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openaccountants/skills/philippines-vat.md
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1---
2name: philippines-vat
3description: Use this skill whenever asked to prepare, review, or classify transactions for a Philippines VAT return (BIR Form 2550M/2550Q), classify transactions for Philippine VAT purposes, or advise on VAT registration and filing in the Philippines. Trigger on phrases like "Philippines VAT", "BIR Form 2550", "input VAT Philippines", "output VAT Philippines", "VAT-registered Philippines", "percentage tax Philippines", or any Philippines VAT request. ALWAYS read this skill before touching any Philippines VAT work.
4version: 2.0
5jurisdiction: PH
6tax_year: 2025
7category: international
8depends_on:
9 - vat-workflow-base
10---
11 
12# Philippines VAT Skill v2.0
13 
14---
15 
16## Section 1 — Quick reference
17 
18| Field | Value |
19|---|---|
20| Country | Philippines (Republika ng Pilipinas) |
21| Tax | Value Added Tax (VAT) |
22| Currency | PHP (Philippine Peso / ₱) |
23| Tax year | Calendar year (1 Jan – 31 Dec) |
24| Standard rate | 12% |
25| Zero rate | 0% (exports; services to non-residents; PEZA/BOI-registered enterprises; international transport) |
26| Exempt | Agricultural products (unprocessed), educational services, medical/hospital services, housing below threshold (PHP 3.199M), financial services (some), life insurance premiums, importation of basic necessities |
27| Registration threshold | PHP 3,000,000 per year in gross sales/receipts |
28| Non-VAT (percentage tax) | 3% on gross receipts for non-VAT-registered (< PHP 3M); quarterly Form 2551Q |
29| Tax authority | Bureau of Internal Revenue (BIR) |
30| Monthly return | BIR Form 2550M (due: 20th of following month) |
31| Quarterly return | BIR Form 2550Q (due: 25th of month following quarter end) |
32| Filing portal | EFPS (Electronic Filing and Payment System) — https://efps.bir.gov.ph |
33| Tax invoice | Official Receipt (OR) or Sales Invoice — BIR-registered |
34| TIN | Tax Identification Number (9 or 12 digits) |
35| RDO | Revenue District Office — taxpayer's registered district |
36| Contributor | Open Accountants Community |
37| Validated by | Pending — requires sign-off by a Philippine CPA or tax practitioner |
38| Skill version | 2.0 |
39 
40### Key Form 2550M/Q lines
41 
42| Line | Meaning |
43|---|---|
44| Part I-A | Sales/receipts at 12% (net of VAT) |
45| Part I-B | Zero-rated sales |
46| Part I-C | Exempt sales |
47| Part II | Output VAT at 12% |
48| Part III | Input VAT from domestic purchases |
49| Part IV | Input VAT from importation |
50| Part V | Net input VAT available |
51| Part VI | VAT payable (Part II − Part V) |
52| Part VII | Tax credits/excess credit |
53| Part VIII | Net VAT still due |
54 
55### Conservative defaults
56 
57| Ambiguity | Default |
58|---|---|
59| Unknown rate on a sale | 12% standard |
60| Unknown counterparty country | Domestic Philippines |
61| Unknown export/zero-rate qualification | 12% until evidence confirmed |
62| Unknown business-use % (vehicle, phone) | 0% input VAT |
63| Unknown whether Official Receipt compliant | No input credit |
64| Unknown B2B vs B2C for digital services | 12% domestic |
65| Unknown PEZA status | Not zero-rated until certificate confirmed |
66 
67### Red flag thresholds
68 
69| Threshold | Value |
70|---|---|
71| HIGH single transaction | PHP 500,000 |
72| HIGH tax delta on single default | PHP 60,000 |
73| MEDIUM counterparty concentration | >40% of output or input |
74| MEDIUM conservative default count | >4 per period |
75| LOW absolute net VAT position | PHP 200,000 |
76 
77---
78 
79## Section 2 — Required inputs and refusal catalogue
80 
81### Required inputs
82 
83**Minimum viable** — bank statement for the period in CSV, PDF, or pasted text. TIN and confirmation of VAT registration (Certificate of Registration — COR, BIR Form 2303).
