Question

VAT PHILIPPINES

(Presentations similar to real business transactions will be appreciated)

1. Make a diagram or flowchart 1.

2. Start with a VAT-registered person selling to another VAT-registered person and last to the ultimate consumer.

3. Compute the Input Vat, Output Vat and Vat payable in each transaction.

Answer 1

VAT PHILIPPINES WITH EXAMPLE:

Please give a thumbs up if you find this answer useful!

Following is a fictitious case for gaining clarity of the flow of transactions under VAT.

Case:

ABC Ltd. a VAT-registered person sales goods worth P200,000 (excluding VAT) to XYZ Co. (VAT-registered person) in the month of April. XYZ Co. sold same goods to Mr.Z (Ultimate consumer - Not VAT-registered person) for P315,000 (excluding VAT).

Following is flow of transactions:

ABC Ltd. Sales goods: Sale Value = P200,000 Add: Output VAT (12%) = P24,000 Invoice Total = P224,000 XYZ CO. Purchased goods: Purchase Value = P200,000 Add: Input VAT (12%) = P24,000 Bill Total = P224,000 XYZ CO. Sales goods: Mr.Z Purchased goods: Sale Value = P315,000 Add: Output VAT (12%) = P37,800 Invoice Total = P352,800 Purchase Value = P315,000 Add: VAT (12%) = P37,800 Bill Total = P352,800

Explanation:

When ABC Ltd. sales goods to XYZ Co., it collects VAT from customer and it becomes Output VAT liability for ABC which needs to be paid to Government. XYZ Co. has paid VAT to it's supplier, it shall be able to receive credit of Input VAT. End consumer Mr. Z buys goods from XYZ Co. and as it is not registered with VAT and is ultimate consumer, He shall bear total tax amount for whole chain (P24,000 + P13,800 = P37,800).

Calculation of same can be found in this table:

XYZ Co. Mr. Z ABC Ltd. 24,000 24,000 37,800 Particulars Output VAT on Sale of P200,000 Input VAT on Purchase of P200,000 Output VAT on Sale of P315,000 VAT to be borne by Consumer Mr.Z Total Output VAT (A) Total Input VAT (B) VAT to be borne by end consumer VAT Payable (A-B) 37,800 24,000 Đ 37,800 24,000 37,800 24,000 13,800 P