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VALUE-ADDED TAX (VAT) | PHILIPPINES

Q: Is VAT applicable to all products?

VAT is collected at each production stage, whereas sales tax is only collected at the final sale. This means VAT is added to the price as the product moves through the supply chain, while sales tax is a one-time charge to the consumer.

Q: Is VAT applicable to all products?

No, VAT is not collected on all products in the Philippines. Most goods and services are subject to the standard 12% rate. But some items, like essential food, medical services, education, finance, and exports, are usually exempt from paying VAT.

Q: How to File VAT in the Philippines?

Businesses in the Philippines must register to file VAT if their turnover exceeds the threshold. It’s then necessary to keep accurate and up-to-date records, submit VAT returns on time, claim relevant input tax deductions, and pay any liable VAT on time and in full. This can be done online with the Bureau of Internal Revenue (BIR) or with the help of a qualified tax professional.

Calculate your VAT

Tired of struggling with confusing VAT calculations? Our user-friendly VAT calculator in the Philippines takes the hassle out of your taxes! In just a few clicks, you can get the accurate results you need. QuickBooks makes it possible. Try it today.

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VAT Calculator

Options

VAT-inclusive (Gross)

VAT-exclusive (Net)

Vat rate (Philippines)

12%

Amount ₱

Breakdown

Price Amount: -

VAT Amount: -

Net Amount
(Excluding VAT): -

Gross Amount
(Including VAT): -

What is VAT and how much is it in the Philippines?

VAT (Value-Added Tax) is currently set at 12% in the Philippines. It’s a consumption tax that’s added to the value of goods and services. It's similar to sales tax but differs in that it’s calculated throughout the supply chain, ensuring the tax is applied to the total value added to the product.

How VAT Works

Here’s how VAT is calculated at each stage of the supply chain:

Manufacturer: The manufacturer produces a product and adds VAT to the cost of production.
Wholesaler: The wholesaler then buys the product from the manufacturer and adds VAT to the price they pay.
Retailer: When the retailer buys the product from the wholesaler, they add VAT to the price they paid.
Consumer: Finally, the consumer purchases the product from the retailer. They pay the final price which includes the VAT collected at each stage.

How to Calculate VAT

There are two main ways to calculate VAT in the Philippines. The first is to use the QuickBooks VAT calculator for an easy, fast and accurate answer. The second is to use VAT calculation formulas, which can help you understand how to calculate VAT in greater detail.

VAT Calculation Formula

VAT = Net Price x (VAT Rate / 100)

This is the basic formula for calculating VAT. The net price is the price of the good or service before VAT is added. The VAT rate is the percentage of VAT applied. Remember, in the Philippines, the standard VAT rate is 12%.

How to Deduct VAT?

Do you need to find out the price of goods or services before VAT is added? Here’s the VAT calculation formula you need:

Ex-VAT Price = VAT-Inclusive Price / (1 + VAT Rate)

The VAT rate in the Philippines is 12%, so you would use 1.12 in the formula. For a product priced at ₱120 (inclusive of VAT), the ex-VAT price would be:

₱120 / 1.12 = ₱107.14

Why Use Our VAT Calculator?

Once you understand the fundamentals of VAT calculation formulas, then why not save yourself time and stress with our VAT Calculator in the Philippines? Here are five ways you’ll benefit:

Accuracy

Avoid errors and penalties with precise VAT calculations.

Efficiency

Save time with this quick and easy VAT calculator.

Convenience

Calculate VAT anytime, anywhere with this online tool.

User-friendly

The simple layout makes it easy to use, even for beginners.

Customisation

Adjust the tax calculator for different VAT rates and locations.

VAT Rates in Philippines

VAT in the Phillippines has been at 12% since 2021. This is similar to neighbouring countries, with Japan and South Korea having 10% VAT rates. Singapore has an 8% VAT rate. Businesses can track the VAT rates of their trading partners to optimise their supply chains, manage cross-border transactions and make informed pricing decisions.

Common VAT Questions

Is VAT applicable to all products?

How to File VAT in the Philippines?

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