ANY person who, in the course of his trade or business, sells, barters, exchanges or leases goods or properties, or renders services, and any person who imports goods, shall be liable to the 12 percent value added tax (VAT) imposed in Sections 106 to 108 of the Tax Code.
However, in the case of importation of taxable goods, the importer, whether an individual or corporation and whether or not made in the course of his trade or business, shall be liable to VAT imposed in Sec. 107 of the Tax Code.
Under Section 4.113-1 of Revenue Regulations (RR) 16-2005, a VAT-registered person shall issue: — (1) a VAT invoice for every sale, barter or exchange of goods or properties; and (2) a VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services.
Only VAT-registered persons are required to print their TIN followed by the word “VAT” in their invoice or official receipts. Said documents shall be considered as a “VAT Invoice” or VAT official receipt.
All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records.
The following information shall be indicated in VAT invoice or VAT official receipt: (1) a statement that the seller is a VAT-registered person, followed by his TIN;
(2) the total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: (a)the amount of tax shall be shown as a separate item in the invoice or receipt;
(b) if the sale is exempt from VAT, the term “VAT-exempt sale” shall be written or printed prominently on the invoice or receipt;
(c) if the sale is subject to zero percent (0 percent) VAT, the term “zero-rated sale” shall be written or printed prominently on the invoice or receipt;
(d) if the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt. The seller has the option to issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale.
In the case of sales in the amount of one thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and TIN of the purchaser, customer or client, shall be indicated in addition to the information required.
More recently, the Bureau of Internal Revenue has issued RR 18-2011 which provides for the penalties for violation of the requirement that output tax on the sale of goods and services should be separately indicated in the Sales Invoice or Official Receipt.
The failure or refusal to comply with the requirement that the VAT shall be shown as a separate item in the invoice or receipt shall, upon conviction, for each act or omission, be punished by a fine of P1,000 but not more than P50,000 and suffer imprisonment of not less than 2 years but not more than 4 years.
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You may contact the author at rester. nonato @yahoo.com.