Value-Added Tax (VAT) is a form of sales tax. It is a tax on consumption levied on the sale of goods and services and on the imports of goods into the Philippines. It is an indirect tax, which can be passed on to the buyer.
Who are Required to File VAT Returns
- Every person or entity who in the course of their trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Five Hundred Thousand Pesos (P 1,500,000.00) for any twelve month period.
- A person required to register as VAT taxpayer but failed to register.
- A person who imports goods.
Professional Practitioners
Professional Practitioners (PPs) are formerly classified as non-VAT taxpayers and were exempt from the Value-Added Tax and Percentage taxes under Section 109 of the National Internal Revenue Code (hereinafter referred to as the Code), until December 31, 2002. Prior to this date, they were subject only to Income Tax under Section 24 of the Code. Effective January 1, 2003, however, by virtue of Republic Act Nos. 7716 and 9010, which were implemented by Revenue Regulation Nos. 1-2003 and 3-2003, services of PPs are also subject to either VAT or 3% Percentage Tax. Pursuant to Revenue Regulations No. 16-2005, services of Professional Practitioners are subject to VAT if gross professional fees exceed P1,500,000.00 for a 12-month period and subject to 3% Percentage Tax if gross professional fees total P1,500,000.00 and below for a 12-month period.
"Professional Practitioners" include the following:
- Certified Public Accountants
- Insurance Agents (Life & Non-life)
- Other Professional Practitioners required to pass the government examination
- Others
Monthly VAT Declarations
Tax Form
BIR Form 2550 M - Monthly VAT Declarations
Documentary Requirements
- Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable.
- Summary Alpha list of Withholding Agents of Income Payments Subjected to Withholding Tax At Source (SAWT), if applicable.
- Duly approved Tax Debit Memo, if applicable.
- Duly approved Tax Compliance Certificate, if applicable.
- Authorization letter, if return is filed by authorized representative.
Procedure
- Fill-up BIR Form 2550 M in triplicate copies.
If there is payment:
- Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office (RDO)/ Large Taxpayers District Office (LTDO) where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment.
- In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment.
- Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
If there is no payment:
- Proceed to the Revenue District Office / Large Taxpayers District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments.
- Receive your copy of the duly stamped and validated form from the RDO representative.
