VAT ON PURCHASE OF FIXED ASSET

mga sir ask lang po..

what is the treatment of INPUT VAT on Purchase of Fixed Asset not held for sale?

shall it be available for tax credit in the current period?

yes. it may be claimed as an input tax credit against your output liability. However, if the aggregate acquisition cost per month of capital goods acquired subject to depreciation for income tax purposes exceeds P 1,000,000.00 ( exclusive of VAT) regardless of the acquisition cost of each capital goods, the related input vat should be spread over 60 months ( 5 years) or its useful life, whichever is shorter. section 8, ra 9337

tama si rolandodvo...if the acquisition cost for the month ng lahat na capital goods subject to depreciation ( like sasakyan, machine, equipment, computer ) will not exceed 1,000,000.00... lahat ng input tax for the said month on the said capital goods will be available as tax credit for the current month.


pero if lahat ng acquisition cost ng lahat na capital goods subject to depreciation mag exceed ng 1,000,000.00 (purchase prices ito, hindi ang amount ng input), i spread ito sya for over 5 years or its useful life if below ng 5 years ( whichever is shorter). meaning , hindi lahat ng input dito sa instances na ito maclaim as input tax credit for the month. ang iba, sa succeeding periods na maclaim as input tax credit.

example: car, 100,000.00 purchase price (4 years useful life)
bulldozer- 1,000,000.00 ( 6 years useful life)

amount of input ng
1. car (i assume na lang natin n 10,714.29 )
2. bulldozer- (107,142.86 ).

for the current month, hindi ito puwede maclaim in full as input tax credit:magkano lang ang input tax credit:

1. car - input niya is 10,714.29 divide mo sya sa 48 months (4 years x 12) kasi mas mababa sya sa 60 months ( 48 months vs. 60 months whichever is shorter)

ang result: only 223.21 pesos lang ma claim as input for the month. (10,714.29/48= 223.21)

2. bulldozer - input niya is 107,142.90 divide mo sya ng 60 months (5 years x 120 ) hindi 6 years x 12 or 72. kasi mas mababa ang 60 months sa 72 months.whichever is shorter e.

ang result: only 1,785.72 pesos lang ang maclaim as input for the month
( 107,142.90 / 60= 1,785.72 pesos per month)

sa above illustration, hindi sya maclaim lahat sa input tax for the month kasi ang total acquisition cost ng capital goods exceeds 1,000,000. ( 100,000 sa car plus 1,000,000 para sa bulldozer= total amount is 1,100,000)

example: car, 100,000.00 purchase price (4 years useful life)
bulldozer- 900,000.00 ( 6 years useful life)

amount of input ng
1. car - lahat ng input tax na 10,714.28 maclaim for the current month
2. bulldozer- (lahat ng input tax na 107,142.86 maclaim for the current month).


ang reason: kasi ang total aggregate cost nila (100,000 plus 900,000.00 ) is hindi mag exceed ng 1,000,000.00. kumbaga, exacto 1,000,000.00 talaga/. kaya wlang limit ang input tax na maclaim for the month

if me ibang tanong about tax, you may email me on my email account....

taxconsultantdavao@yahoo.com.

I HAVE TO CLARIFY MY PREVIOUS ANSWER TO THE QUESTION OF BDM1211

ito iyong tanong ni bdm1211
what is the treatment of INPUT VAT on Purchase of Fixed Asset not held for sale?

shall it be available for tax credit in the current period?


di ko kasi nabigyan ng emphasis iyong tanong niya na IF FIXED ASSET NOT HELD FOR SALE...[u]

I CORRELATE KO ITO SA TANONG NI ELLEN SA AKIN...

ITO ANG TANONG NI ELLEN WHICH IS THE EXACT OPPOSITE OF THE QUESTION NI BDM 1211. SA KAy ELLEN IS HOW ABOUT IF ANG PROPERTY IS HELD FOR SALE. ANO ANG TREATMENT.

ACTUALLY, THE SAME LANG ANG SAGOT NILA. SAME TREATMENT.

ITO ANG TANONG NI ELLEN (FULL NAME WITHHELD)

Sir:

Good morning.

I saw the forum in the interneet regarding the VAT to be claimed in the purchase of fixed asset. My question is, What if the asset purchased is to be held for sale. Actually an auction is being arranged for the sale of the asset which was acquired only last March 2012. The purchase price is around 31 million so the Vat is more than 3 million.

How much VAT is to be claimed for the month of March.

Thank you very much.


ellen


[u][i]

HINDI KO SAGUTIN AGAD ANG TANONG MO: KUMBAGA, MAGLECTURE MUNA AKO NG KONTI.




Assuming that the said fixed asset will be sold on April 2012 at 50,000,000 ( inclusive of VAT), consider the following computation:

Given: Selling price = 50,000,000.00
Purchase Price= 31,000,000.00 ( exclusive ba ito ng VAT o inclusive??)

(if ito iyong nag appear na price per invoice, this is assumed as inclusive of VAT kasi we have this rule na the sales price of
goods/properties should be inclusive of VAT pag dating sa invoice , only that s invoice, i indicate mo iyong Gross, Net and magkano iyong 12% VAT,
kumbaga, me breakdown tayo na ginagawa s resibo.


