Let's discuss the following concepts relating to VAT: impact/incidence, tax credit method, destination principle, sources of input VAT, persons liable, VAT on sale of goods or services, zero-rated sales (including effectively zero-rated sales), transactions deemed sale, VAT-exempt transactions, and refund or credit of excess input VAT.
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NOTE: VAT exemption threshold on sale of house and lot, and other residential dwellings updated to P3,199,200 from P2,000,000.00 - The VAT exemption threshold for the sale of house and lot packages and other residential dwellings is now at P3,199,200.00 beginning 01 January 2021 under BIR Revenue Regulation 08-2021 dated 11 June 2021, amending RR 04-2021 dated 08 April 2021, which pegged the threshold at only P2 Million beginning 01 January 2021, as provided for under RA No. 10963 - TRAIN Law.
According to RR 08-2021, the previous threshold prior to January 1, 2021 was already at P3,199,200.00 due to the adjustment made using the 2010 consumer price index (CPI) per RR No. 16-2011 dated October 27, 2011. As such, fairness and equity dictate that the VAT-exempt threshold under RA No. 10963-TRAIN Law, of P2,000,000,00 for sale of house and lot and other residential dwellings, should also be adjusted to P3,199,200.00 beginning January 1, 2021.
