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HOW TO COMPUTE FOR THE TOTAL ALLOWABLE(CREDITABLE) INPUT TAX:

Input tax carry-over, from previous period P xxx,xxx


Deferred input tax on capital goods exceeding P1M xxx,xxx
Transitional input tax xxx,xxx
Presumptive input tax xxx,xxx
Regular input Vat from:
Purchase of capital goods not exceeding P1M xxx,xxx
Purchase of capital goods exceeding P1M xxx,xxx
Domestic purchases of goods, other than capital goods xxx,xxx
Importation of goods, other than capital goods xxx,xxx
Domestic purchases of services xxx,xxx
Services rendered by non-residents xxx,xxx
Others xxx,xxx
Total available input tax P xxx,xxx
Less: Deductions from input tax
Input tax on capital goods, deferred for future periods xxx,xxx
Input tax on sales to gov’t closed to expense xxx,xxx
Input tax allocable to exempt sales xxx,xxx
Input VAT claimed as refunds/TCC xxx,xxx
Others xxx,xxx
Total allowable (creditable) input tax P xxx,xxx

Illustration
A VAT taxpayer had the following data during the months:
Amount
Sales to regular customers P 4,000,000
Sales to the government 1,000,000
Export sales 3,000,000
Exempt sales 2,000,000
Total sales P 10,000,000

Sources of Input Vat: Input VAT


Input VAT carry-over, from prior period P 80,000
Deferred input tax (already amortized or 21/36 monts) 75,000

Current month transactions: Amount


Purchase of goods or services P 7,000,000 840,000
Importation of equipment (6 year life) 1,200,000 144,000
Purchase of non-depreciable goods 80,000 9,600

Directly traceable input VAT:


Input VAT traceable to exempt sales 196,800
Amount applied for VAT refunds/TCC on export sales (4) 150,000
Input VAT traceable to sales to the government 90,000

The following input VAT can only be traced to entire operations:


Amortization of deferred input VAT on capital goods 7,400
Input VAT on supplies 28,100
Total non-traceable input VAT P 35,500
Computation for the creditable Input VAT

Input VAT
Input VAT carry-over, from prior period P 80,000
Deferred input VAT 75,000
Input VAT on purchaseof goods or services 840,000
Input VAT on importation of equipment 144,000
Total available input tax P 1,139,000
Less: Deductions from input tax
Deferred input VAT for succeeding period (1) P 211,600
Input VAT on exempt sales (2) 203,900
Input VAT on export sales applied for refund
or tax credit (4) 150,000
Excess input VAT on sales to government (3) 23,350 588,850
Total allowable (creditable) input VAT P 550,150

Notes to allowable input VAT computation:


1. Amortization schedule on input tax on capital goods with monthly aggregate acquisition costs
exceeding P1M

Beginning Allowable Ending


Balance this month Balance
From previous period P 75,000 P 5,000 P 70,000
This period (60 months max.) 144,000 2,400 141,000
Total P 219,000 P 7,400 P 211,600

Note:
1. The deferred input VAT from prior period shall be amortized over the remaining
(i.e 36-21) unamortized months. Hence, P75,000 ÷ 15 = P5,000.
2. The P144,000 input VAT on the imported equipment must be amortized over 60
months. Hence, P144,000 ÷ 60 = P2,400.

2 Input tax on exempt sales

Total input tax directly attributable to exempt sales P 196,800


Add: Ratable portion of input tax not directly attributable
(P2,000,000/10,000,000 x P 35,500) 7,100
Total input tax attributable to exempt sales P 203,900

3. Excess input VAT on sales to the government

Input tax directly attributable to government sales P 90,000


Add: Ratable portion of input tax not directly attributable
(P1,000,000/10,000,000 x P 35,500) 3,550
Total input tax attributable tp sales to the government P 93,350
Less: Standard input VAT (P1M government sales x 7%) 70,000
Input tax on sales to government closed to expense P 23,350

Note: This excess amount can be a negative or positive. The amount is simply included in the
computation whether positive or negative.
Sources of OUTPUT VAT
1. Sale of goods
2. Sale of services
3. Sale of properties
4. Transaction deemed sale

