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Section 4.110-4 of RR 16-05 Uploaded by fatmaaleah
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unamortized input tax on the capital goods sold/transferred can be claimed as inp tax credit during the month/quarter when the sale or transfer was made but subject the limitation prescribed under Sec. 4.110-7 of these Regulations.
SECTION 4.110-4. Apportionment of Input Tax on Mixed Transactio — A VAT-registered person who is also engaged in transactions not subject to VA shall be allowed to recognize input tax credit on transactions subject to VAT follows:
1. All the input taxes that can be directly attributed to transactions subject VAT may be recognized for input tax credit; Provided, that input taxes that can directly attributable to VAT taxable sales of goods and services to the Government any of its political subdivisions, instrumentalities or agencies, includi government-owned or controlled corporations (GOCCs) shall not be credited agai output taxes arising from sales to non-Government entities; and
2. If any input input tax tax cannot be directly attributed to either a VAT taxable VAT-exempt transaction, the input tax shall be pro-rated to the VAT taxable a VAT-exempt transactions and only the ratable portion pertaining to transactio subject to VAT may be recognized rec ognized for input tax credit. Illustration: ERA Corporation has the following sales during the month: Sale to private entities subject to 10%
P100,000.00
Sale to private entities subject to 0% Sale of exempt goods Sale to gov't. subjected to 5% final VAT Withholding
100,000.00 100,000.00
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Input tax on sale of exempt goods
2,000.00
Input tax on sale to government
4,000.00
Input tax on depreciable capital good not attributable to any specific activity (monthly amortization for 60 months) A.
What is GST
P20,000.00
The creditable input tax for the month shall be computed as follows: Input tax on sale subject to 10%
P5,000.00
Input tax on zero-rated sale
3,000.00
Ratable portion of the input tax not directly attributable to any activity: Taxable sales (0% and 10%) X Amount of ——————————— input tax You're Reading a Previewnot directly Total Sales attributable Unlock full access with a free trial.
P200,000.00 DownloadXWithP20,000.00 Free Trial ————— 400,000.00
Total creditable input tax for the month
P10,000.00
P18,000.00
shall B. The input tax attributable to sales to government thetitle month Sign up to vote for on this computed as follows: Useful Not useful
Input tax on sale to gov't.
P4,000.00
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400,000.00 Total input tax attributable to sales to government
P9,000.00
C. The input tax attributable to VAT-exempt sales for the month shall computed as follows: TaCSAD
Input tax on VAT-exempt sales
P2,000.00
Ratable portion of the input tax not directly attributable to any activity: VAT-exempt sales ——————— Total Sales
X
Amount of input tax not directly attributable
P100,000.00 X P20,000.00 ————— You're Reading a Preview 400,000.00
P5,000.00
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Total input tax attributable to VAT-exempt salesWith Free Trial Download
P7,000.00
The table below shows a summary of the foregoing transactions of ER Corporation: Output VAT
Input VAT Input VAT not directly directly Attributable Attributable to any Activity
Excess Total Creditable Net VAT Input Unrecoverab Sign up to voteInput on this title Input Input Payable VAT for VAT for input Not useful VAT VAT Useful carryrefund VAT
over/
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Withheld by Government entity as Final Withholding VAT
The input tax attributable to VAT-exempt sales shall not be allowed as cre against the output tax but should be treated as part of cost or expense.
Notwithstanding the foregoing provisions, for persons engaged in zero-rated sales under Sec. 108(B)(6) of the Tax Code and non-zero rated sales, t aggregate input taxes shall be allocated ratably between the zero-rated sale a non-zero-rated sale.
SECTION 4.110-5. Determination of Input Tax Creditable during Taxable Month or Quarter . — The amount of input taxes creditable during a month quarter shall be determined in the manner illustrated above by adding all creditab input taxes arising from the transactions enumerated under the preceding subsectio of Sec. 4.110 during the month or quarter plus any amount of input tax carried-ov from the preceding month or quarter, reduced by the amount of claim for VAT refu or tax credit certificate (whether filed with the BIR, the Department of Finance, t Board of Investments or the BOC) and other adjustments, such as purchases returns You're Reading sales a Preview allowances, input tax attributable to exempt and input tax attributable to sal subject to final VAT withholding. Unlock full access with a free trial.
SECTION 4.110-6. Determination of the Output Tax and VAT Paya Download With Free Trial and Computation of VAT Payable or Excess Tax Credits. — In a sale of goods properties, the output tax is computed by multiplying the gross selling price as defin in these Regulations by the regular rate of VAT. For sellers of services, the output t is computed by multiplying the gross receipts as defined in these Regulations by t regular rate of VAT. Sign up to vote on this title
Useful Not useful tax In all cases where the basis for computingthe output is either the gro selling price or the gross receipts, but the amount of VAT is erroneously billed in t invoice, the total invoice amount shall be presumed to be comprised of the gro
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