INPUT TAX

Input tax or input VAT refers to the VAT due from or paid by a VAT-registered person on importation or local
purchases of goods, properties, or services, including lease or use of properties in the course of his trade or business.

CREDITABLE INPUT VAT

Not all input VAT paid on purchases is creditable or deductible against output VAT.

Requisites of a creditable input VAT

1. The input VAT must have been paid or incurred in the course of trade or business.
2. The input VAT is evidenced by a VAT invoice or official receipt.
3. The VAT invoice or receipt must be issued by a VAT-registered person.
4. Input VAT is incurred in relation to vatable sales not vatable sales not from exempt sales.

Illustration 1
Mrs. Ancheta had a P 230,000 output VAT in the month. She also made the following purchases during the month:

Goods from non-VAT suppliers P 280,000

Goods from VAT suppliers with VAT invoices 224,000
Importation of car for personal use, VAT inclusive 1,120,000
Importation of grapes and apples for sale 300,000
Importation of merchandise for sale, VAT inclusive 896,000
Services rendered from VAT suppliers, evidenced by ordinary receipts 120,000

The creditable input VAT shall be:

Goods from non-VAT suppliers (224,000 x 12/112) P 24,000

VAT on importation (896,000 x 12/112) 96,000
Total creditable input VAT 120,000

NOTE:
1. The purchase from non-VAT suppliers and purchases on VAT-exempt goods or properties have no input VAT
2. The input VAT on purchases not intended for business (i.e., for personal use) is non-creditable against the output VAT.
3. Input VAT evidenced by an ordinary receipt rather than by a VAT invoice or VAT official receipts is not creditable.

The VAT due on Mrs. Ancheta shall be determined as:

Output VAT P 230,000

Less: Input VAT 120,000
VAT Due 110,000

Exercises: Determine whether or not input tax credit can be availed of (Y/N)
1. Importation of goods for personal use, VAT already paid
2. Importation of goods for business use, VAT not yet paid
3. Purchase on account of domestic goods from VAT-registered supplier evidenced by VAT invoice
4. Purchase for cash of domestic goods from VAT-registered supplier, evidenced by a receipt printed by
unaccredited printer
5. Purchase of domestic properties from non-VAT seller, evidenced by VAT official receipt
6. Purchase of services from a VAT-registered service-provider, bills already paid
7. Purchase of services from a VAT-registered service provider, bills not yet paid
8. Purchase on account of goods from a non-VAT seller who issued VAT invoice

TYPES OF INPUT VAT

1. Transitional Input VAT
2. Regular Input VAT
3. Amortization of Deferred Input VAT
4. Presumptive Input VAT
5. Standard Input VAT

Page 1 of 10
 6. Input VAT Carry-over

1. TRANSITIONAL INPUT VAT

a) Situations 1. Taxpayers who became VAT-registered persons upon exceeding the minimum turnover of
where P3,000,000 in any 12-month period;
transitional 2. Taxpayers who voluntarily register even if their turnover does not exceed P3,000,000
input tax (except franchise grantee of radio and/or television broadcasting whose threshold is
may be P10,000,000);
allowed
b) Basis of Beginning inventory of goods, materials and supplies (excluding those that are VAT-exempt
transitional under Sec. 109)
input tax
c) Amount of 2% of the value of the beginning inventory on hand or actual VAT paid on such goods, materials
transitional and supplies, whichever is higher.
input tax
The value allowed for income tax purposes on inventories shall be the basis for the computation
of the 2% transitional input tax, excluding goods that are exempt from VAT under Sec. 109 of
the Tax Code. (RR 62-2005)
d) Timing of The transitional input VAT shall be claimed in the month of registration as a VAT taxpayer.
Credit of
Transitional
Input VAT

e) Requisites a. The taxpayer must submit an inventory list of goods.

for Claim of b. The taxpayer must prepare an entry recognizing the transitional input VAT credit in his
Transitional accounting books.
Input VAT

f) Accounting Transitional Input VAT P xxx

entry to Beginning Inventory P xxx
record To record the transitional input VAT
transitional
input VAT

Illustration 1
A taxpayer is engaged in VAT-subject transactions but enjoys exemption from VAT as an entity because his annual
gross sales do not exceed the VAT threshold amount. Beginning the current year, he decides to optionally register
under the VAT system. Compute the transitional input tax based on the following data:

Ending inventory VAT-subject goods, previous year

Cost P 250,000
Net realizable value 200,000

Ending inventory VAT-exempt goods, previous year

Cost 1,400,000
Net realizable value 1,450,000

Actual VAT paid on the inventory 30,000

2% of beginning inventory (200,000 x 2%) 4,000

Actual VAT in beginning inventory 30,000
Transitional Input VAT (HIGHER) 30,000

Illustration 2
Batangas General Merchandise, Inc. exceeded the VAT threshold in June 2021. It had the following inventory of
goods at the start of July 2020.

