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Chapter 9 - Input Vat Notes

Input VAT refers to the VAT paid or due by a VAT-registered person on purchases, imports, leases or uses of properties in the course of business. There are different types of input VAT including transitional input VAT, regular input VAT, and input VAT on purchases of depreciable capital goods. Transitional input VAT is an initial input tax credit equivalent to 2% of the beginning inventory that applies to newly registered VAT payers. Regular input VAT includes the 12% VAT paid on domestic purchases, services, properties, and imports. Input VAT on capital goods that exceed 1,000,000 pesos can be deferred and claimed over the useful life or 60 months, whichever is shorter.

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133 views2 pages

Chapter 9 - Input Vat Notes

Input VAT refers to the VAT paid or due by a VAT-registered person on purchases, imports, leases or uses of properties in the course of business. There are different types of input VAT including transitional input VAT, regular input VAT, and input VAT on purchases of depreciable capital goods. Transitional input VAT is an initial input tax credit equivalent to 2% of the beginning inventory that applies to newly registered VAT payers. Regular input VAT includes the 12% VAT paid on domestic purchases, services, properties, and imports. Input VAT on capital goods that exceed 1,000,000 pesos can be deferred and claimed over the useful life or 60 months, whichever is shorter.

Uploaded by

Geraldine Mae Damoslog
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Input Vat

- VAT due or paid by a VAT-registered person


- Importation, local purchases, lease or use of properties
- Usually reflected as a separate item in the VAT invoice or VAT official receipt issued by the
VAT-registered supplier
- INPUT VAT of the Buyer = Output VAT of the supplier
- If not billed separately = SP is deemed to be inclusive of VAT same if VAT is erroneously
billied

Requisites of a Creditable Vat

1. Incurred in the course of trade and business


2. Evidence by a VAT invoice or official receipt
3. Issued by VAT-registered person
4. Incurred in relation to vatable sales not exempt sales

Types of Input VAT

1. Transitional Input VAT


- Initial Input Tax Credit equivalent to 2% of the beginning inventory of goods, materials, or
the ACTUAL VAT paid whichever is higher
- For persons who become liable to value-added tax or any person who elects to be a VAT-
registered person
- Goods exempt from VAT shall be excluded in the computation
- BASED on the vatable beginning inventories in the month of registration as a VAT taxpayer
- Operates to benefit newly VAT-registered persons whether or not they paid taxes on the
acquisition of their inventory
- Applies only to beginning inventory, excluding equipment
- Before computing for inventory Input VAT must remove first from the Invoice of
Purchased inventory
- Claimable in the month of registration as a VAT taxpayer

NOTE: Non Vat taxpayers are not allowed to claim INPUT VAT hence it is added to their expenses.
However their sales of pre-VAT registration become instantly vatable after they registered as VAT
Taxpayers

Requisites for Claim of Transitional Input VAT

1. Submit an inventory list of goods


2. Prepare an entry recognizing the transitional input VAT credit in his accounting books
Regular Input Vat

a. 12% VAT on Domestic purchase of goods services or prop


b. Importation of goods and services

Purchase of Goods and Prop – Claimed on month of purchase

Purchase of Services – In the month paid

Importation of Goods – In the month VAT is paid

Purchase of depreciable capital goods

- General treatment: Didn’t exceed 1,000,000 = month of purchase


- Exceed 1,000,000 = deferred and amortized over the useful life in months or 60 months
which ever is shorter

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