Question

Determination of VAT Amount

A VAT registered business shows the following records:

Total sales to VAT person 880,000

Total sales to non- VAT person 720,000

Total purchases from VAT person 1,200,000

Total purchases from non-VAT person 300,000

Compute for the following:

1.Output Tax

2.Input Tax

3.Total Sales exclusive of VAT

4.Total Purchases exclusive of VAT

5.VAT payable

Answer the following and explain!
(Taxation in Philippines)

Answer 1

1. Total sales to VAT person 880,000

Add; Total sales to non- VAT person 720,000

Total Vat sales = 880,000+720,000= 1,600,000 (Inclusive of Vat)

Vat rate in phillipines is 12%

Output Tax = 1,600,000*12/112 =171,429

2.

Total purchases from VAT person 1,200,000

Add : Total purchases from non-VAT person 300,000

Total Vat purchases 1,200,000+300,000=1,500,000

Input vat = 1,500,000*12/112 = 160,714

3.Total Sales exclusive of VAT

Total sales minus output vat

1,600,000 - 171429= 1,428,571

4.Total Purchases exclusive of VAT

Total purchases minus input vat

1,500,000 - 160,714 = 1,339,286

5.VAT payable

Out put vat minus input vat = vat payable

171,429 - 160,714 = 10,715