Input- purchase = get the amount of purchases , exclusive of VAT to determine how much ang input s purchases mo dati
31,000,000 /1.12 = 27,678,571.42
input component= 3,321,428.58


For the month of march, the input recorded for this property was:
3,321,428.58/ 60 months (assuming more than 5 years ang useful life niya= 60 MONTHS ANG I DIVISOR MO KASI WHICHEVER IS SHORTER)
input claimed for the month of march= 55,357.143


*****ang remaining input (3321,428.68-55357.143= 3266071.54) will be spread over the reamining 59 months from April 2012 to the 60th month.


Assuming mabenta iyong property ngayong April 2012...

50,000,000 / 1.12 = 44,642,857.14 (net selling price)
OUTPUT tax 5,357,142.857
less: amortized input for April (55,357.143)
less: unamortized input tax (3,321,428.58- 55,357.143 (march)-55,357.14(april) ( 3,210,714.297)
(see rule 2 below)
NET VAT PAYABLE 2,091,071.417



Consider the following rules:

1. Input tax on depreciable capital goods, the AGGREGATE acquisition of which (net of VAT) in a calendar month exceeds 1,000,000.00 shall be spread evenly over 60 months or their useful life, whichever is shorter.


2. If the capital goods is sold within 5 years or prior to exhaustion from Input VAT thereon, the ENTIRE UNAMORTIZED INPUT VAT on the capital goods sold can be claimed as input tax credit during the month/quarter when the sale was made.

3. there will be no TCC for input on capital goods. Option to apply for refund/tax credit certificate of capital goods has been withdrawn already. (assuming there is no output tax liability lang, as a general rule, puwede ka mag apply sana ng Tax Credit Certificate normally. pero di ho puwede ito if ang excess input is based s capital goods . nawithdraw na itong option na ito)



me i add ako doon s topic na vat on purchase of fixed asset this week. i clarify ko lang iyong tanong niya at sagot ko. kasi me tanong pala sya na how about if ang purchased fixed asset is not held for sale. di ko nakita iyong NOT HELD FOR SALE. although iqualify ko ang sagot at halos pareho lang ang sagot doon, i clarify ko lang.


iyong capital goods (na hindi for sale), pero magfall sa ganitong definition:
1. capital goods/properties refer to goods or properties with estimate useful life greater than 1 year and which are treated as depreciable assets under SEction 34 F of the Tax Code, used directly or indirectly in the production or sale of taxable goods or services, me amortization of input for 60 months/useful life (whichever is shorter).


ito iyong sagot pa rin: pareha pa rin.

answer: although not held for sale , ganun pa rin ang treatment kasi iyong VAt law natin is the consumption type and income type.

ang consumption type, ganito ang rule:
"all input taxes on ALL business PURCHASES (KASALI DITO ANG GOODS/CAPITAL GOODS NOT HELD FOR SALE), including supplies, capital goods or equipment, and services CAN BE CREDITED"

. meaning, lahat ng purchases mo whether held for sale iyong goods na binili mo or hindi, ma credit as input tax . kaya kung ang capital goods di mo ibenta, me input tax pa rin iyan.

ang income type, input tax on capital goods allowed as tax credit is amortized over the depreciable life of the said goods. (income and expense matching principle kumbaga..)

so dapat ang sagot doon s tanong na iyon is:
1. yes . macredit ang input tax kahit iyong property is not held for sale because of the consumption type principle.
2. pero me amortization sya over 60 months or useful life, which ever is shorter kasi nga s income type principle (income vs. expense matching principle)



please let me know if me mali ako. opinion ko lang iyan. paki refer s isang accountant na naga public practice.

pasensya din if medyo hindi organized ang sagot. medyo busy kasi. my apology.

i hope makahelp ito sa u.



sagutin na natin ang tanong mo:
1. How much VAT is to be claimed for the month of March.= ang answer is: input that can be claimed for the month of march= 55,357.143


2. if ibenta ninyo ang property for the month of april= magkano ang input na maclaim:

= april 55,357.143
plus the unamortized cost
( (3,321,428.58- 55,357.143 (march)-55,357.14(april) (3,210,714.297)
total: (3,266,071.44)

sagutin na natin ang tanong mo:
1. How much VAT is to be claimed for the month of March.= ang answer is: input that can be claimed for the month of march= 55,357.143


2. if ibenta ninyo ang property for the month of april= magkano ang input na maclaim:

= april (55,357.143)
plus the unamortized cost
( (3,321,428.58- 55,357.143 (march)-55,357.14(april) (3,210,714.297)
total: (3,266,071.44)

= april (55,357.143)
plus the unamortized cost
( (3,321,428.58- 55,357.143 (march)-55,357.14(april)

(3,210,714.297)
total: (3,266,071.44)

hi ask ko lang po yung amount po ba ng downpayment for capital goods exceeding 1M
pwedeng kunan na ng input vat for month,?

sample po : Unit Price 1,337,500.00
Vat Amt 160,500.00
Total 1,498,000.00

Downpayment : 215,162.58 may input vat na rin po ito?

Thanks po.

Question lang po, in case installment ang purchase and nagdown ng 50% last year nagrecognize ng deferred input vat kasi >1m aggregate cost ng asset, pero hindi naamortize yung input vat duon sa 50% down, then 1yr later nag full payment na, pwede pa po ba iamortize yung deferred input na narecognize dati sa books for the 50% down in addition sa deferred input vat nuong full payment?