Frozen meat, eggs and dried fish P 40,000

Fruits and vegetables 50,000
Grocery items (all from Non-VAT suppliers) 22,400
Appliances (from non-VAT suppliers) 30,000
Page 2 of 10
 Total beginning inventory 142,400

Actual VAT (22,400 x 12/112) 2,400

Vatable beginning inventory:
Grocery (22,400-2,400) 20,000
Appliances 30,000
Total 50,000
Multiply by: 2%
2% of beginning inventory 1,000

Transitional Input VAT (HIGHER) 2,400

2. REGULAR INPUT VAT

The regular input VAT is the 12% VAT paid on:
a. Domestic purchase of goods, services, or properties, or
b. Importation of goods or service

Timing of Credit of Regular Input VAT

Source of Regular Input VAT Timing of Credit
Purchase of goods or properties In the month of purchase
Purchase of services In the month paid
Importation of goods In the month VAT is paid
Purchase of depreciable capital goods or properties: *
-General Treatment In the month of purchase
-When the monthly aggregate acquisition cost exceeds Amortized over useful life in the months or 60
P 1,000,000 months, whichever is shorter
Purchase of non-depreciable vehicles and on maintenance Not creditable (RR12-2012)
incurred thereon

Illustration 1: Input VAT on goods

In March 15, 2021, CDE Company purchased goods worth P40,000, exclusive of VAT. CDE Company paid the invoice on
April 28, 2021.

The P4,800 input VAT (40,000 x 12%) shall be claimed in March, not in April.

Illustration 2: Input VAT on service

In March 2021, CDE Company retained the services of a professional practitioner who billed P168,000 inclusive of VAT.
CDE Company paid the invoice in April 2021.

The P18,000 input VAT (168,000 x 12/112) shall be claimed in April, not in March.

Illustration 3: Input VAT on importation

In March 2021, CDE Company imported goods with a total landed cost of P200,000. CDE Company paid the P24,000 VAT
on importation and withdrew the goods on April 2021.

The P24,000 input VAT shall be claimed in April, not in March.

Exercise:
A VAT-registered taxpayer is also engaged in VAT-exempt transactions. The following VAT exclusive data are made
available:
a. Domestic VAT-subject cash sales P1,000,000
b. VAT-exempt sales on account 500,000
c. Export cash sales 300,000
d. Cash purchases of supplies from VAT supplier (used for all transactions) 150,000
e. Purchase on account of merchandise from VAT-registered trader (for VAT sales only) 200,000

Page 3 of 10
 Required:
a. Prepare the necessary journal entries assuming the taxpayer will use the input tax on zero-rated sales as input tax
credit.
Account Titles Debit Credit

b. Compute the VAT payable assuming the taxpayer will use the input tax on zero-rated sales as input tax credit.

*INPUT VAT ON PURCHASE OF CAPITAL GOODS OR PROPERTIES (Under RR 16-2005)

a) Meaning of capital goods or Capital goods or properties refers to goods or properties with estimated useful
properties life greater than one (1) year and which are treated as depreciable assets under
the Tax Code, used directly or indirectly in the production or sale of taxable
goods or services.
b) Where a VAT-registered person i) Estimated useful life is 5 years or more - Input tax shall be spread evenly over
purchases or imports capital goods, of a period of 60 months to commence in the calendar month when the capital
which are depreciable assets for good is acquired.
income tax purposes, the aggregate ii) Estimated useful life is less than 5 years – Input tax shall be spread evenly on
acquisition of which (exclusive of a monthly basis by dividing the input tax by the actual number of months
VAT) in a calendar month exceeds comprising the estimated useful life. The claim for input tax shall commence in
P1,000,000, regardless of the the calendar month the capital good is acquired
acquisition cost of each capital good
The input VAT to be amortized is called the “Deferred input VAT” (3)
c) Where the aggregate acquisition The total amount of input taxes will be allowable as credit against output tax in
cost (exclusive of VAT) of the existing the month of acquisition.
or finished depreciable capital goods
purchased or imported during any
calendar month does not exceed
P1,000,000
d) Amortization allowed until The amortization of the input VAT shall only be allowed until December 31, 2021
December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or
imported shall be allowed to apply the same as scheduled until fully utilized.

