PRE-TRAIN TRAIN
VAT Exemption Section 109 VAT exemption include, among others, the following
transactions:
1) Importation of professional instruments, etc. belonging to persons
coming to settle in the Philippines, for their personal use,
accompanying such persons or arriving within 90 days before or after
their arrival.
2) (a) Sale of real property not primarily held for sale or for lease in the
ordinary course of business; (b) Sale of real property utilized for low-
cost/socialized housing; (c) Sale of residential lot valued at P1,919,500
or below; (d) Sale of house and lot and other residential dwellings
valued at P3,199,200 and below.
3) Lease of residential unit with monthly rental not exceeding P12,800.
4) Other sale or lease of goods or properties, or sale of services, the
amount of which does not exceed P1,919,500.
Deferred ITC Sec. 110(A)(2)(b). The ITC associated with the purchase or importation of
depreciable capital goods totaling more than PI .000,000 shall be amortized.
Application for VAT Sec. 112(C). The Commissioner shall grant a refund or issue a TCC within
refund/TCC 120 days form the date of submission of complete documents by the
taxpayer.
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Expansion of the exemption on such professional instruments, etc. to
include those belonging to overseas Filipinos (Filipinos coming to settle
in the Philippines, or Filipinos who are 5 presently residents or citizens
of other countries).
(a) Sale of real property not primarily held for sale or for lease in the
ordinary course of business; (b) Sale of real property utilized for low-
cost/socialized housing; (c) Sale of residential lot valued at P1,500,000
or below; (d) Sale of house and lot and other residential dwellings
valued at P2,500,000 and below.
Beginning 1 January 2021, the VAT exemption shall only apply to (a)
Sale of real properties not primarily held for sale to customers or held
for lease in the ordinary course of trade or business; (b) Sale of real
property utilized for socialized housing; (c) Sale of house and lot and
other residential dwellings of not more than P2,000,000.
Lease of residential unit with monthly rental not exceeding P15,000.
Other sale or lease of goods or properties, or sale of services, the
amount of which does not exceed P3,000,000.
Added the exemption of association dues, membership fees, and other
assessments and charges collected by homeowners’ associations and
condominium corporations.
Sale of gold to the BSP.
Beginning January 1, 2019, sale of drugs/medicines for diabetes, high
cholesterol, and hypertension shall be VAT-exempt.
The amortization of the ITC shall only be allowed until December 31
2021. After such date taxpayers with unutilized ITC on capital goods
shall be allowed to apply the same as scheduled.
The Commissioner shall act on the application within 90 days from the
date of submission of the application together with the complete
documents in support thereof.
 In case of full or partial denial of the claim, or the failure on the part of the
Commissioner to act within 120-day period, the taxpayer may, within 30
days from receipt of the decision or after the expiration of the 120-day
period, appeal with the CTA.
VAT Returns VAT-registered persons shall pay VAT on a monthly basis. They will also
file quarterly VAT returns
Withholding of VAT Sec. 114(C). The government or any of its political subdivisions,
instrumentalities, agencies, including GOCCs shall withhold a final VAT of
5% of the gross payment.
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In case of full or partial denial of the claim, the taxpayer may, within 30
days from receipt of the decision, appeal with the CTA.
Failure on the part of the official or employee of the BIR to act on the
application shall be penalized under Section 269 of the Tax Code.
Effective January 1, 2023, the filing and payment of VAT shall be done
within 25 days following the close of each taxable quarter.
Effective January 1, 2021, the VAT withholding system shall shift from
a final to a creditable withholding system.