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Input Taxes

In: Business and Management

Submitted By jamquintanes
Words 1749
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Input Taxes

1

What are input taxes?
means the VAT due on or paid by a VAT-registered person on various transactions include input taxes which can be directly attributed to transactions subject to the VAT plus a ratable portion of any input tax which cannot be directly attributed to either the taxable, O-rated or exempt activity

2

Who can claim input taxes?
1. Only VAT-Registered persons can claim input taxes (whether subject to 12% or 0% VAT) 2. Some kinds of input taxes may not be claimed by all VAT-registered persons (e.g. transitional and presumptive IT) 3. Input taxes paid on purchases may not be claimed as such if the input taxes are attributable to transactions of the VAT-exempt transactions of the VAT-registered purchaser  e.g. - Input tax on gasoline purchased, to be used for the transport of passengers by land
3

Who cannot claim input taxes?
1. Persons who are not VAT-Registered are never allowed to claim input taxes
 Persons who are not subject to VAT  Persons who may be subject to VAT but are not properly registered*  Persons who are not VAT-Registered but issued VAT receipts* *however, they are subject to output tax

2.

VAT-registered taxpayers on their input tax from purchases related to their VAT-exempt transactions (as previously discussed)
4

How are allowable input tax treated?
Input tax claimed by a taxpayer may be:

1. Deducted against output tax to get VAT due 2. If there is excess under #1, the excess input tax may be: a. Carried over to the next period, or; b. Claimed as a tax refund, or;* c. Used to apply for a tax credit certificate*
*
Generally applies only to input tax from zero-rated sales, input taxes pertaining to sales to private entities at 12% may only be issued a TCC or refunded upon cancellation of VAT Registration

5

What happens to the input taxes which are not allowed to be claimed by the taxpayer?
 They form

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