In the case of purchase of services, lease or use of properties, the input tax shall
be creditable to the purchaser, lessee or licensee upon payment of the
compensation, rental, royalty or fee.
e) Meaning of monthly aggregate The aggregate acquisition cost of a depreciable asset in any calendar month
acquisition cost refers to the total price, excluding the VAT, agreed upon for one or more assets
acquired and not on the payments actually made during the calendar month.
Page 4 of 10
 An asset acquired in installment for an acquisition cost of more than P1,000,000,
excluding the VAT, will be subject to the amortization of input tax despite the
fact that the monthly payments or installments may not exceed P1,000,000.
f) Sale or transfer of depreciable If the depreciable capital good is sold or transferred within a period of 5 years
good within a period of 5 years or prior to the exhaustion of the amortizable input tax thereon, the entire
or prior to the exhaustion of the unamortized input tax (deferred input tax) on the capital goods sold or
amortizable input tax transferred can be claimed as input tax credit during the month or quarter when
sale or transfer was made.

Illustration 1
FGH Corp. acquires 3 units of office equipment at P600,000 each on February 2018. The estimated life is 4 years.

Questions:
1 – Can the taxpayer amortize the input tax?
Yes
2 – If it can amortize the input tax, how much is the monthly amortization?
P 4,500 (216,000/48 months)
3 – Up to what month will the amortization be?
January 2022
4 – Assuming the taxpayer acquires the office equipment on February 2022, can it amortize the input tax on the
acquisition?
No

Illustration 2
A taxpayer acquires an office furniture on January 2018 for P1,000,000. Its estimated life is 3 years.

Questions:
1 – Can the taxpayer amortize the input tax?
No, it did not exceed P 1,000,000
2 – If he can amortize the input tax, how much is the monthly amortization?
None

Special Rules on Input Tax Credit

1) Input Tax Credit on a. Only one vehicle for land transport is allowed for the use of an official or employee, the
Vehicles, and Other value of which should not exceed P2,400,000.
Expenses Incurred (RR b. No depreciation shall be allowed for yachts, helicopters, airplanes and/or aircrafts, and
No. 12- 2012, Oct. 12, land vehicles the value of which exceed the P2,400,000 threshold amount, unless the
2012) taxpayer’s main line of business is transport operations or lease of transportation
equipment and the vehicles purchased are used in said operations;
c. All maintenance expenses on account of non-depreciable vehicles for taxation
purposes are disallowed in its entirety;
d. The input taxes on the purchase of non-depreciable vehicles and all input taxes on
maintenance expenses incurred thereon are likewise disallowed for taxation purposes.
2) Input tax on Construction in progress (CIP) is the cost of construction work which is not yet completed.
construction in This is the accumulated progress billing of the contractor for the extent of completion on
progress an asset under construction. CIP is not depreciated until the asset is placed in service.
Normally, upon completion, a CIP is reclassified and the reclassified asset is capitalized
and depreciated.

a) CIP is considered, for purposes of claiming input tax, as a purchase of service, the value
of which shall be determined based on the progress billings.
b) Until such time the construction has been completed, it will not qualify as capital goods
as defined, in which case, input tax credit on such transaction can be recognized in the
month the payment was made; Provided, that an official receipt of payment has been
issued based on the progress billings
Contract for the sale of In case of contract for the sale of service where only the labor will be supplied by the
service where only the contractor and materials will be purchased by the contractee from other suppliers, input
labor will be supplied tax credit on the labor contracted shall still be recognized on the month the payment was
made based on the progress billings while input tax on the purchase of materials shall be
recognized at the time the materials were purchased.
Page 5 of 10
 3) Input VAT on purchase The output VAT appearing in every billing statement of the seller at every installment
of real property on which the buyer is obliged to pay is the Input VAT claimable by the buyer. The buyer can
installments also claim the input VAT in the same period as the seller recognizes the output VAT (Sec.
3 RR4-2007)
4) Input VAT on goods or The claimable input VAT on goods or properties previously deemed sold shall be the
properties deemed portion of the output VAT imposed upon the goods deemed sold which corresponds to
sold the goods purchased by the buyer.

