Transitioning
application for update of registration). Not valid for claim of input tax” shall be stamped on the face of each and every copy thereof, until new registered non-VAT invoices or receipts have been received by the taxpayer. Upon such receipt, the taxpayer shall submit a new inventory list of, and surrender for cancellation, all unused previously-stamped invoices/receipts.
Pursuant to RR 15- 2018, the update of registration from VAT to non- VAT should have been done by 30 April 2018. VATregistered taxpayers who missed that deadline may still update their registration to non-VAT under the existing rules and regulations on and the inventory and cancellation of VAT invoices/receipts under the NIRC, as amended, provided that their gross sales or receipts for the immediately preceding three years do not exceed the P3 million threshold.
Failure to update to non-VAT despite having gross sales or receipts not exceeding P3 million shall still subject the taxpayer to VAT. On the other hand, if the VAT-registered taxpayer whose gross sales did not exceed the P3 million threshold opts to continue its VAT registration, it shall not be entitled to cancel its VAT registration for the next three years.
Given that the VAT-registered taxpayer updated its registration to non- VAT by submitting BIR Form 1905, is it safe to say that the taxpayer already complied with its obligations and should now be
taxability of goods or properties originally intended for sale or use in business, including capital goods, disposed of or existing as of the date of change of status of a person as VAT-registered taxpayer pursuant to Section 4.106-8 of RR 16-2005, implementing Section 106( C) of the NIRC, as further amended by the TRAIN Law.
In accordance with Section 106 of the NIRC, as amended, the taxpayer
will be considered a non- VAT registered person under Section 109 ( 1) ( BB) of the NIRC, as amended, and shall pay a tax equivalent to 3 percent of their gross quarterly sales or receipts, except the following, which shall be exempt from the payment of 3 percent percentage tax:
• Cooperatives
• Self- employed individuals and professionals availing of the 8 percent tax on gross sales