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Finalppt - INPUT VAT

Input VAT is value added tax added to the price of goods or services that are liable for VAT when purchased by a business. There are several types of input VAT including actual, transitional, presumptive, and standard. Transitional input VAT allows a business becoming VAT registered to claim input tax on beginning inventory. Presumptive input VAT applies to certain agricultural products and allows claiming a 4% credit on purchases. To be creditable, input VAT must be paid or incurred in the course of business and supported by a valid VAT invoice from a registered seller, except for presumptive and transitional input VAT.

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37 views

Finalppt - INPUT VAT

Input VAT is value added tax added to the price of goods or services that are liable for VAT when purchased by a business. There are several types of input VAT including actual, transitional, presumptive, and standard. Transitional input VAT allows a business becoming VAT registered to claim input tax on beginning inventory. Presumptive input VAT applies to certain agricultural products and allows claiming a 4% credit on purchases. To be creditable, input VAT must be paid or incurred in the course of business and supported by a valid VAT invoice from a registered seller, except for presumptive and transitional input VAT.

Uploaded by

charissetoslolado
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Input VAT

PIMENTEL, ANGELICA 2024 March


Input VAT
value added tax added to the price of
goods or services that are liable for VAT
when they are purchased by a business
INCIDENCE WHERE INPUT TAX OCCUR:
Purchase or importation of goods
Purchase of real properties where VAT was actually paid
Purchase of service where VAT was actually paid
Transaction considered as “deemed sale”
Transitional input tax when updating VAT registration
Presumptive input tax on the manufacture of certain
products

2
REQUISITES OF A CREDITABLE INPUT VAT:

1. paid or incurred in the course of trade or


business
2. VAT Invoice/ official receipt
3. (2) must be issued by a VAT- registered person
4. Incurred in relation to vatable sales not from
exempt sales

2
Illustration:
Mr. Monkiy had a P230,000 output VAT in the month. She also made the following
purchases during the month:

Goods from non-VAT suppliers P 280,000


Goods from VAT suppliers with VAT invoices 224,000
Importation of car for personal use, VAT inclusive 1,120,000
Importation of grapes and apples for sale 300,000
Importation of merchandise for sale, VAT inclusive 896,000
Services from VAT suppliers, evidenced by ordinary receipt 120,000
Mr. Monkiy had a P230,000 output VAT in the month. She also made the following
purchases during the month:

Goods from non-VAT suppliers P 280,000


Goods from VAT suppliers with VAT invoices 224,000
Importation of car for personal use, VAT inclusive 1,120,000
Importation of grapes and apples for sale 300,000
Importation of merchandise for sale, VAT inclusive 896,000
Services from VAT suppliers, evidenced by ordinary receipt 120,000

CREDITABLE INPUT VAT : VAT due of Mr. Monkiy :

Goods from VAT suppliers P 24,000 Output VAT P 230,000


VAT on importation 96,000 Less; Input VAT 120,000
Total creditable input VAT P 120,000 Total VAT due P 110,000
TYPES OF INPUT VAT:
1. Actual input VAT
2. Transitional Input VAT
3. Presumptive Input VAT
4. Standard Input VAT
2
Transitional Input VAT
A person who becomes liable to value-added tax or any
person who elects to be a VAT-registered person shall be
allowed of input tax on beginning inventory of goods, materials
and supplies equivalent to 2% of the value of such inventory
or the actual value-added tax paid on such goods, materials
and supplies whichever is higher, which shall be creditable
against the output tax

4
Illustration 1: Transitional Input VAT

On January 2020 company purchased in cash from


another company which is VAT registered goods
amounting to 70,000, VAT exclusive. On February the
company became liable for VAT, the goods were sold on
February on account for 112,000, VAT inclusive

4
Illustration 2: Transitional Input VAT

Alexander became liable to VAT after exceeding the VAT threshold


in November 2020. Alexander had the following beginning
inventory for December 2020:

VAT- exempts goods P 20,000


Vatable goods:
-purchased from non-VAT sellers 60,000
-purchased from VAT sellers 11,200
Total December 31, 2020 inventory P 91,200
4
Illustration 3: Transitional Input VAT

Ilo-ilo General Merchandise became liable to VAT after exceeding


the VAT threshold in June 2020. Alexander had the following
beginning inventory for July 2020:

Frozen meat, eggs and dried fish P 40,000


Fruits and vegetables 50,000
Grocery items (all from VAT suppliers) 22,400
Appliances (from non VAT suppliers) 30,000
Total Beginning inventory P 142,400
4
12% VAT Paid on Importation
In March 2023, ABC Company imported goods with a total landed
cost of P200,000. ABC Company paid the P24,000 VAT on
importation and withdrew the goods on April 2019. VAT shall be
claimed in?

Pursuant to Section 110(A)(2) of the Tax Code, the input tax on


domestic purchase or importation of goods or properties by a VAT-
registered person shall be creditable
upon consummation of sale and on importation of goods or
properties
upon payment of the VAT prior to the release of goods from the
4
custody of the BOC
Amortization of Deferred Input VAT

On or after January 1, 2022, The input VAT on Capital goods


purchased that exceeds 1 million cannot be amortized and shall be
fully recognized outright and may be claimed as input tax credit
against output ta x during the month of purchase

4
Presumpive Input VAT
Persons or firms engaged in the processing of sardines,
mackerel and milk, and manufacturing refined sugar,
cooking oil and packed noodle-based instant meals, shall
be allowed a presumptive input tax creditable against output
tax, equivalent to four percent (4%) of the gross value in
money of their purchases of primary agricultural products
which are used as inputs to their poduction.

4
Presumpive Input VAT

Code word: Sa MaMi Co PaRe


(Sardines, Mackerel, Milk, Cooking Oil, Packed
Noodles and Refined Sugar)

4
Illustration 1: Presumptive Input VAT
Oldstown Corp., VAT-registered hot chili flavored sardines processor,
purchased the following ingredients for the processing of canned sardines.
COST INPUT VAT

Fresh sardines P 800,000 ---


Hot chili 50,000 ---
Tomatoes 400,000 ---
Ordinary Salt 20,000 ---
Tin can 120,000 P 14,400
Labels 60,000 7,200
4
Illustration 2: Presumptive Input VAT

Brownsugarland Corporation is a processor of refined sugar. It purchased a


total of 500,000 sugar cane for processing. It purchased other supplies at a
cost of 80,000, exclusive of VAT

4
Illustration 3: Presumptive Input VAT

Mr. Mantika is a VAT registered manufacturer of cooking oil. During a month,


it made the following purchases:
Raw coconut ( to be processed into copra) P 300,000
Copra from farmers 450,000
Other suuplies in the manufacture of cooking oil 120,000
Total P 870,000

4
Illustration 1: Mixed Input VAT
Owel is a producer of cooking oil from coconut and corn. Previously exempt
from the value added tax, he became subject to the VAT on January 1, 2024.
For January 2024, with sales of 700,000 Value-added tax not included, he
had the following data for the month:
Inventory, January 1:
Corn and Coconut purchased from farmers 100,000
Packaging materials purchase (VAT suppliers) 22,400
Supplies purchase from VAT supplier 11,200
Purchase During the Month:
Coconut and corn from farmers 330,000
Packaging Materials 56,000
4
Supplies 16,800
Thank you
for listening!

PIMENTEL, ANGELICA 2024 March

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