Illustration 1
Ina Group imports motor vehicle for land transport on December 2021. Its total landed cost is P2,400,000. The estimated
life of the vehicle is 6 years.

Questions
1 – Can the taxpayer amortize the input tax?
Yes. Because the aggregate acquisition cost exceeds P1,000,000 but does not exceed P2,400,000.
2 – If he can amortize the input tax, how much is the monthly amortization?
P 4,800 (2,400,000 x 12%= 288,000/60 months)
3 – Up to what month will the amortization be?
Up to November 2026
4 – Assuming, he imports the vehicle on December 2022, can he amortize the input tax on the importation?
No. The input tax shall be claimed outrightly. The amortization of the input VAT shall only be allowed until
December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported
shall be allowed to apply the same as scheduled until fully utilized.

Illustration 2
In January 2020, JKL Corporation hired the services of Mina Corporation to build a small sales building at an P11,200,000
fixed price contract price inclusive of VAT. The construction was subject to 10% retention which would be released upon
completion.

The following quarterly data in 2020 relates to the project:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
Quarterly billing P 2,240,000 P 4,480,000 P 3,360,000 P 1,120,000 P 11,200,000
Payments 2,016,000 4,032,000 3,024,000 2,128,000 11,200,000

The input tax claimable in each quarter shall be computed from the payments, not from the progress billing or
“construction in progress” account. Thus,

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Payments P 2,016,000 P 4,032,000 P 3,024,000 P 2,128,000
Multiply by: 12/112 12/112 12/112 12/112
Claimable input VAT P 216,000 P 432,000 P 324,000 P 228,000

4. PRESUMPTIVE INPUT VAT

a) Persons allowed to 1) Processors of sardines, mackerel and milk
claim presumptive input 2) Manufacturers of refined sugar and cooking oil
tax 3) Manufacturers of packed noodle-based instant meals

Mnemonics: Sa MaMI Co PaRe

(Sardines, Mackerel, Milk, Cooking Oil, Packed Noodles and Refined Sugar)
b) Rate and basis of 4% (used to be 1 ½%) of gross value in money of purchases of primary agricultural products
presumptive input tax which are used as inputs to their production.

Exercises: Determine whether or not the following can avail of the presumptive input tax (Y/N)
a) Processor of sardines on its purchase of tomatoes, onions and other agricultural products used as inputs in
the production.
b) Processor of sardines on its purchase of fresh fish to be used in the production of processed sardines
c) Processor of fruits on its purchase of fresh fruits to be used in processing canned fruits
d) Manufacturer of refined sugar on its purchase of packaging materials and labels

Page 6 of 10
 e) Manufacturer of cooking oil on its purchase of copra
f) Manufacturer of instant champorado on its purchase of glutinous rice to be used in manufacturing instant
champorado

Illustration 1: Processor of cooking oil

NOP Oil Corporation, a VAT-registered cooking oil manufacturer, purchased the following materials and supplies in the
processing of cooking oils during the month:
Cost Input VAT
Copra P 1,200,000 -
Hexane solvent 50,000 P 6,000
Cans and bottle containers 200,000 24,000
Sodium hydroxide/carbonate 80,000 9,600
Activated carbon 100,000 12,000
Total P 1,630,000 P 51,600

During the month NOP Oil Corporation produced 1,000 cans and 1,500 bottles of cooking oils and sold 800 cans and 1,200
bottles to various wholesalers for P 2,800,000.

The presumptive input VAT shall be P 1,200,000 x 4%; hence, P 48,000.

Assuming that there are no other sources of input VAT, the VAT payable for the month shall be computed as:

Output VAT (2,800,000 x 12%) P 336,000

Less: Input VAT
Regular input VAT P 51,600
Presumptive Input VAT 48,000 99,600
VAT Payable P 236,400

Illustration 2: Processor of sardines

Ligo Corporation processes hot chili-flavored sardines. During the month, Ligo purchased the following ingredients for the
processing of canned sardines.
Cost Input VAT
Fresh sardines P 800,000 -
Hot Chili 50,000 -
Tomatoes 400,000 -
Ordinary salt 20,000 -
Tin can 120,000 P 14,400
Labels 60,000 7,200

The presumptive input VAT shall be computed from the agricultural purchases as follows:

Hot Chili P 50,000

Tomatoes 400,000
Ordinary salt 20,000
Total agricultural purchases P 470,000
Multiply by: 4%
Presumptive Input VAT P 18,800

5. STANDARD INPUT VAT (as updated by RMC No. 36-2021)

Standard input tax is no longer applicable beginning 1 January 2021 in accordance with Section 4-114-2 of Revenue
Regulations No. 13-2018 as further implemented by Revenue Memorandum Circular No. 036-2021.

