VAT-registered businesses charge 12% on top of the net price and remit the difference between what they collected (output VAT) and what they paid on their own purchases (input VAT). Enter one quarter’s sales either before VAT (exclusive) or as invoiced (inclusive), plus your creditable input VAT, to see exactly what to pay — or carry forward — on BIR Form 2550Q.
How the computation works
- Output VAT = net sales × 12% when your figure is VAT-exclusive. When it’s VAT-inclusive, the VAT portion is amount × 12 ÷ 112 (₱112,000 gross contains ₱12,000 VAT; the net sale is the amount ÷ 1.12).
- VAT payable = output VAT − creditable input VAT. Only purchases supported by VAT invoices or official receipts from VAT-registered suppliers count as creditable.
- Negative? Carry it forward. If input VAT exceeds output VAT, nothing is paid and the excess credits against the next quarters’ output VAT (Section 110(C), as amended by TRAIN). Cash refunds are limited to specific cases such as zero-rated input VAT (Section 112, two-year window).
- Filing: quarterly on BIR Form 2550Q, within 25 days after the quarter’s end — the monthly 2550M was removed by the EOPT Act (RA 11976).
- Registration trigger: gross sales above ₱3M in any 12-month period makes VAT registration mandatory; below that you are non-VAT (3% percentage tax or the 8% option).
Worked example: a VAT-exclusive quarterly sale of ₱500,000 → output VAT ₱60,000, minus ₱25,000 creditable input VAT = ₱35,000 payable on 2550Q. The same quarter with ₱70,000 input VAT pays nothing and carries ₱10,000 forward.
What this calculator does not cover
- Zero-rated and exempt sales (0% export services, exempt transactions) — mixed sellers must allocate input VAT; see our VAT 0% export guide.
- Withholding VAT on government payments and the withholding on SE/local taxes — separate credits on your return.
- Advances and installment sales, bad-arguably-timed recognitions, and VAT on importations (paid at customs).
- Not yet VAT-registered? The ₱3M gatekeeper and the 3%/8% alternatives are compared in our tax regime guide.
Want the full picture?
Our VAT guide walks through registration thresholds, invoicing rules, the input-tax credit, carry-forward mechanics, and the filing calendar — with worked examples.
Read the VAT GuideTaxing the profits, not just the sales?
VAT is a pass-through tax on sales. The tax on your corporation’s net income is separate — 25% (or 20%) with a 2% MCIT floor.
Open the Corporate Income Tax CalculatorFrequently Asked Questions
How is VAT computed in the Philippines?
VAT-registered sellers add 12% on top of the VAT-exclusive price: a ₱100,000 sale carries ₱12,000 output VAT. If the price is VAT-inclusive, the VAT portion is the amount × 12 ÷ 112 — a ₱112,000 gross receipt contains ₱12,000 VAT.
What is the difference between VAT-inclusive and VAT-exclusive?
VAT-exclusive is the net price before VAT is added (the base you multiply by 12%). VAT-inclusive is the full amount the customer pays, which already contains the VAT. To extract the base from an inclusive price, divide by 1.12; the difference is the output VAT.
What happens if my input VAT is bigger than my output VAT?
You pay nothing for the quarter. The excess input VAT is carried forward and credited against output VAT in the succeeding quarters under Section 110(C) of the Tax Code. Cash refunds are generally limited to specific cases, such as unutilized input VAT attributable to zero-rated sales, claimed within two years under Section 112.
When and how is VAT filed?
Since the EOPT Act (RA 11976), the monthly VAT return is gone — VAT-registered persons file BIR Form 2550Q quarterly, within 25 days after the end of each taxable quarter.
Who must register for VAT?
Registration is mandatory once gross sales or receipts exceed ₱3 million in any 12-month period. Below that, sellers are non-VAT and pay the 3% percentage tax (or 8% income tax on gross sales if they elected it) instead.
Is the VAT I collect part of my income?
No. Output VAT is collected in trust for the BIR — it is never income and is not subject to income tax. Conversely, creditable input VAT on purchases is not an expense: it credits against your output VAT rather than reducing your profit.
This calculator provides planning estimates based on the National Internal Revenue Code as amended (12% VAT, TRAIN & EOPT). It is not tax advice — for filing, consult the BIR or a qualified tax professional.