 0 rate include the ff:
4. Sale of gold to the 4. EXEMPT ( SEC. 109)
BSP
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE OF
SERVICES
➢Sec. 106 (A) (2) EXPORT SALES
subject to 0 rate include the ff:
5. Those considered as
4. Retained item
export sales under EO 226 5/par.5
otherwise known as
Omnibus Invetment Code of
1987, and other special law.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE OF 6. RETAINED …
SERVICES addendum
➢Sec. 106 (A) (2) EXPORT
Provided, that the goods
SALES subject to 0 rate
include the ff: & supplies,
equipment and fuel
6.The sale of goods,
supplies, equipment and
shall be used for
fuel to persons engaged in international shipping
international shipping or or air transport
int’l. air transport operations. operations.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED SALE OF
SERVICES
➢Sec. 108 (B) ZERO –RATED
SALES OF SERVICES INCLUDE: RETAINED …
4. Services rendered to Provided, that these
persons engaged in int’l services shall be
shipping or int’l air exclusive for int’l
transport operations, shipping or air
including leases of transport operations.
property for use thereof.
 HIGHLIGHTS OF VAT :

TRAIN (2018 –
OLD LAW 2020)
ON ZERO-RATED 8. Services rendered to:
SALE OF SERVICES
i) Registered enterprises
➢Sec. 108 (B) ZERO
w/in a separate customs
–RATED SALES OF
SERVICES INCLUDE: territory as provided under
special law.
8. None in NIRC.
ii) Registered enterprise w/in
tourism enterprise zones
as declare by the TIEZA
under RA 9583
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

ON VAT EXEMPTIONS The ff sectors will keep
➢Sec. 109 VAT their vat exemptions:
EXEMPTIONS.
- Agricultural
cooperatives;
- Gross receipts from
lending activities by
credit or multipurpose
cooperatives
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

ON VAT EXEMPTIONS The ff sectors will keep their
➢Sec. 109 VAT vat exemptions:
EXEMPTIONS. - Sales by non-agricultural non-
electric and non-credit
cooperatives duly registered
with the Cooperatives
Development Authority
provided that the share of the
capital contribution of each
member does not exceed
P15,000
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

ON VAT EXEMPTIONS The ff sectors will keep
➢Sec. 109 VAT their vat exemptions:
EXEMPTIONS. - D. Importation of
d. Amended professional instruments and
implements, tools of trade,
- Importation of
occupation or employment
professional instruments,
wearing apparel, domestic
etc. belonging to
animals & personal &
persons coming to settle
household effects,
in the Phil., for their
belonging to persons
personal use…
coming to settle in the
 H HIGHLIGHTS OF VAT
TRAIN LAW (2018-2019)
Philippines or Filipinos or their families and
descendants who are now residents or
citizens of other countries, such parties
are herein referred to as Overseas
Filipinos, in quantities and of class
suitable to the profession, rank or position
of the persons importing said items, for
their own use and not for barter or sale,
accompanying such persons, or arriving
within a reasonable time.
 H HIGHLIGHTS OF VAT
TRAIN LAW (2018-2019)

➢Vehicles, vessels, aircrafts,

machineries and other similar
goods shall not fall under
EXEMPTION ;
➢SUBJECT TO VAT
 HIGHLIGHTS OF VAT :

OLD LAW TRAIN (2018 – 2020)