84 
85**Recommended** — Official Receipts (ORs) or Sales Invoices for all output VAT, supplier ORs/invoices for all input VAT claimed, prior period excess credit.
86 
87**Ideal** — complete sales/purchase journal, import entries, prior quarterly return, EFPS filing confirmation.
88 
89**Refusal if minimum missing — SOFT WARN.** No bank statement = hard stop. "Input VAT credits require BIR-registered Official Receipts (OR) or Sales Invoices from VAT-registered suppliers. All credits are provisional pending receipt verification."
90 
91### Refusal catalogue
92 
93**R-PH-1 — Non-VAT (percentage tax) taxpayer.** "Businesses below the PHP 3M threshold pay percentage tax (3% of gross receipts) via Form 2551Q, not VAT. They cannot register ORs for VAT and cannot recover input VAT. This skill covers VAT-registered businesses only."
94 
95**R-PH-2 — PEZA/BOI zero-rating complex structures.** "PEZA-registered enterprises have specific zero-rating rules for sales within the ecozone. If the client sells to a PEZA entity and claims zero-rating, verify the PEZA certificate — if complex, escalate to a Philippine CPA."
96 
97**R-PH-3 — Partial exemption with mixed supplies.** "If the business makes both taxable and exempt supplies and cannot directly attribute input VAT, an allocation is required. Out of scope without the annual ratio — escalate."
98 
99**R-PH-4 — Withholding VAT (Final Withholding VAT).** "Certain transactions (e.g., payments by government, non-residents) are subject to final withholding VAT. If significant government contracts exist, track separately — escalate to a CPA."
100 
101**R-PH-5 — Digital service providers (non-residents).** "Non-resident digital service providers with Philippine consumption must register for VAT under the Digital Economy Taxation Act. Out of scope for domestic filers."
102 
103---
104 
105## Section 3 — Supplier pattern library
106 
107Match by case-insensitive substring on counterparty name or reference. Most specific match wins. Fall through to Section 5 if no match.
108 
109### 3.1 Philippine banks — fees and charges (exempt / exclude)
110 
111| Pattern | Treatment | Notes |
112|---|---|---|
113| BDO UNIBANK, BANCO DE ORO | EXCLUDE (fee lines) | Financial service — VAT exempt |
114| BANK OF THE PHILIPPINE ISLANDS, BPI | EXCLUDE (fee lines) | Same |
115| METROBANK, METROPOLITAN BANK | EXCLUDE (fee lines) | Same |
116| UNIONBANK OF THE PHILIPPINES | EXCLUDE (fee lines) | Same |
117| SECURITY BANK | EXCLUDE (fee lines) | Same |
118| LANDBANK OF THE PHILIPPINES, LBP | EXCLUDE (fee lines) | Same |
119| PHILIPPINE NATIONAL BANK, PNB | EXCLUDE (fee lines) | Same |
120| CHINA BANKING, CHINABANK | EXCLUDE (fee lines) | Same |
121| RCBC, RIZAL COMMERCIAL BANKING | EXCLUDE (fee lines) | Same |
122| GCASH, G-XCHANGE (GXI) | EXCLUDE (fee lines) | E-wallet — financial service |
123| MAYA, PAYMAYA | EXCLUDE (fee lines) | E-wallet — financial service |
124| SEABANK | EXCLUDE (fee lines) | Digital bank — financial service |
125| SERVICE CHARGE, BANK FEE, INTEREST | EXCLUDE | Bank charges/interest — exempt |
126 
127### 3.2 Philippine government and statutory (exclude)
128 
129| Pattern | Treatment | Notes |
130|---|---|---|
131| BUREAU OF INTERNAL REVENUE, BIR | EXCLUDE | Tax payment |
132| BUREAU OF CUSTOMS, BOC | EXCLUDE | Customs duty |
