Computation of output VAT

				Without VAT		With                  VAT
		Gross receipts		xxx		xxx
	Multiplied by		12%		12/112
		Output VAT		xxx		xxx

Sources of output VAT

1. Actual sales
2. Zero-rated sales of services;
   • Processing, manufacturing or repacking of goods for other persons doing business outside the Philippines which goods are subsequently exported;
   • Services other than those mentioned in letter (a);
   • Effectively zero-rated sales of services;
   • Services rendered to persons engaged in international shipping or air transport operations;
   • Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceed 70% of total annual production;
   • Transport of passengers and cargoes by domestic air or sea carriers from the Phil. to a foreign country; and
   • Sale of power or fuel generated through renewable sources of energy such as biomass, solar, wind, hydropower, geothermal, ocean energy and other emerging energy sources using technologies such as fuel cells and hydrogen fuels.

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CPA Mentor,

JONATHAN RUIZ CPA, MIB