In effect, the customer may claim the input tax in relation to the VATable purchases from the third-party provider. For liquidation purposes, the non-VAT acknowledgement receipt must be forwarded to the customer together with the VAT invoice/official receipt issued by the third-party provider.īased on the foregoing, the agent shall not be liable for any output tax on the collection of the reimbursable expenses from the customer except those incurred for the benefit of the agent (e.g. The above-mentioned non-VAT acknowledgement receipt must contain the value of the advanced payments and should include the name of the third-party provider. However, if a VAT invoice/official receipt covering the advanced payments is directly issued by the third-party provider in the name of the customer, the agent should then issue a non-VAT acknowledgement receipt once the customer reimburses him for the advanced payment. Consequently, the agent has the obligation to report the 12% output VAT on the total amount in his VAT return. 09-2006 dated 25 January 2006 on the Value-Added Tax (“VAT”) and Expanded Withholding Tax (“EWT”) implications of such arrangements and duties of one - the agent - tasked by the customer to buy something on behalf of the customer.įor the purposes of VAT, the general rule is that if the VAT invoice/official receipt is issued directly by the agent to the customer, any reimbursable expenses and/or advanced payments including the agent’s fees that are lumped/billed will be subject to VAT. Guidance has been provided by the Bureau of Internal Revenue (“BIR”) in Revenue Memorandum Circular (“RMC”) No. However, it is best that we be reminded of our duties as taxpayers when engaging in this practice. This arrangement is not new to businesses. A common example is when your customer asks you to buy something on his behalf and you have to advance first the funds and later seek reimbursement from him. Duties can also be found in our everyday lives.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |