Types of VAT and tax rates

1. Taxable- 12%

  • On Sales of goods and properties- 12% of the gross selling price or gross value in money of the products and properties sold, exchanged, or bartered.
  • On Sales of services and use or lease of properties - 12% of gross receipts obtained from the exchange or sale of services, including the use or lease of properties.
  • On Imported good- 12% based on the gross value used by the Bureau of customs in obtaining tariff and customs duties, plus customs duties, excise taxes, and other charges such as tax to be paid by the importer before releasing the goods from the customs the VAT shall base on the landed cost plus excise taxes if any.
  • On Purchases by a registered dealer in the course of its business. When a dealer who will register for value-added tax (VAT) buys goods or services from another supplier, VAT is charged and is a particular percentage of the purchase cost.

2. VAT Zero Rated - 0%

  • Zero-Rated is the sale, exchange of goods/properties, barter subject to 0% VAT to sections 106(A) & 108(B) of the tax code.
  • Zero-rated also pertains to the export of sale of services or those zero-rated approvals by special laws such as PEZA or Economic zone registered organizations.

3. VAT Exempt- 0%

  • A sale of transactions or goods will be considered as VAT Exempt if it will fall under section 109- Exempt Transactions.
  • Usually, VAT Exemption transactions are a basic necessity for agricultural products, Tuition fees, lending activities, real properties, transportation, books, etc.