ON VAT EXEMPTIONS The ff sectors will keep
➢Sec. 109 Q their vat exemptions:
➢ LEASE OF RESIDENTIAL ➢ AMOUNT IS INCREASED TO
UNIT WITH A MONTHLY P15,000
RENTAL NOT EXCEEDING ➢ W) Sale or lease of goods &
P12,800.00. services to senior citizens
and persons with disability,
as provided under RA 9994
% 10754
 H HIGHLIGHTS OF VAT
TRAIN LAW (2018-2019)
VAT EXEMPT
x) Transfer of property pursuant to
Sec. 40 (c) (2) of the NIRC as
amended.
y) Association dues, membership
fees, and other assessments and
charges by homeowners,
associations and condominium
corporations
 H HIGHLIGHTS OF VAT
TRAIN LAW (2018-2019)
VAT EXEMPT
aa) Sale of drugs & medicines -
diabetes, high cholesterol &
hypertension beginning Jan. 1,
2019.
bb) Sale or lease of goods or
properties or the performance of
services … gross annual sales &
or receipts do not exceed P3M
 HIGHLIGHTS OF VAT :
RETURN & PAYMENT
OLD LAW TRAIN
SEC. 114 (A) Beginning Jan. 1, 2023
RETURN & VAT shall be filed
PAYMENT OF VAT within 25 days
MONTHLY following the close of
DECLARATION’ each taxable
QUARTERLY FILING quarter.
 HIGHLIGHTS OF VAT :
on Withholding of VAT
OLD LAW TRAIN
SEC. 114 (C) 5% Beginning Jan. 1, 2021,
FWT on VAT on VAT withholding
Gov’t money system shall shift
payments from final to
creditable VAT
SYSTEM.
> Payments for purchases of
goods & services arising
from projects by Official
Dev’t Assistance (ODA)
SHALL NOT BE SUGBJECT
 HIGHLIGHTS OF VAT :
on Withholding of VAT
OLD LAW TRAIN
SEC. 114 (C) 5% > Payments for purchases
FWT on VAT on of goods & services
Gov’t money arising from projects by
Official Dev’t Assistance
payments (ODA) SHALL NOT BE
SUGJECT TO
WITHHOLDING TAXES
 HIGHLIGHTS OF VAT :
on BIR RETURN DUE DATES
(R.R. No 11 -2018)
TAX FORM FREQUENCY OLD LAW DUE TRAIN LAW
DATE DUE DATE
0605 / 0619E Per month 10th day of the ff retained
(expanded) month
0605 / 0619F Per month 10th day of the ff retained
(final tax) month
1601 EQ Per quarter 1stQ - 1stQ - APRIL 30
(Quarterly 2NDQ 2NDQ JULY 31
Withholding Tax 3RDQ NIL 3RDQ OCT. 31
Return 4THQ 4THQ JAN. 31

N,B,
Additional 5
days for EFPS
 BASIS OF VAT

NATURE OF TRANSACTION TAX BASE

1. GROSS SELLING
1. SALE OF GOODS PRICE (RR No. 8 -
OR PROPERTIES 2018 Sec. 2)
2. SALE OF SERVICES 2. GROSS RECEIPTS
3. IMPORTATION (RR No. 8 -2018 Sec. 2)
4. DEALERS IN 3. TOTAL LANDED COST
SECURITIES 4. GROSS INCOME
(RR No. 8 -2018 Sec. 2)
 ACTUAL CASE

EXAMPLE ANSWER
MGQ Corp., domestic 1. P170,225.58
corporation acquired
goods in Singapore (LANDED COST X 12%)
with a taxable value 1. P 1,418,546.54
of P1,397,522,
brokerage fees of (1,397,522+
P6,796.90 and other 6,796.91+14,227.64)
charges of P14,227.64.
1)How much is the input
tax?
2) How much is the
landed cost?
 DEFINITION OF OUTPUT VAT

> is an ADVALOREM TAX

➢Charged on the selling price of
taxable goods or services and is
payable by the customer.
SOURCES OF OUTPUT TAX

➢ACTUAL SALE
➢TRANSACTION DEEMED SALES
➢ZERO RATED SALES
 DEFINITION OF OUTPUT VAT

> is an ADVALOREM TAX

➢Charged on the selling price of
taxable goods or services and is
payable by the customer.
 C COMPUTATION OF
OUTPUT TAX
VAT INCLUSIVE VAT EXCLUSIVE
> FORMULA: FORMULA:

VATABLE SALE : SELLING PRICE :

SELLING PRICE (SP) VATABLE SALES X 1.12

1.12 VAT = SELLING PRICE X
12%
VAT: SP – VATABLE SALE
(Philippine Setting)
 ACTUAL CASE

VAT INCLUSIVE VAT EXCLUSIVE

EX. Migo bought a high – Same case except P64,300 VAT
end laptop from SM Exclusive.
Appliance Center worth How much is the VATABLE
P64,300.00 inclusive of SALES? VAT?
VAT.
Ans.
How much is the VATABLE
SALES? VAT? SELLING PRICE: 64,300 x
1.12 = P72,016
Ans.
VAT : P72.016 – 64,300=
VATABLE SALES – P57,410.71
P7,716
VAT - P 6,889,29
 DEFINITION OF
INPUT VAT
➢VAT due paid by a VAT
registered taxpayer
➢On importation of goods or
local purchases of goods,
properties or services including
lease or use of property in the
course of trade or business.
 SOURCES OF INPUT VAT

