Know the principle of prorating input taxes to sales that are not perfectly allocable to vat and exempt sales

Always have your vat receipt so you can substantiate

Your vat invoice must bear an imprint/stamp that it is zero rated

For a TP to be entitled to an input tax credit, you must have zero rated sales

You cannot claim refund/input tax credit for excess input vat. You can only claim refund/tax credit when it is attributable zero rated sales.

Your remedy for unutilized input tax credit is only to carry over to succeeding quarters

You can also file for refund/input tax credit in case of cessation of business or change of status

When do you file claim for refund/input tax credit: Section 112A and 112C NOT 229 of NIRC - within 2 years from the close of the quarter in which the sales were made. A vat return may only be filed monthly or quarterly

You have to wait for the decision or the expiration of 120 day period before you go up to the CTA. You have 30 days from the expiration of 120 day period within which to go up to the CTA See CIR v. Aichi

You can only file an amended return within 3 years from filing the previous one BUT You can no longer file an amendment return once you are already under investigation/examination by the BIR

Transitional input tax - subject to VAT for the first time 2% of the value of the beginning inventory

Capital goods - amortize over the useful life or 5 yrs (whichever is shorter) the input vat if it costs more than 1million. If the aggregate cost of all the equipment costs more than 1 million, you have to amortize- VAT regulations; but all the equipment should have been purchased within the same period

The law does not require you to amortize the cost of services for vat purposes

Final withholding vat for government transactions - 5% - government remits to BIR just like a final withholding VAT; agency gives a certificate of VAT withheld; law allows a presumptive input vat of 7% even if you have no purchases which will generate input VAT = output vat payable in a government transaction will always be zero. But any excess input vat that cannot be utilized can only be claimed as a loss or cost// but if your input vat is only 3% but the presumptive IV is 7% the excess is considered as income

If you are not vat registered but you issued a vat receipt without any indication that you are not vat registered CONSEQUENCE: in addition to percentage tax, you have to pay the vat without the benefit of input vat + 50% surcharge

Authority to print need not be reflected in invoices or receipt

Zero rated/ exempt have to be indicated on the face of the invoice.