Philippines VAT rates and VAT compliance
Filipino VAT rates
VAT is due on all goods and services supplied domestically or imported. Exports are exempted.
The following VAT rates are in place:
|Rate||Type||Which goods or services|
|18%||Higher||"Amusement tax" on night clubs, bars, cabarets etc|
|12%||Standard||All other taxable goods and services|
|0%||Reduced||Exports; international shipping; passenger transport; renewable energy|
|0%||Zero||Sale or import of certain agricultural goods; passenger transport; domestic gas and water; financial services and insurance; medical supplies; real estate; newspapers and books|
Supplies to government bodies require a split payment, with 5% of the price being withheld and being paid directly to the tax authorities.
Philippines VAT compliance
The date on which VAT becomes due is known as the tax point or time of supply. In the Philippines this is the time of the transaction, including continuous supplies. For services, it is the time of payment. A prepayment or deposit will trigger a VAT liability.
For imports, the VAT liability occurs at the time of clearing customs.
The following information should be included on all VAT invoices to ensure the customer may reclaim the output VAT:
- Unique, sequential invoice number
- Vendor’s tax identification number (TIN) and details
- Customer’s TIN and details for invoices above PHP1,000
- Description of the goods (including quantities, units etc) or services
- Net, VAT and gross amounts
Invoices may be made out in foreign currencies, converted into pesos using a public exchange rate. There are no simplified invoices for B2C transactions.
Latest Filipino news
January 11, 2018
The Philippines introduced a number of VAT changes on 1 January 2018 as part of a wider tax overhaul...
August 16, 2016
The Philippines is considering raising VAT from 12% to 15% to fund a raise in government expenditure and fund a cut to 25% in the...
May 26, 2016
The Philippines has proposed raising its VAT rate from 12% to 14%. In addition, the government is proposing to widen the goods and services which...
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