Determination of creditable input taxes
|Input taxes on domestic purchases or importations||xxx|
|Transitional input tax||xxx|
|Presumptive input tax||xxx|
|Input tax carried over from previous month/quarter||xxx|
|Total input taxes||xxx|
|Input taxes claimed as refund||xxx|
|Input taxes claimed as tax credit for other NIRC taxes||xxx|
|Input taxes applicable to purchase returns and allowances||
|Input taxes attributable to sales subject to VAT withholding||
|Input taxes attributable to VAT-exempt sales||xxx||xxx|
|Net creditable input taxes||xxx|
Excess output or input taxes
- If at the end of any taxable month or quarter the output tax exceeds the input tax, the difference is VAT payable (current liability).
- If the input tax at the end of any taxable quarter (inclusive of input tax carried over from the previous quarter) exceeds the output tax, the excess input tax (current asset) shall be carried over to the succeeding taxable month or quarter, provided that any input tax attributable to 0-rated sales by a VAT-registered person may at his option be refunded or applied for a tax credit certificate.
Questions to ponder:
The formula: Output taxes (less) input taxes (equals) value-added tax payable means that:
A. Value-added taxes are not deductible from gross income.
B. Value-added taxes paid on purchases are prepayments.
C. Value-added taxes during a taxable period may not appear in the financial statements.
D. All the above statements are correct.
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JONATHAN RUIZ CPA, MIB