Summary
RMC No. 70-2004 clarifies and reiterates the rule on properly determining the amount of Value-Added Tax (VAT) on VAT invoices or VAT Official Receipts.
Key points
- Basis in the law and RR No. 8-99. Under Section 264, in relation to Section 106 (D)(1) and Section 108 (C) of the 1997 Tax Code, RR No. 8-99 sets invoicing guidelines. VAT-registered taxpayers required to issue receipts or invoices can no longer bill the VAT separately.
- Amount shown includes VAT. The amount on the invoice or receipt is deemed inclusive of the VAT due. The tax is computed by multiplying the total amount indicated by one-eleventh (1/11).
- Output tax. A seller of goods computes VAT-Output Tax at 1/11 of the total on the VAT Sales or Commercial Invoice. A seller of services computes it at 1/11 of the total on the VAT Official Receipts.
Who is affected
- VAT-registered sellers of goods
- VAT-registered sellers of services
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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