Tax Simplified Vat Notes Ph

PRINCIPLES OF TAXATION: (General Principles and Income Taxation)

nd

College of Commerce and Business Administration [2 Semester, A.Y. 2012 – 2013]

Atty. Marcel M. Ortiguerra

PART IV. BUSINESS TAXES

VAT-REGISTERED PERSONS:

Business – regular conduct or pursuit of a

commercial or economic activity, including

transactions incidental thereto, by any person or

government entity.

a. There must be a commercial or economic

activity

b. There must be regularity in the activity

Commercial or economic activity – an activity, the

purpose of which is to obtain gain, profit or income

Any person who, in the course of trade or

business, sells, barters or exchanges goods

or properties or engages in the sale or

exchange of services shall be liable to

register if:

1. The gross sale or gross receipts for the past

12 months have exceeded P1,500,000.00,

excluding VAT-exempt transactions

2. There is reasonable grounds to believe that

his gross receipts or gross sales in the next

12 month period shall exceed P1,500,000.00,

excluding VAT-exempt transactions

MAJOR BUSINESS TAXES:

1. Excise taxes

2. Value-added taxes

3. Percentage taxes

A. VALUE-ADDED TAX (VAT)

A form of sales tax

Is in the nature of tax on consumption.

A tax on the estimated market value added

to a product or material at each stage of its

manufacture or distribution, ultimately

passed to the consumer.

an indirect tax and the amount of tax may

be shifted or passed on to the buyer,

transferee or lessee of the goods, properties

or services

Should a person required to register under

the VAT system fails to do so, he shall still be

liable for the payment of the tax but he

cannot avail of the input tax credit for the

period that he was not registered

INPUT AND OUTPUT TAXES

Input tax

The value-added tax due from or paid by a

VAT-registered person in the course of his

trade or business on importation of goods or

local purchase of goods or services,

including lease or...