➢LOCAL PURCHASES
➢IMPORTATION
➢PRESUMPTIVE INPUT VAT
➢TRANSITIONAL INPUT VAT
➢STANDARD INPUT VAT
 INPUT VAT ON CAPITAL GOODS

➢CAPITAL GOODS – are goods or

properties with estimated useful life
of more than 1 year;
➢Treated as depreciable
assets;
➢Used directly or indirectly in
the production or sale of
taxable goods or services
 HIGHLIGHTS OF VAT
AMENDMENTS UNDER
TRAIN on CAPITAL GOODS
➢RETAINED
➢AGGREGATE ACQUISITION COST
DURING THE MONTH IS MORE THAN P1M
exclusive of VAT and life is greater than
5 years :
- Input tax – spread evenly during the
useful life not exceeding 60 mo or 5
years.
- starts at the date of acquisition
 HIGHLIGHTS OF VAT
AMENDMENTS UNDER
TRAIN on CAPITAL GOODS
➢RETAINED
➢AGGREGATE ACQUISITION COST
DURING THE MONTH IS MORE THAN
P1M exclusive of VAT and life is
greater than 1year to less than 5
years :
- Input tax – spread over the useful life
- starts at the date of acquisition
 HIGHLIGHTS OF VAT
AMENDMENTS UNDER
TRAIN on CAPITAL GOODS
➢RETAINED
➢AGGREGATE ACQUISITION COST
DURING THE MONTH IS LESS THAN
P1M:
- Input tax – not allocated but shall
be treated as tax credit against
output tax on the month of
purchase.
 ILLUSTRATION

RLQ, Inc. is a VAT registered corporation.

On Jan. 15, 2018. PP purchased P3M
worth of capital goods from VAT
registered supplier in 2018 with an
estimated life of 10 years. How much is
the creditable input tax for Jan?
Ans.
P 3M X 12% / 60 =P6,000
 ILLUSTRATION

JMGQ, Inc. is a VAT registered

domestic corporation. On Jan. 15,
2018. It purchased P3M worth of
capital goods from VAT registered
supplier in 2018 with an estimated
life of 1 year. How much is the
creditable input tax for Jan?
Ans.
P 3M X 12% =P 360,000
 WITHHOLDING TAXES

➢NOT A TAX
➢It is only a strategy of collection
 TYPES OF
WITHHOLDING TAXES
1. FINAL WITHHOLDING TAXES
EX. Interest income on bank
deposits, prizes & winnings,
fringe benefits subject to
FBT.
 TYPES OF
WITHHOLDING TAXES
2. CREDITABLE/ EXPANDED
WITHHOLDING TAXES
EX. Compensation,
professional fee, contractors
 WITHHOLDING TAX BASE
(Revenue Memorandum
Circular No. 72-04)
Rule:
1.For non-vat: GROSS BILLINGS
2.For Vat Registered: withhold no the
amount of NET VAT
 ACTUAL CASE:
NON-VAT SUPPLIER OF GOOD
& SERVICES
Rex Q. is a non-vat registered
contractor. His gross billing on
services is P100,000. How much is
the withholding tax of his client? Net
amount due to Rex?
Ans. P2,000 cred.w/tax
(100,000 x 2% EWT)
Ans. P98,000 amount due
 ACTUAL CASE:
NON-VAT SUPPLIER OF GOOD
& SERVICES
Rex Q. is a vat registered contractor. His
gross billing on services is P100,000
exclusive of VAT. How much is the
withholding tax of his client? Net amount
due to Rex?
Ans. P2,000 cred.w/tax
(100,000 x 2% EWT)
Ans. P110,000 amount due
(P100,000X1.12=P112K total billing)
 REVIEW OF SESSION II

➢VAT is one of the business taxes

➢Ouput tax is a tax on sales
➢Input tax is a tax on purchases
➢Output tax > input tax = VAT Payable
➢Output tax < input tax = other assets
➢Withholding taxes can be classified as
final withholding taxes & creditable or
expanded withholding taxes
 References

>www.bir.gov.ph
>www.business-in-asia.com
> www.dof.gov.ph
>www.op-proper.gov.ph
>www.cta.judiciary.gov.ph
> Ferrer, Luis (2018). Tax Updates and TRAIN LAW. Manila Hotel.
>Icaranom, Rhodora G. (2018). Tax Updates and TRAIN LAW. Manila Hotel.
>Gargoles, Nelson. (2018). Mastering Withholding Taxes, PICPA.
- Thank you -