The tax is equivalent to a uniform rate of 12%, based on the gross selling price of goods or properties sold, or gross receipts from the sale of services. VAT applies to practically all sales of services and imports, as well as to the sale, barter, exchange, or lease of goods or properties (tangible or intangible). VAT is levied at each stage of a product or service’s production or distribution it is designed to only tax the increase in value. It is charged as a percentage of the end-market price. VAT is also known as goods and services tax (GST). Value Added Tax, or VAT, is an indirect consumption tax charged on goods and services.
Sale or importation of COVID-19 related medicines and medical supplies and equipment from 1 January 2021 to 31 December 2023. Sale, importation, printing or publication of journal, or any such educational reading material covered by the UNESCO agreement on the importation of educational, scientific and cultural materials, including the digital or electronic format of the same and of books, newspapers, magazine, review or bulletin, provided that the said materials are not devoted principally to the publication of paid advertisements. (effectivity moved by the CREATE Law).
Processing, manufacturing, or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws. Those considered export sales under Executive Order No. Sales of raw materials or packaging materials to export-oriented enterprises whose export sales exceed 70% of total annual production. Sales of raw materials or packaging materials to a non-resident buyer for delivery to resident local export-oriented enterprises. 10963 (Tax Reform for Acceleration and Inclusion or TRAIN), and implemented by Revenue Regulations 9-2021,12% VAT will apply on the following transactions beginning 27 June 2021:
Value Added Tax Examples Free Trade Area
A few agricultural commodities are subject to minimum access volumes, but these represent less than 1% of all tariff lines.In view of the existing free trade agreements in the region, such as the ASEAN Free Trade Area (AFTA), the ASEAN-China Free Trade Area (ACFTA), the ASEAN-Korea Free Trade Area (AKFTA), the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA), the ASEAN-INDIA Free Trade Area (AIFTA), the European Free Trade Association (EFTA), and the Philippine-Japan Economic Partnership Agreement (PJEPA), the Philippines has taken steps to progressively eliminate tariffs. Note that while the tariff classification rulings issued by the Philippine Tariff Commission do not prevent the BOC from conducting its own verification, these rulings carry persuasive reference in support of the classification and duty rate used by an importer.The Philippines adopts the World Trade Organization (WTO) Valuation Agreement, where the declared invoice price is used as the basis for determining customs duties.As a protective measure, the Philippines retains higher tariff rates (20% to 50%) on certain sensitive agricultural products, such as livestock and meat products, sugar, vegetables, and coffee. Despite this, it is still advisable that tariff classification rulings from the Philippine Tariff Commission be secured prior to importation of goods into the Philippines in case of uncertainty as to the correct classification or valuation. As with the rest of the Association of Southeast Asian Nations (ASEAN) countries, tariff classification in the Philippines is based on the ASEAN Harmonised Tariff Nomenclature (AHTN), which is patterned after the Harmonised Commodity Classification and Coding System (HS) Convention and its 2002 revisions, and the latest edition is HS Code 2017 under the Customs Modernization and Tariff Act.In May 2021, the Tariff Commission issued 325 rulings to address commonly raised valuation and tariff classification issues.
The following table contains selected examples as revised: Taxable document/transaction (tax base)PHP 2.00 for every PHP 200 of the par value or actual consideration for no-par sharesSale, barter, or exchange of shares of stock listed and traded through the local stock exchangeOther sales agreement, agreement to sell, memoranda of sales, delivery or transfer of shares or certificates of stockPHP 1.50 for every PHP 200 of the par value or 50% of the DST paid upon original issuance of no-par sharesCertificate of profits, interest in property or accumulationsPHP 1.00 for every PHP 200 of the face valuePHP 1.50 for every PHP 200 of the issue price.Bank check, draft, certificate of deposit not bearing interest, other instrumentsDeed of sale, conveyance of real propertyPHP 15.00 for each PHP 1,000 of consideration/value or fractional part thereofPHP 0.60 on each PHP 200 of the issue priceAcceptance of bills of exchange and othersPHP 0.60 on each PHP 200 of the face valueForeign bills of exchange and letters of creditPolicies of annuities or other instrumentsPHP 1.00 on each PHP 200 of premium or instalment paymentPHP 0.40 on each PHP 200 of the premium or contribution collectedPHP 30.00 per warehouse receipt (valued at PHP 200 or more)Jai-alai, horse race tickets, lotto, or other authorised number gamesPHP 0.20 on every PHP 1.00 cost of the ticketExempt if bill/receipts not exceeding PHP 100 PHP 2.00 for bill/receipts not exceeding PHP 1,000 or PHP 20.00 for bill/receipts exceeding PHP 1,000PHP 10. Documentary stamp tax (DST)DST is payable at varying rates on various documents and transactions.
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