Withholding VAT
Transactions Withholding Agent Withholding VAT Rate
1. Purchase of goods by Government or any of its political subdivisions, 5% (used to be 3%) of gross
Government, political instrumentalities or agencies, including payment made (creditable)
subdivisions, etc. government-owned or controlled corporations
(GOCCs)
Page 7 of 10
 2. Purchase of services by Government or any of its political subdivisions, 5% (used to be 6%) of gross
Government, political instrumentalities or agencies, including GOCCs payments (creditable)
subdivisions, etc.
3. Payments for lease or use of Government or any of its political subdivisions, 12%
properties or property rights to instrumentalities or agencies, including GOCC’s;
non-resident owners
Private corporations, individuals, estate and
trusts, whether large or non-large taxpayers

Payor or person in control of the payment

4. Purchase of goods or services Payor-purchaser in the course of trade of 12% of payee’s gross sales or
in the course of trade or business business receipts
(payee-seller has more than one Payee-seller shall execute:
payor-buyer) 1) “Waiver of the Privilege to Claim Input Tax
Credit”, and
2) “Notice of Availment of the Option to Pay the
Tax through the Withholding Process”.
5. Purchase of goods or services Payor-purchaser in the course of trade of 12% of payee’s gross sales or
in the course of trade or business business receipts
(payee-seller has only one payor- Payee-seller shall execute waiver and notice of
buyer for the whole year) availment as in above.

Remittance of withholding VAT

Remittance of withholding VAT The VAT withheld shall be remitted within ten (10) days following the end of the
month the withholding was made.
Remittance Returns and ✓ BIR Form No. 1600-VT – Monthly Remittance Return of VAT Withheld
Certificates ✓ BIR Form No. 2306 – Certificate of Final Tax Withheld (Prior to release of
RMC No. 36-2021)
✓ BIR Form No. 2307 - Certificate of Creditable Tax Withheld at Source

6. INPUT VAT CARRY-OVER

The input VAT carry-over is the excess of the input VAT over the output VAT in a particular month or quarter. It is
the VAT overpayment that appears after tax credits and payments are deducted against the net VAT payable.

Rules on Input VAT carry-over

a. The input VAT carry-over of the prior quarter is deductible in the first month of the current quarter.
b. The input VAT carry-over in the first month of the quarter is deductible in the second month of the quarter.
c. The input VAT carry-over in the second month of the quarter is not deductible to the third month of the quarter.
d. The input VAT carry-over of the prior quarter is deductible in the third month quarterly balance of the present quarter.

WHAT ARE EXCLUDED FROM INPUT VAT CARRY-OVER?

1. Advanced VAT which have been applied for a tax credit certificate.
2. Input VAT attributable to zero-rated claim which have been applied for a tax refund or tax credit certificate.
3. Input VAT attributable to zero-rated sales that expired after the two-year prescriptive period.

Advance Payment of VAT

Transactions requiring advance 1) Sale of refined sugar (RR No. 29-2002)
payment of VAT 2) Sale of flour (RR No. 29-2003)
3) Transport of Naturally Grown and Planted Timber Products (RR No. 13-2007)
4) Sale of jewelry, gold and other metallic minerals (RR No. 5-2013)
Advance payment of VAT The advance payments made by the seller/owner of refined sugar, importer or
allowed as credit against output miller of wheat/flour and sellers/ owners of naturally grown and planted timber
tax products shall be allowed as credit against their output tax on the actual gross
selling price of refined sugar/flour/timber products.
Advance payments may be Advance payments which remain unutilized at the end of the taxpayer’s taxable
available for issuance of tax year where the advance payment was made, which is tantamount to excess
credit certificate (TCC) payment, may, at the option of the owner/seller/taxpayer or
importer/miller/taxpayer, be available for the issuance of TCC upon application
Page 8 of 10
 duly filed with the BIR by the seller/owner or importer/miller within two (2) years
from the date of filing of the 4th quarter VAT return of the year such advance
payments were made, or if filed out of time, from the last day prescribed by law for
filing the return.
Advance VAT payment claimed Advance VAT payments which have been the subject of an application for the
as TCC cannot be carried over issuance of TCC shall not be allowed as carry-over nor credited against the output
tax of the succeeding quarter/year.
Issuance of TCC limited to Issuance of TCC shall be limited to the unutilized advance VAT payment and shall
unutilized advance VAT payment not include excess input tax.
Separate applications required Issuance of TCC for input tax attributable to zero-rated sales shall be covered by a
separate application for TCC following the applicable rules.

