Tuesday, January 17, 2006

E-VAT


The topic of Value Added Tax has always evaded the BAR. But there are certain things about VAT that are good to know like the new law on E-VAT or RA 9337.

RA 9337 removes the VAT exemption of several formerly exempt sectors of our economy such as
- medical services rendered by professionals
- legal services
- petroleum products, including sale and importation of raw materials for its manufacture
- non-food agricultural
- marine and forest products
- work or art, literary works, musical compositions
- cotton and cotton seeds
- coal and natural gas
- passenger cargo vessel of more that 5000 tons
- generation, transmission and distribution of electricity including that of electronic cooperatives
- sale of residential lot valued at more that P1.5 M.
- sale of residential house and lot/dwellings valued at more than P2.5 M
- lease of residential unit with a monthly rental of more than P10,000.

For the year 2005, the rate remains at 10% but it maybe increased to 12% starting year 2006 when certain conditions are met.

Sale of goods and services to government is subject to 10% VAT under the Tax Code. Further, before making payments to suppliers, government agencies acting as withholding agents are required to deduct and withhold a final VAT due at the rate of 5% of the gross payments thereof.

This act was implemented on November 1, 2005.







1 comment:

  1. Lawstude,

    I find the subject of taxation the hardest so i will appreciate it if u post more on this topic.

    ReplyDelete