ZERO-RATED SALES

Question 1

Purpose of Zero-Rated Sales
• Zero-rated sales are transaction that is subject to VAT (meaning, not included in the enumeration of exempt transaction), however, will not result in any output tax, since the goods or services will not be consumed locally.
• Allows zero rated sellers to be internationally competitive by allowing refund or credit of input tax that are attributable to export sales.
• Adherence to the “Cross Border Doctrine” - no VAT shall be imposed

Question 2

Zero-rated Sale of Goods

Question 3

Zero-rated Sale of Goods

Export sales , which includes:

Answer 3

➢ sale and actual shipment of goods from the Philippine to a foreign country that is payable in acceptable foreign currencies.
➢ Sale of goods, supplies and fuel to persons engaged in international shipping or air transport operations.
➢ Sale of raw or packaging materials to a non-resident buyer for delivery to a local export-oriented enterprise for use in local
production (CREATE MORE)
➢ Sale of goods to an export-oriented enterprise whose export sales is at least seventy percent (70%) of the total annual production
of the preceding taxable year. (CREATE MORE)
➢ Sales to bonded manufacturing warehouses of export-oriented enterprises. (CREATE MORE)

Question 4

Zero-rated Sale of Goods

• Sale of goods to persons or entities whose exemption under special laws or international agreements effectively subject the sale to 0%.

Question 5

Zero-rated Sale of Goods

• Sale of goods to persons or entities that are zero-rated under special laws.

Question 6

Zero-rated Sale of Goods