133| SOCIAL SECURITY SYSTEM, SSS | EXCLUDE | Social insurance |
134| PHILHEALTH | EXCLUDE | Health insurance |
135| PAG-IBIG, HDMF | EXCLUDE | Housing fund |
136| SEC PHILIPPINES | EXCLUDE | Regulatory fee |
137| LGU, BARANGAY, CITY HALL | EXCLUDE | Local government fee |
138 
139### 3.3 Philippine utilities (taxable at 12%)
140 
141| Pattern | Treatment | Rate | Notes |
142|---|---|---|---|
143| MERALCO, MANILA ELECTRIC | Input 12% | 12% | Electricity (Metro Manila) — taxable |
144| CEPALCO (Cagayan de Oro electric) | Input 12% | 12% | Electricity — taxable |
145| VECO (Visayas Electric) | Input 12% | 12% | Electricity — taxable |
146| MANILA WATER | Input 12% | 12% | Water (East Zone) — taxable |
147| MAYNILAD WATER SERVICES | Input 12% | 12% | Water (West Zone) — taxable |
148| PLDT, PHILIPPINE LONG DISTANCE | Input 12% | 12% | Telecom/internet — taxable |
149| GLOBE TELECOM | Input 12% | 12% | Mobile/internet — taxable |
150| SMART COMMUNICATIONS, SMART | Input 12% | 12% | Mobile — taxable |
151| DITO TELECOMMUNITY | Input 12% | 12% | Mobile — taxable |
152| CONVERGE ICT | Input 12% | 12% | Internet — taxable |
153 
154### 3.4 Transport and logistics
155 
156| Pattern | Treatment | Rate | Notes |
157|---|---|---|---|
158| PHILIPPINE AIRLINES, PAL | Check route | 0%/12% | International 0%; domestic 12% |
159| CEBU PACIFIC | Check route | 0%/12% | International 0%; domestic 12% |
160| AIRASIA PHILIPPINES | Check route | 0%/12% | International 0%; domestic 12% |
161| PHILIPPINE NATIONAL RAILWAYS, PNR | Input 12% | 12% | Rail — taxable |
162| LRT, MRT (Metro Rail Transit) | Input 12% | 12% | Mass transit — taxable |
163| GRAB PHILIPPINES | Input 12% | 12% | Ride-hailing — taxable |
164| ANGKAS | Input 12% | 12% | Motorcycle taxi — taxable |
165| LBC EXPRESS | Input 12% | 12% | Courier — taxable |
166| JRS EXPRESS | Input 12% | 12% | Courier — taxable |
167| DHL PHILIPPINES | Input 12% | 12% | Courier — taxable |
168| FEDEX PHILIPPINES | Input 12% | 12% | Courier — taxable |
169| 2GO EXPRESS | Input 12% | 12% | Courier — taxable |
170| NINJA VAN PHILIPPINES | Input 12% | 12% | Courier — taxable |
171| J&T EXPRESS PHILIPPINES | Input 12% | 12% | Courier — taxable |
172 
173### 3.5 Food and retail
174 
175| Pattern | Treatment | Rate | Notes |
176|---|---|---|---|
177| SM SUPERMARKET, SM MARKETS | Input 12% | 12% | Supermarket — 12% on non-exempt items |
178| ROBINSONS SUPERMARKET | Input 12% | 12% | Supermarket — 12% |
179| PUREGOLD | Input 12% | 12% | Supermarket — 12% |
180| S&R MEMBERSHIP SHOPPING | Input 12% | 12% | Warehouse club — 12% |
181| MERCURY DRUG | Input 12% (medicine) / EXEMPT (prescription) | Mixed | Prescription medicines exempt; OTC/non-medicine 12% |
182| WATSONS PHILIPPINES | Input 12% | 12% | Health/beauty retail — 12% |
183| 7-ELEVEN PHILIPPINES | Input 12% | 12% | Convenience store — 12% |
184| JOLLIBEE (eat-in) | Input 12% | 12% | Restaurant — 12% (food not exempt when eaten in) |
185| MCDONALD'S PHILIPPINES | Input 12% | 12% | Restaurant — 12% |
186 
187### 3.6 SaaS — international suppliers (note: PH now has digital VAT)
188 
189Under the Digital Economy Taxation Act (R.A. 11976, signed 2024), non-resident digital service providers must register for Philippine VAT. For B2B PKP buyers: input credit claimable if the foreign supplier charges and remits 12% VAT.
