VAT Philippines – Philippines VAT Rates & VAT Calculator

Like some European countries, VAT Philippines or also known as Value Added Tax is a special form of tax that is applied to the sales of goods and services within the Philippines. However, there are very strict rules regarding VAT Philippines because every business that is eligible for VAT registration is bound to pay the specific amount of tax. In Philippines, there is a particular threshold that every business has to meet first in order to become VAT registered; otherwise, many of the small-scale businesses are not even eligible for VAT.

Philippines is one of those few countries that have a VAT taxation system because a majority of the countries follow the GST form of tax. VAT is considered as an indirect tax in the Philippines, but it’s still the responsibility of every taxpayer to pay VAT on time.

What is the VAT rate in the Philippines?

The current VAT rate in the Philippines is 12%; it’s the most latest and updated rate of 2021. However, this rate may change in the future, so you should always refer to the current VAT rate in the Philippines while doing any of your conditions while filing this tax. The 12% VAT rate in the Philippines is applied to the gross selling price of goods and services.

Click Here: Output and Input VAT

Why Should You Use Our Philippines VAT Calculator?

If you are looking for any reliable and accurate VAT rate calculator for the Philippines, then you must try our online VAT calculator tool. This tool is created by our expert team of developers, so there are no chances of mistakes or bugs while using this tool. Moreover, our online vat Philippines calculator works on a highly advanced algorithm according to the current VAT rate in Philippines. Our VAT calculator is also free of cost, and we will never ask you about any payment details or monthly subscriptions while using our online tool. It’s a free and highly secure Philippines that will also keep your private data such as calculations and tax records fully encrypted. Moreover, there is no such need for account sign-up or registration to use our online tool.

0% VAT Rate in Philippines

Just like other countries where VAT tax is applied, there are some particular goods and services that fall into the VAT 0% Category. For these particular goods and services, the sellers are not required to pay the standard 12% VAT. However, for your convenience, we have listed down some important categories in which the VAT tax rate is 0%.

  • Processing and manufacturing of goods.
  • Exports or any business which is based outside the Philippines.
  • Services that are exported outside Philippines.
  • Goods that are exported outside the Philippines.
  • Any particular goods or services that come under any particular agreement.

VAT-Exempt in Philippines

There are also some particular goods and services in Philippines that are considered VAT exempted. All those Philippines-based companies that do not exceed the particular or specific amount of three million pesos are not eligible for the VAT tax. However, we have not mentioned the comprehensive list of VAT Exempt activities in the Philippines, but you can check the BIR official website anytime.

How to Check if Your Company is VAT Registered?

Even though you will get a special certificate of registration by the BIR department after registering your business on VAT, but still, if you are not aware of it yet or you want to know about any VAT registered business, then you must visit the official BIR website or department. However, if your business is not registered for VAT, then you can apply to become VAT registered.

Frequently Asked Questions – VAT Philippines

Who are exempted from VAT in the Philippines?

If we talk about VAT-exempted goods and services in the Philippines, then these are the following areas of the economy that are subjected to VAT exemption.

  • Exports outside the Philippines.
  • Foreign Remittance.
  • Sales or purchase of goods to any specific person who is subjected to the VAT zero rate according to the financial laws of the country.
  • Those particular sales involve business activity outside the Philippines or any non-resident person.
  • Educational services.
  • Some particular residential sales or leases.

Remember, it’s not a complete list of all the goods and services that are considered VAT exempted. However, in order to view the complete list of VAT-exempted items, you must check the official website.

What are subject to VAT Philippines?

These are the following particular areas of the economy or entities that are required to pay the VAT tax.

  • Any particular business, lease of goods and services, or any exchange that exceeds the three million pesos threshold of the actual gross sales amount is subjected to VAT in Philippines.
  • All those individuals or small-scale businesses that are registered voluntarily on VAT even if they do not meet the three million pesos threshold mark.
  • Business, persons, or entities that deal with the import of goods are also subjected to VAT tax in Philippines.

Is Rice VAT exempt Philippines?

Yes, rice is also considered a VAT-exempted item in the Philippines to facilitate the poor citizens of the country. Moreover, there is also VAT exemption for livestock, corn, seeds, and many other areas that are directly linked with the poor population of the country and farmers.

What is output VAT Philippines?

The specific VAT tax which is applied to the sales is known as output VAT. In other words, the term output VAT refers to the amount of VAT that sellers pass to the buyers is known as VAT output in Philippines. However, this term is not only applicable in Philippines but also followed in every country where VAT tax is followed instead of General Sales Tax or also known as GST.

How can I reduce my tax Philippines?

There are multiple legal options available for anyone to reduce the tax in Philippines.

  • Keep a record of all kinds of deductions.
  • Get medical insurance.
  • Donate any particular amount to the charity.

Remember, it’s very important to keep a complete record of your expenses, in this way you can claim them legally in case of any issues.
How can I reduce my VAT payable?

You can reduce your VAT payable amount in the following available ways.

  • Consider any other retirement plan.
  • Declare personal exemptions.
  • Make donations to the charity organizations operating within the Philippines.
  • Track your complete deductions.

What benefits do we enjoy from taxes in the Philippines?

As we all know that the entire taxation system is just for the utmost benefit of the citizens. If all the eligible persons will pay the tax money to the government, the government can reinvest that money on building new roads, schools, infrastructure, government salaries, and several other areas that are linked with your benefit. Moreover; in countries like Philippines, the taxpayers are given additional facilities such as reduced property taxes, etc…

What happens if you don’t pay taxes Philippines?

According to the laws of Philippines, anyone who owns a business that is eligible to pay taxes should pay the tax. Otherwise, he/she will be fined almost five thousand pesos. If the person cannot pay the penalty, that particular person will have to spend at least six months in prison.

Final Words – Value-Added Tax Rates in Philippines

We hope this detailed article has given you in-depth information about VAT Philippines. Remember, VAT rules are not the same in every country as they keep changing according to the current economic conditions of any country. If you are doing your VAT calculations, then you must refer to the accurate, current VAT rate of any country, and don’t forget to again verify it before reaching any conclusion. If you feel that this article has helped you, don’t forget to share it with your friends and colleagues.

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