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Tuesday, February 07, 2006
Transtion rules to the 12% VAT
The following clarifications have been issued on the applicable value-added tax (VAT) rate on billed but uncollected sale of services and on the issuance of invoices/receipts from customer relationship management (CRM)/point of sale (POS) machines based on Revenue Memorandum Circular 8-2006:
1. Billed but uncollected sale of services – The ten percent VAT shall continue to apply on amounts due for services rendered before Feb. 1, 2006 but collectible only after Feb. 1 subject to the following conditions:
a.Taxpayer files an information return on or before Feb. 28 showing the names of the clients and the contract price earned and outstanding as of Jan. 31 and a declaration of the obligation to pay the applicable VAT.
b. The seller billed the unpaid amount before Jan. and a copy of such billing is attached to the information return.
c. The seller has recorded in his books of accounts the amount receivable as of Jan. 31.
2.Reconfiguration of CRM/POS machines – Taxpayers using cash register machines and point of sale machines should reconfigure the program to reflect and show separately the 12 percent VAT. While they are still unable to reconfigure, manual invoices/official receipts (ORs) should be issued indicating the amount of the 12 percent VAT. If the taxpayer continues to issue invoices/ORs indicating the ten percent VAT from the CRM/POS machines, the taxpayer/issuer shall be liable to the 12 percent VAT even if only a 10 percent VAT was shifted to the buyer. (Source: Punongbayan & Araullo)
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