190 
191| Pattern | Status | Treatment | Notes |
192|---|---|---|---|
193| GOOGLE (Workspace, Ads, Cloud) | Should be registered | Input 12% if charged | Check if Google charges PH VAT on invoice |
194| MICROSOFT (365, Azure) | Should be registered | Input 12% if charged | Same |
195| META, FACEBOOK ADS | Should be registered | Input 12% if charged | Same |
196| NETFLIX | Registered | 12% on subscription | Consumer-facing |
197| ZOOM | Check | Input 12% if charged | Verify registration |
198| SLACK | Check | Input 12% if charged | Verify |
199| NOTION, OPENAI, ANTHROPIC | Check | Flag for verification | Verify PH registration status |
200| AWS | Check | Input 12% if charged | Verify |
201 
202### 3.7 Payment processors (exempt fees)
203 
204| Pattern | Treatment | Notes |
205|---|---|---|
206| PAYPAL (transaction fees) | EXCLUDE | Financial service — VAT exempt |
207| STRIPE (transaction fees) | EXCLUDE | Same |
208| GCASH (transaction fees) | EXCLUDE | Same |
209| PAYMONGO (fees) | EXCLUDE | Payment gateway — exempt |
210| DRAGONPAY (fees) | EXCLUDE | Same |
211 
212### 3.8 Professional services (VAT-registered)
213 
214| Pattern | Treatment | Rate | Notes |
215|---|---|---|---|
216| CPA FIRM, ACCOUNTING FIRM | Input 12% | 12% | Professional services — taxable |
217| LAW FIRM, ATTY, ATTORNEY | Input 12% | 12% | Legal services — taxable |
218| NOTARY PUBLIC | Input 12% | 12% | Notarial services — taxable |
219| ADVERTISING AGENCY | Input 12% | 12% | Marketing — taxable |
220 
221### 3.9 Internal transfers and exclusions
222 
223| Pattern | Treatment | Notes |
224|---|---|---|
225| INTER-ACCOUNT TRANSFER, OWN ACCOUNT | EXCLUDE | Internal movement |
226| LOAN PROCEEDS, LOAN REPAYMENT | EXCLUDE | Loan principal — out of scope |
227| SALARY, PAYROLL | EXCLUDE | Wages — outside VAT scope |
228| DIVIDEND | EXCLUDE | Out of scope |
229| SECURITY DEPOSIT, ADVANCE DEPOSIT | Tier 2 — check | May trigger VAT if applied to taxable supply |
230| ATM WITHDRAWAL, CASH WITHDRAWAL | Tier 2 — ask | Default exclude |
231 
232---
233 
234## Section 4 — Worked examples
235 
236Six classifications from a hypothetical Manila-based IT consultant. Format: BDO Unibank transaction history.
237 
238### Example 1 — Domestic B2B revenue (12%)
239 
240**Input line:**
241`04/15/2025 CREDIT ABC TECH SOLUTIONS INC REF INV-2025-041 PHP 1,120,000.00 PHP 5,000,000.00`
242 
243**Reasoning:**
244Incoming PHP 1,120,000 from a Philippine company for IT consulting. Standard 12% VAT. Gross PHP 1,120,000 includes VAT. Net = PHP 1,000,000 (taxable base) + PHP 120,000 output VAT. A BIR-registered Official Receipt or Service Invoice must be issued. Report on Form 2550M Part I-A.
