Registration of Value-Added Taxpayers

August 27, 1987 REVENUE MEMORANDUM CIRCULAR NO. 38-87 SUBJECT : Registration of Value-Added Taxpayers TO : All Internal Revenue Officers and Others Concerned This Revenue Memorandum Circular is designed to provide information and guidelines on how to comply with the VAT registration requirements, as required under Executive Order No. 273. A. Registration Compliance Requirements 1. Who Shall Register a. Mandatory Every person who, in the course of trade or business, sells goods or renders services subject to the value-added tax (VAT), is required to register as a VAT taxpayer if the amount of his aggregate gross annual sales and/or receipts exceeds P200,000. b. Optional 1) Any person whose transactions are exempt from the value-added tax under subparagraphs A-2, a), b), c), f) and w) below may, at their option, apply for registration. 2) A VAT-registered person may also register any or all of his exempt activities under subparagraphs A-2 a), b), c) and f) below. 2. Who are not Required to Register The following persons whose transactions are either exempt from or are not covered by the value-added tax, are not required to register: cd a) Seller of non-food agricultural, marine and forest products in their original state, if he is the producer himself or the owner of land where such products are produced; b) Seller or importer of agricultural and marine food products in their original state; and livestock and poultry food products of the kind yielding or producing food for human consumption; c) Seller or importer or fertilizers, pesticides and herbicides; chemicals for the formulation of pesticides; seeds, seedlings and fingerlings; fish, animal and poultry feeds; and soya beans and fish meals; d) Seller or importer of petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to excise tax; e) Seller or importer of raw materials to be used by him in the manufacture of petroleum products (except lubricating oil and grease) subject to excise tax; f) Printer, publisher, importer or seller of books and newspaper, magazine, review or bulletin which appears at regular intervals at fixed prices and not principally devoted to advertisements; g) Importer of passenger and/or cargo vessel of more than 10 thousand tons, whether coastwise or ocean-going, including engine and spare parts to be used by him as operator; h) Importer of personal and household effects as a returning resident or non-resident citizen coming to resettle in the Philippines; i) Importer of professional instruments and implements, wearing apparel, domestic animals and personal and household effects coming to settle in the Philippines for the first time for his own use and not for sale; j) Persons whose gross receipts are subject to percentage tax (operators or keepers of hotels, motels, etc.; caterers; common carriers; dealers in securities and lending inventors; banks and non-bank intermediaries; insurance companies; franchise holders; operators of amusement places; and persons liable for the tax on overseas dispatch, message or conversations); k) Agricultural contract growers and miller of palay into rice, corn into grit and sugarcane into raw sugar; l) Persons rendering medical, dental, hospital and veterinary services; m) Duly accredited educational institutions and government educational institutions rendering educational services; n) Artists in the sale of his works of art and similar creations or his services performed for the creation of such works; cdt o) Actors or actresses, talents, singers and emcees; radio and television broadcasters; choreographers; musical, radio, movie, television and stage directors in the performance of their services; p) Professional athletes in the performance of their services; q) Lessors of real property; r) Professionals in the performance of their profession or calling subject to occupation tax under the Local Tax Code (except customs brokers) and registered general professional partnerships; s) Employees under employer-employee relationships; t) Regional or area headquarters of multinational corporations for services rendered to affiliates, subsidiaries or branches in the Asia Pacific Region, which do not earn or derive income from the Philippines; u) Persons whose transactions are exempt under special laws or international agreements; v) Export sellers who are not VAT-registered; w) Persons whose annual sales or receipts derived from otherwise taxable transactions do not exceed P200,000. 3. When to Register a. The following persons shall register on or before October 29, 1987: 1) Those whose gross sales and/or receipts for a 12-month period from September 1, 1986 to August 31, 1987 exceed P200,000. 2) Those who started business after September 1, 1986 who expect to realize gross sales and/or receipts in excess of P200,000 for any 12-month period up to December 31, 1987. aisa dc 3) Those starting business between September 1, 1987 and November 30, 1987 who expect to realize gross sales and/or receipts in excess of P200,000 for their first 12-month period. b) Persons starting business on or after December 1, 1987, who expect their aggregate gross sales and/or receipts to exceed P200,000 for the next 12-month period shall register within thirty days before the start of their business. c) Persons who qualify for optional registration under paragraph A-1 b) hereof, may apply for registration not later than ten days before the beginning of a taxable quarter. 4. How/Where to Register The taxpayer shall accomplish in duplicate the application form for VAT Registration (BIR Form No. 2550-1) and affix his signature in the space provided therefor. The duly accomplished form shall then be filed with the proper Revenue District Officer of the city or municipality where his principal place of business is located, irrespective of whether or not there are branches in other places. 5. Assignment of Taxable Periods All VAT-registered persons shall be divided into three groups to be known as groups A, B and C in accordance with the last digit of the VAT registration number. Those whose VAT registration number ends in 1, 2, 3 and 4 shall be in Group A; 5, 6 and 7, Group B; and 8, 9 and 0, Group C. The taxable quarters of the respective groups shall be as follows: cdt Group End Nos. 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. A 1, 2, 3 & 4 Jan 1-Mar 31 Apr 1-Jun 30 Jul 1-Sep 30 Oct 1-Dec 31 B 5, 6 & 7 Feb 1-Apr 30 May 1-Jul 31 Aug 1-Oct 31 Nov 1-Jan 31 C 8, 9 & 0 Mar 1-May 31 Jun 1-Aug 31 Sep 1-Nov 30 Dec 1-Feb 29/28 In the initial year (1988), however, taxpayers under category "A" will file their return and pay the tax payable on or before April 20. Those under category "B" will file their return on or before May 20 and those under category "C" will file their return on or before June 20, after which, the filing of the return will have to be made regularly within twenty days after each quarter. Illustration: "x" denotes filing date. Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Last Quarter A X X X Jan. 20, 1989 B X X X Feb. 20, 1989 C X X X March 20, 1989 B. Publicity All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) BIENVENIDO A. TAN JR. Commissioner By: (SGD.) VICTOR A. DEOFERIO JR. Deputy Commissioner