Revenue Regulations amending Sections 21 and 23 of Revenue Regulations No. 5-87

September 15, 1989 REVENUE REGULATIONS NO. 06-89 SUBJECT : Revenue Regulations amending Sections 21 and 23 of Revenue Regulations No. 5-87 SECTION 1 . Scope . Pursuant to the provisions of Section 245, in relation to Section 4, both of the National Internal Revenue Code, as amended, these Regulations are hereby promulgated amending Sections 21 and 23 of Revenue Regulations No. 5-87. SECTION 2 . Section 21 (a) of Revenue Regulations No. 5-87 is hereby amended to read as follows: cdt "Sec. 21. Invoicing requirements . Invoices and/or receipts. All VAT-registered persons shall, for every sale of goods or services, issue an invoice or receipt which must show: "1) the VAT registration number of seller; "2) the name, business style, if any, and address of the purchaser, customer or client; "3) date of transaction; "4) quantity, unit cost and description of merchandise or nature of service; "5) If the seller bills the tax as a separate item in the invoice, the amount of gross selling price or gross receipts on which the value-added tax is based. The amount of the value-added tax is determined by multiplying the amount of gross selling price or gross receipts by the rate of tax and the sum of the gross selling price or gross receipts and the value-added tax which the purchaser pays or is obligated to pay to the vendor; "6) If the seller elects not to bill the tax as a separate item in the invoice or receipt, the total amount charged against the buyer; and "7) the word "zero rated" imprinted on the invoice covering sales falling under subparagraphs (c), (e), (f) and (g); and the word "exempt" on sales under subparagraphs (d) and (h) hereof. "Only VAT-registered person can print the VAT registration number in their invoices or receipts. Any invoice bearing the VAT registration number of the seller shall be considered as a "VAT Invoice". Value-added tax, whether indicated as a separate item or not in the "VAT Invoice", shall be allowed as input tax credits to those liable to the value-added tax. All purchases covered by invoices other than "VAT Invoice" shall not be entitled to input tax credits. "The output tax may or may not be billed separately in the invoice or receipt. If the tax was not billed separately in the invoice or receipt, the total amount shown in the invoice or receipt shall consist of the gross selling price or gross receipts, as the case may be, and the amount intended to cover the tax. The seller is obligated to bill separately the tax if required to do so by the buyer. "If the taxable person is also engaged in exempt operations, he should issue separate invoices or receipts for the taxable and exempt operations. A "VAT Invoice" shall be issued only for sales of goods or services subject to Value-added tax imposed in Sections 100 and 102 of the National Internal Revenue Code. However, a BOI-registered pioneer enterprise can consolidate its sales in the VAT invoice and compute the value-added tax in accordance with Section 6(b) of these regulations. The invoice of a BOI-registered enterprise should also indicate the percentage of exemption. "In general, the invoice or receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. However, the invoice or receipt covering the following transactions shall be issued in four (4) copies: "a) sale of goods or services to offices of the national and local government, including government agencies and instrumentalities and government-owned or controlled corporations; "b) sales to VAT persons whose transactions are subject to zero-rate; "c) sales to persons or entities whose exemptions under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero-rate under Sections 100 and 102 of the National Internal Revenue Code; "d) sales by a pioneer enterprise registered with the Board of Investments as of August 1, 1986, whether totally or partially exempt, to a VAT-registered person; "e) sales of merchandise to enterprises of the Export Processing Zone Authority; "f) sale of raw materials to export-oriented BOI registered enterprises whose export sales exceed seventy percent of total annual production RR 2-88); "g) sale of raw materials to non-resident buyer for delivery to a resident local export-oriented BOI-registered enterprise (RR 2-88); and "h) exempt service of BOI-registered subcontractors and/or contractors performing processing, converting or manufacturing goods for a BOI-registered exporter who exports at least seventy percent of its total production (RR 2-88). "The 1st and 2nd copies shall be given to the buyer and the 3rd and 4th copies to be retained by the seller. The 2nd copy shall be attached to the VAT return to be filed by the buyer and the 3rd shall also be attached to the VAT return to be filed by the seller. The original copy shall be presented by the grantee of refund or tax credit certificate to be cancelled by the issuing internal revenue officer prior to the case of government offices-buyers, the 2nd copy of the invoice shall be submitted to the Revenue District of the city or municipality where the said government is located within 15 days following the end of each calendar quarter pursuant to Memorandum Order No. 219 of the President of the Republic of the Philippines dated February 13, 1989. SECTION 3 . Section 23 of Revenue Regulation 5-87 is hereby amended by adding a new paragraph (c) to read as follows: "(c) Summary lists . Except as herein otherwise provided, every person liable for the value-added tax, whose gross aggregate sales and receipts exceed P2,500,000.00 a quarter, shall attach to his return a summary of his sales and purchases in separate lists. However, operators of supermarkets, department stores and other sellers of goods and services to last consumers may submit only the list of purchases of goods and services. The list must show the name, address and VAT number of each of his buyer and supplier and the amount of his sales and purchases by totals per buyer or supplier. SECTION 4 . Effectivity . These Regulations shall take effect on the 1st day of January, 1990. (SGD.) VICENTE R. JAYME Secretary of Finance Recommending Approval: (SGD.) JOSE U. ONG Commissioner of Internal Revenue