245 
246**Classification:** Output VAT 12% — PHP 120,000. Net sales: PHP 1,000,000.
247 
248### Example 2 — Zero-rated export service
249 
250**Input line:**
251`04/22/2025 CREDIT ACME CORPORATION USA USD 10,000 (PHP 560,000.00) PHP 5,560,000.00`
252 
253**Reasoning:**
254USD receipt from a US company for IT consulting services rendered to a non-resident. Zero-rated if: (1) service rendered in the Philippines; (2) paid by a non-resident in foreign currency; (3) proceeds inwardly remitted through Philippine banking. Report PHP 560,000 on Form 2550M Part I-B (zero-rated). Output VAT: PHP 0. Confirm: inward remittance documentation held.
255 
256**Classification:** Zero-rated — PHP 560,000. Output VAT: PHP 0.
257 
258### Example 3 — Utility expense (12%, input credit)
259 
260**Input line:**
261`04/10/2025 DEBIT MERALCO April 2025 Electric Bill -PHP 11,200.00 PHP 4,988,800.00`
262 
263**Reasoning:**
264MERALCO electricity bill. Taxable at 12%. Gross PHP 11,200 includes VAT. Net = PHP 10,000 + PHP 1,200 input VAT. MERALCO issues BIR-registered ORs — input credit of PHP 1,200 claimable. Report on Form 2550M Part III.
265 
266**Classification:** Input VAT 12% — PHP 1,200. Net expense: PHP 10,000.
267 
268### Example 4 — International airline (domestic route, 12%)
269 
270**Input line:**
271`04/08/2025 DEBIT CEBU PACIFIC AIR Manila-Cebu ticket -PHP 4,480.00 PHP 4,984,320.00`
272 
273**Reasoning:**
274Domestic flight (Manila to Cebu) on Cebu Pacific. Domestic air transport is taxable at 12%. Gross PHP 4,480. Net = PHP 4,000 + PHP 480 input VAT. Cebu Pacific issues VAT ORs for domestic tickets — input credit of PHP 480 claimable if OR is BIR-registered.
275 
276**Classification:** Input VAT 12% — PHP 480. Net expense: PHP 4,000.
277 
278### Example 5 — Exempt supply received (SSS contribution)
279 
280**Input line:**
281`04/25/2025 DEBIT SOCIAL SECURITY SYSTEM SSS April 2025 -PHP 4,500.00 PHP 4,979,820.00`
282 
283**Reasoning:**
284SSS employer contribution. Government social insurance — EXCLUDE from VAT return entirely. Not a supply of goods or services. No input VAT. This is a payroll-related obligation, not a business expense generating input credit.
285 
286**Classification:** EXCLUDE — outside VAT scope. Statutory employer obligation.
287 
288### Example 6 — Restaurant (12%, no block in Philippines)
289 
290**Input line:**
291`04/12/2025 DEBIT JOLLIBEE FOODS CORP Client lunch -PHP 1,120.00 PHP 4,978,700.00`
292 
293**Reasoning:**
294Client lunch at Jollibee. In the Philippines, there is no absolute block on entertainment/meals input VAT (unlike Malta). Restaurant meals are taxable at 12%. If a BIR-registered OR is obtained, input VAT of PHP 120 is claimable (PHP 1,120 gross / 1.12 = PHP 1,000 net + PHP 120 VAT). However, BIR scrutinises entertainment claims — ensure business purpose is documented. If no OR: no credit.
295 
296**Classification:** Input VAT 12% — PHP 120 (if OR held). Net expense: PHP 1,000. Flag: confirm BIR-registered OR from Jollibee.
297 
298---
299 
300## Section 5 — Tier 1 rules (compressed)
301 
302### 5.1 Standard rate 12%
303 
304Default rate for all taxable supplies of goods and services. Legislation: National Internal Revenue Code (NIRC) Section 106 (goods) and Section 108 (services).
