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Posted November 21, 2019

Input Tax Allocated Ratably


Input Tax Allocated Ratably

Sec. 4.112-1. RR 13-2018

Where the taxpyer is engaged in both zero-rated or effectively zero-rated sales and in taxable (including sales subject to final withholding VAT) or exempt sales of goods, properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one the transactions, only the proportionate share of input taxes allocated to zero-rated or effectively zero-rated sales can be claimed for refund or issuance of a tax credit certificate. 

In the case of a person engaged in the transport of passenger and cargo by air or sea vessels from the Philippines to a foreign country, the input taxes shall be allocted ratably between his zero-rated sales and non-zero rated sales (sales subject to regular rate, subject to final VAT withholding and VAT-exempt sales).

A VAT-registered person whose registration has been cancelled due to retirement from or cessation of business, or due to changes in or cessation of status under Sec. 106 (c) of teh Tax code may within two (2) years from date of cancellation, apply for the issuamce of tax credit certificate for any unused input tax which he may use in payments of his other internal revenue taxes. 


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