Claim for input tax

Claim for input tax on depreciable goods

  1. Applies only to domestic purchase or importation of capital goods subject to depreciation for income tax purposes.
  2. Where the aggregate acquisition cost (exclusive of VAT) of depreciable capital goods during any calendar month does not exceed P1,000,000, the total input tax is creditable against output tax in the month acquired.
  3. Where the aggregate acquisition cost (exclusive of VAT) of depreciable capital goods during any calendar month exceeds P1,000,000, the total input tax is creditable against output tax, as follows:
    1.  Spread evenly over 60 months (starting in the calendar month acquired) the input tax, if the estimated useful life of the depreciable capital good is 5 years or more.
    2. Spread evenly over the actual number of months of estimated useful life (starting in the calendar month acquired) the input tax, if the estimated useful life of the depreciable capital good is less than 5 years.
  4. If the depreciable capital good is sold or transferred within a period of 5 years or prior to the exhaustion of the amortizable input tax thereon, the entire unamortized input tax on the capital good sold or transferred can be claimed as input tax credit in the month/quarter when the sale or transfer was made.

Creditable input tax of a VAT-registered person also engaged in VAT-exempt sales

A VAT-registered person who is also engaged in transactions not subject to VAT shall be allowed tax credit as follows:

  1. Total input tax which can be directly attributed to transactions subject to VAT, provided that input taxes attributable to VAT taxable sale of goods and services to the Government or any of its political subdivisions, instrumentalities or agencies (including GOCC) shall not be credited against output taxes arising from sales to non-Government entities; and
  2. A ratable portion of any input tax which cannot be directly attributed to either activity computed as follows:

VAT SALES / TOTAL SALES X INPUT TAX

Advertisements

About Jonathan Ruiz CPA

Newbie Mentor and one of the influential author in the Philippines setting. His also the founder of PAM Academy and Developer of PAM PSE TRACKER application.
This entry was posted in Taxation and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s