305 
306### 5.2 Zero rate — exports and qualifying supplies
307 
308Zero-rated: export of goods; services rendered to non-residents paid in foreign currency (with inward remittance); services to PEZA-registered entities within ecozones; services to BOI-registered enterprises (specific cases); international transport of passengers and cargo. Evidence: export documentation; inward remittance records; PEZA certificate. Legislation: NIRC Sections 106(A)(2) and 108(B).
309 
310### 5.3 Exempt supplies
311 
312Agricultural products in original state; educational services; medical/hospital services; literary/musical compositions; housing below PHP 3,199,200 (BIR threshold); lease of residential unit below PHP 15,000/month; life insurance premiums; common carriers below threshold; importation of basic necessities. Legislation: NIRC Sections 109.
313 
314### 5.4 Official Receipt (OR) / Sales Invoice requirements
315 
316BIR-registered ORs or Sales Invoices are required for input credit. Must contain: TIN of seller and buyer, BIR-registered serial number, date, description, net amount, VAT rate, VAT amount. Electronic invoices allowed via EFPS-registered providers.
317 
318### 5.5 Input VAT limitations
319 
320Input VAT is not creditable for: entertainment/representation expenses (limited — see Section 6.1); motor vehicles not used exclusively for business; purchases from non-VAT-registered suppliers; purchases without valid ORs.
321 
322### 5.6 Transitional input VAT
323 
324Beginning inventory VAT credit available upon VAT registration (2% of inventory value or actual input VAT on goods for sale, whichever is higher).
325 
326### 5.7 Filing deadlines
327 
328| Return | Period | Due date |
329|---|---|---|
330| Form 2550M (monthly) | Monthly | 20th of following month |
331| Form 2550Q (quarterly) | Quarterly | 25th of month following quarter |
332| Payment | Same as filing | Same deadline |
333 
334### 5.8 Penalties
335 
336| Offence | Penalty |
337|---|---|
338| Late filing | PHP 1,000 per return + 25% surcharge |
339| Late payment | 12% interest per annum on unpaid tax |
340| Failure to issue OR | 50% surcharge on transaction + compromise penalty |
341| Fraud/falsification | 50% surcharge + criminal liability |
342 
343---
344 
345## Section 6 — Tier 2 catalogue
346 
347### 6.1 Entertainment expense input VAT limit
348 
349**What it shows:** Restaurant, hotel, or entertainment expense claimed as business entertainment.
350**What's missing:** Whether BIR-registered OR held and whether expense is within the entertainment deduction limit.
351**Conservative default:** No input credit (treat as personal if OR not confirmed).
352**Question to ask:** "Is there a BIR-registered OR for this entertainment expense? Is this within the 0.5% of net sales / 1% of net revenue entertainment ceiling?"
353 
354### 6.2 Zero-rating for services to non-residents
355 
356**What it shows:** Revenue from a foreign client.
357**What's missing:** Whether payment was received in foreign currency with inward remittance through a Philippine bank.
358**Conservative default:** 12% standard rate.
359**Question to ask:** "Was payment received in USD/foreign currency? Was it remitted through a Philippine bank (with bank credit advice)? Is the client a non-resident foreign company?"
360 
361### 6.3 PEZA zero-rating
362 
363**What it shows:** Sale to a company that may be PEZA-registered.
364**What's missing:** PEZA registration certificate and whether the supply is within the ecozone.
365**Conservative default:** 12% — do not zero-rate without certificate.
366**Question to ask:** "Can the buyer provide their PEZA Certificate of Registration and authority to zero-rate?"
367 
368### 6.4 Digital services — foreign provider VAT status
369 
370**What it shows:** Payment to a foreign tech/SaaS company.
371**What's missing:** Whether the foreign provider has registered for Philippine VAT (post-Digital Economy Act 2024) and whether they are charging 12% VAT on invoices.