Sale of Goods
1. In July, 2018, Mayon Corp. made the following sales:
Cash sales P 800,000
Sales on account 1,200,000
Installment sales 2,000,000
Total sales P 4,000,000

Other data pertaining to sales:


Sales return on sales on account P 25,000
Sales discount on cash sales 40,000

How much is the output VAT? _________________

Sale of Services
2. A VAT registered technician had the following revenue and collection
during the month:
Revenue Collection Balance
Client One for services rendered:
Billing for materials P 250,000 P 250,000 P 0
Service fee 150,000 100,000 50,000
Total P 400,000 P 350,000 P 50000

Client Two for a P600,000 contract-work not yet stated


Advances P 150,000
Compute for the output VAT ________________________

Sale of goods and services to senior citizens


Taal Pharmacy, a VAT registered, made the following sale of medicines:

Sale of medicines for hypertension and diabetes


- to senior citizens before 20% discount P 300,000
- regular customers 400,000
Sale of other medicines
- to senior citizens before 20% discount P 200,000
- regular customers 600,000

How much is the output VAT? ________________________

Sale of Properties
Type of sale of real properties: Taxability
1. Sale of a dealer, developer or lessor of real properties Vatable
2. Sale of properties considered ordinary asset Vatable
3. Sale of properties not in the course of business exempt

Mr. B is a real property dealer, sold a commercial lot in July, 2018.


The following relates to the sale:
Appraisal value P 3,500,000
Zonal value 3,200,000
Assessed value 2,600,000
Selling price 3,000,000

The output VAT on the sale is________________

Sale of real property on installment plan


A real property dealer sold a commercial lot on June 1, 2018 with the following data:
Zonal value P 5,000,000
Assessed value 4,500,000
Selling price 4,000,000

Downpayment is 10% with the balance payable in 36 monthly installment starting July 1, 2018

Value added tax shown in the deed of sale_________________


Output VAT on June 1, 2018_______________________
Output VAT on July 1, 2018_______________________

Transaction deemed sale


Consignment of goods
A Vat registered business has its own sales operations and also sells goods through consignees.
It also sells goods on consignment for a commission.
The following were the results of operations for the month ended March 31, 2018.
Sales of its own inventories P 600,000
Sales reported by the consignees 400,000
Sales - in behalf of the consignor 300,000
Commision income on goods sold for consignor 30,000

The billed prices of outstanding consignments still held by consignees as of March 31, 2018
are as follows:
January 2018 P 60,000
February 2018 40,000
March 2018 20,000

Compute the Output VAT for the month of March, 2018.


Input VAT

1. Transitional Input VAT


2. Regular Input VAT
3. Amortization of Deferred Input VAT
4. Presumptive Input VAT
5. Standard Input VAt
6. Input VAT carry over

Transitional Input VAT


Mr. A a non VAT taxpayer became liable to VAT after exceeding the threshold in October, 2018.
The following pertains to Mr. A beginning inventory for November, 2018:
Vat exempt goods P 40,000
Vatable goods-
purchased from VAT suppliers(VAT inclusive) 11,200
purchased from non VAT suppliers 30,000
Total inventory P 81,200

How much is the transitional input VAT?

Regular Input VAT


The regular input VAT is the 12% VAT paid on
-domestic purchases of goods, services or properties
- importation

Timing of Credit of Regular Input VAT


Source of regular input VAT Timing of credit
Purchases of goods or properties in the month of purchase
Purchases of services in the month paid
Importation of goods in the month VAT is paid
Purchases of depreciable capital goods or properties
---general treatment in the month of purchase
---when the monthly aggregate acquisition cost Amortized over useful life in months
exceeds P1,000,000 or 60 months, whichever is shorter

Presumptive Input VAT


A manufacturer of sardines has the following purchases for its ingredients in
processing canned sardines:
Fresh fish sardines P 120,000
Tomatoes 40,000
Ordinary salt 10,000
Tin can from VAT supplier 25,000
Paper label from VAT supplier 15,000

Presumptive input tax is _____________________


Total input VAT is _________________________