Refund of Input Tax

a. Input Tax on Zero-Rated Sales A VAT-registered person whose sales of goods, properties or services are zero-rated
of Goods or Property, etc. or effectively zero-rated may apply for the issuance of a tax credit certificate or
refund of input tax attributable to such sales. The input tax that may be subject of
the claim shall exclude the portion of input tax that has been applied against the
output tax. The application should be made within 2 years after the close of the
taxable quarter when the sales were made.
b. Printing of the word “zero- The Supreme Court has ruled in several cases that the printing of the word “zero-
rated” required rated” is required to be placed on the VAT invoices or receipts covering zero-rated
sales in order to be entitled to claim for tax credit or refund.
c. Other documents may be used In another case, failure of the taxpayer to indicate its zero-rated sales in its VAT
to prove “zero-rated” sale returns and in its official receipts is not sufficient reason to deny its claim for tax
credit or refund when there are other documents from which the court can
determine the veracity of the taxpayer’s claims. (Southern Philippine Power Corp.
vs. CIR, G.R. 179632, Oct. 19, 2011)
d. Unused Input Tax of Person A VAT-registered person whose registration has been cancelled due to retirement
Who Retired or Ceased Business or cessation of business, or due to change in or cessation of status may, within 2
years from the date of cancellation, apply for the issuance of a tax credit certificate
for any unused input tax which he may use in payment of his other internal revenue
taxes. He shall be entitled to a refund if he has no internal revenue tax liabilities.
e. Period of Refund or Tax Credit Refund or tax credit certificate shall be granted within 90 days from the date of
of Input Tax submission of the official receipts or invoices and other documents in support of
the application filed.
Should the Commissioner find that the grant of refund is not proper, the
Commissioner must state in writing the legal and factual basis for the denial.
f. Appeal of full or partial denial “In case of full or partial denial of the claim for tax refund, the taxpayer affected
may, within thirty (30) days from the receipt of the decision denying the claim,
appeal the decision with the Court of Tax Appeals: Provided, however, that failure
on the part of any official, agent, or employee of the BIR to act on the application
within the 90-day period shall be punishable under Section 269.
g. Manner of Giving Refunds Refunds shall be made upon warrants drawn by the CIR or by his authorized
representative without the necessity of being countersigned by the COA Chairman.

Exercise:
Riley Corporation, VAT-registered, has the following transactions during the month of January, 2018:

Domestic sales, exclusive of VAT P 800,000

Importation of goods for sale 240,000
Importation of goods for personal use 100,000
Purchase of office supplies, exclusive of VAT 20,000
Purchase of office equipment, total invoice price (estimated life is 3 years) 1,680,000
Purchase of home appliances for the residence of Riley Corp’s President., gross of VAT 17,920
Payment of services for store repair, contractor not VAT- registered but issued VAT
official receipt (total invoice amount) 33,600
Purchase of services for repainting of store (evidenced by ordinary receipt issued by contractor) 4,480
Purchase of real property to be used as office, VAT not included, purchase price not paid yet 500,000
Purchase of vehicle for land transport and for business use, net of VAT 1,200,000
Payment of maintenance expenses for vehicle for land transport, net of VAT 50,000
Page 9 of 10
Questions:
1 – How much of the VAT on importation can be claimed as input tax credit?

2 – How much of the input tax on purchase of office equipment can be claimed as input tax credit?

3 – Can the passed-on VAT on purchase of vehicle for land transport be claimed as input tax credit? Why or why not?

4 – Can the passed-on VAT by a service contactor who is not VAT registered be claimed as input tax credit?

5 – How much is the total allowable input taxes for the month?

Page 10 of 10