372**Conservative default:** No input credit until confirmed.
373**Question to ask:** "Does the invoice from this foreign provider show Philippine VAT (12%) charged? If not, no input credit is available."
374 
375### 6.5 Motor vehicle expenses
376 
377**What it shows:** Vehicle purchase, lease, fuel, or maintenance.
378**What's missing:** Whether vehicle is used exclusively for business.
379**Conservative default:** 0% input credit.
380**Question to ask:** "Is this vehicle registered in the company name and used exclusively for business? Personal-use vehicles and mixed-use vehicles have limited input VAT recovery."
381 
382---
383 
384## Section 7 — Excel working paper template
385 
386```
387PHILIPPINES VAT WORKING PAPER
388Period: ____________ TIN: ____________ RDO: ____________
389 
390A. OUTPUT VAT
391 A1. Taxable sales at 12% (net) ___________
392 A2. Output VAT at 12% (A1 × 12%) ___________
393 A3. Zero-rated sales (exports/non-resident) ___________
394 A4. Exempt sales (net) ___________
395 
396B. INPUT VAT
397 B1. Domestic purchases — 12% (net) ___________
398 B2. Input VAT at 12% (B1 × 12%) ___________
399 B3. Importation input VAT ___________
400 B4. Total input VAT (B2+B3) ___________
401 B5. Disallowed input (blocked items) ___________
402 B6. Net input VAT (B4 − B5) ___________
403 
404C. NET VAT PAYABLE
405 C1. Net VAT (A2 − B6) ___________
406 C2. Excess credit from prior period ___________
407 C3. Tax credits (e.g., CWT, advance payments) ___________
408 C4. Net payable / (refund) (C1−C2−C3) ___________
409 
410REVIEWER FLAGS:
411 [ ] BIR-registered ORs/invoices confirmed for all input credits?
412 [ ] Inward remittance documentation for zero-rated services?
413 [ ] PEZA certificates confirmed for zero-rated sales to ecozone?
414 [ ] Digital service provider VAT registration confirmed?
415 [ ] Motor vehicle input VAT blocked where applicable?
416 [ ] Entertainment ceiling calculated?
417```
418 
419---
420 
421## Section 8 — Bank statement reading guide
422 
423### Common Philippine bank statement formats
424 
425| Bank | Key columns | Date format | Amount |
426|---|---|---|---|
427| BDO | Date, Reference, Description, Debit, Credit, Balance | MM/DD/YYYY | PHP with 2 decimals |
428| BPI | Date, Transaction Reference, Description, Withdrawal, Deposit, Balance | MM/DD/YYYY | PHP |
429| Metrobank | Date, Description, Debit, Credit, Balance | MM/DD/YYYY | PHP |
430| UnionBank | Date, Description, Debit, Credit, Available Balance | MM/DD/YYYY | PHP |
431| Landbank | Posting Date, Description, Debit, Credit, Running Balance | MM/DD/YYYY | PHP |
432 
433### Key Philippine banking terms
434 
435| Term | Meaning | Classification hint |
436|---|---|---|
437| CREDIT / DEPOSIT | Incoming funds | Potential revenue |
438| DEBIT / WITHDRAWAL | Outgoing payment | Potential expense |
439| INWARD REMITTANCE | Foreign currency receipt | Potential zero-rated export |
440| SERVICE CHARGE | Bank fee | Exempt |
441| INTEREST | Bank interest | Exempt |
442| BALANCE | Running balance | Ignore |
443| ATM WITHDRAWAL | Cash withdrawal | Tier 2 — ask |
444| PAYROLL DEBIT | Salary payment | Out of VAT scope |
445 
446---
447 
448## Section 9 — Onboarding fallback
449 
450If the client provides a bank statement but cannot answer all questions immediately:
