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 supplies of goods, services and imports
 
0%
Reduced Exports; international shipping; passenger transport; renewable energy
 
0% Exempt 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

Tax Point

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.

VAT Invoices

The following information should be included on all VAT invoices to ensure the customer may reclaim the output VAT:

  • Date
  • 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.


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