Sale of real properties in the course of trade or business
- On installment plan (initial payments do not exceed 25% of the gross selling price). If the VAT base is the gross selling price, which is higher than the zonal or market value, the output VAT shall be computed as follows:
On the otherhand, if the VAT base is the zonal or market value which is higher than the gross selling price, the output VAT on every installment payment shall be:
|Actual collection (w/o VAT)||xx||the 12% VAT based on the
higher zonal or market value
|Gross selling price|
- On cash basis or deferred payment plan (initial payments exceed 25% of the gross selling price). The VAT base shall be the higher between the GROSS selling price stated in the sales document and the zonal or market value.
- If the gross selling price is the zonal or market value of the real property, the zonal or market value shall be deemed exclusive of the VAT.
- If the VAT is not billed separately, the selling price stated in the sales document shall be deemed inclusive of the VAT.
- The basis of value-added tax on sale of real property under cash basis or deferred payment plan is:
- The higher between the selling price stated in the sales document or market value.
- Selling price stated in the sales document.
- Installment received plus interest and other charges.
- Gross receipts.
- Computation of output VAT
| Net sales
| Total invoice
JONATHAN RUIZ CPA, MIB