451 
4521. Classify all transactions using the pattern library (Section 3)
4532. Apply conservative defaults (Section 1)
4543. Mark Tier 2 items as "PENDING — reviewer must confirm"
4554. Generate working paper with flags
456 
457```
458PHILIPPINES VAT ONBOARDING — MINIMUM QUESTIONS
4591. TIN (Tax Identification Number) and RDO (Revenue District Office)?
4602. Certificate of Registration (BIR Form 2303) — VAT registered? What is the effective date?
4613. Filing basis: monthly (2550M) or monthly + quarterly (2550Q)?
4624. Do you have any exports or services to non-resident clients?
463 If yes: was payment received in foreign currency with inward remittance?
4645. Do you have any PEZA-registered customers?
4656. Motor vehicle expenses — are vehicles exclusively for business?
4667. Any international SaaS subscriptions? Do those invoices show 12% Philippine VAT?
4678. Prior period excess input VAT credit carried forward?
468```
469 
470---
471 
472## Section 10 — Reference material
473 
474### Key legislation
475 
476| Topic | Reference |
477|---|---|
478| VAT on goods | NIRC Section 106 |
479| VAT on services | NIRC Section 108 |
480| Zero-rated sales | NIRC Sections 106(A)(2), 108(B) |
481| Exempt transactions | NIRC Section 109 |
482| Input VAT | NIRC Section 110 |
483| Official Receipts | NIRC Section 237 |
484| Registration threshold | NIRC Section 109(BB) (PHP 3M) |
485| Digital economy VAT | R.A. 11976 (Digital Economy Taxation Act, 2024) |
486| Penalties | NIRC Sections 248–249 |
487 
488### Known gaps
489 
490- PEZA zero-rating complex structures — escalate to CPA
491- Final withholding VAT on government transactions — track separately
492- Percentage tax (non-VAT registered) — separate Form 2551Q; different skill
493- Import VAT (Bureau of Customs process) — coordinate with customs broker
494- Digital Economy VAT implementation — verify BIR RMC for latest guidance
495 
496### Self-check before filing
497 
498- [ ] BIR-registered ORs/invoices held for all input VAT claimed
499- [ ] Inward remittance documentation for all zero-rated services
500- [ ] PEZA certificates on file for any PEZA zero-rated sales
501- [ ] Digital service VAT registration confirmed for foreign suppliers
502- [ ] Prior period excess credit correctly applied
503- [ ] Entertainment input VAT within the BIR ceiling
504 
505### Changelog
506 
507| Version | Date | Change |
508|---|---|---|
509| 1.0 | 2024 | Initial release |
510| 2.0 | April 2026 | Full v2.0 rewrite: pattern library, worked examples, Digital Economy Act note, no inline tier tags |
511 
512---
513 
514## Prohibitions
515 
516- NEVER claim input VAT from a supplier who is not BIR VAT-registered
517- NEVER zero-rate services to non-residents without inward remittance documentation
518- NEVER zero-rate PEZA sales without the buyer's PEZA certificate
519- NEVER claim input VAT from foreign SaaS providers without confirming Philippine VAT registration
520- NEVER apply 12% to exempt supplies (unprocessed agriculture, medical, education, etc.)
521- NEVER present calculations as definitive — direct to a Philippine CPA or BIR-accredited tax practitioner
522 
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524 
525## Disclaimer
526 
527This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for errors, omissions, or outcomes. All outputs must be reviewed by a qualified professional before filing.
528 
529The most up-to-date version is maintained at openaccountants.com.
530 

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About

Use this skill whenever asked to prepare, review, or classify transactions for a Philippines VAT return (BIR Form 2550M/2550Q), classify transactions for Philippine VAT purposes, or advise on VAT registration and filing in the Philippines. Trigger on phrases like "Philippines VAT", "BIR Form 2550", "input VAT Philippines", "output VAT Philippines", "VAT-registered Philippines", "percentage tax Philippines", or any Philippines VAT request. ALWAYS read this skill before touching any Philippines VAT work.

PHty-2025

PH skill: