RMC No. 53-2007: Reiterates the amendment made by RA No. 9337 imposing VAT on the sale of non-food agricultural products, marine and forest products and on the sale of cotton and cotton seeds in their original state

Key points

1. Change in the law. Section 109 of the NIRC formerly listed these sales as VAT-exempt. Section 7 of RA No. 9337 repealed those exemptions by removing them from the list of VAT-exempt transactions.
2. VAT rates and start date. Under RR No. 16-2005, effective November 1, 2005, primary producers, owners of the land where the products are produced, and sellers of cotton and cotton seeds are subject to VAT at 10% from November 2005 to January 2006 and 12% from February 2006 onwards.
3. Corrections by taxpayers. Taxpayers who failed to file VAT returns, or wrongly kept declaring these sales as VAT-exempt since November 2005, are encouraged to correct and self-assess, paying the deficiency VAT.
4. Directive to district offices. District offices must review VAT returns filed from November 2005 onwards. They check whether these transactions were declared for VAT and issue deficiency assessments if not.

Who is affected

• Primary producers of non-food agricultural, marine and forest products
• Owners of land where the products are produced
• Sellers of cotton and cotton seeds in original state

Deadlines and effectivity

• VAT applies from November 1, 2005
• Rate 10% from November 2005 to January 2006, 12% from February 2006