MANAGEMENT

Detailed explanation-1: -What is a NON-VAT BIR Registered Taxpayer? In general, a BIR Registered NON-VAT taxpayer means that the individual or entity does not have annual gross sales or receipts exceeding the current limit. As of the date of writing, the limit is P1, 919, 500. For the updated amount of limit, you may visit the BIR website.

Detailed explanation-2: -Can you charge VAT if not VAT registered just yet? The answer to this question is no, and the rules are quite clear on this issue. According to the Finance Act of 2008, businesses that issue an invoice showing VAT when they are not registered are liable to pay a penalty up to 100% of the amount shown on the invoice.

Detailed explanation-3: -If you’re VAT-registered, your tax is 12% of VAT payable (output tax-input tax). The output tax is computed from gross sales, while input tax is computed from expenses. If you’re non-VAT registered, your tax is 3% of gross sales.

Detailed explanation-4: -Business tax is a tax imposed on the gross sales or receipts of a VAT or NON-VAT taxpayer. The tax rate ranges from 3% to 12% depending on the tax type, such as VAT or NON-VAT.