VAT Calculator
Add or extract 12% VAT on any price, and see when annual gross sales above ₱3,000,000 require VAT registration in the Philippines. Uses 2026 BIR rates.
Updated October 3, 2026
Calculate your tax
12% VAT on common amounts
A ₱3,200 bill plus 12% VAT is ₱3,584.00. To add VAT, multiply the price by 1.12. To take VAT out of a VAT-inclusive price, divide it by 1.12. The 12% rate is set by NIRC Sec 106(A) for goods and Sec 108(A) for services, as amended by RA 11976.
Adding 12% VAT to a price
| Price before VAT | 12% VAT | Total with VAT |
|---|---|---|
| ₱100.00 | ₱12.00 | ₱112.00 |
| ₱1,000.00 | ₱120.00 | ₱1,120.00 |
| ₱3,200.00 | ₱384.00 | ₱3,584.00 |
| ₱10,000.00 | ₱1,200.00 | ₱11,200.00 |
Taking VAT out of a VAT-inclusive price
| Price paid | Price before VAT | VAT inside |
|---|---|---|
| ₱112.00 | ₱100.00 | ₱12.00 |
| ₱1,120.00 | ₱1,000.00 | ₱120.00 |
| ₱10,000.00 | ₱8,928.57 | ₱1,071.43 |
| ₱22,400.00 | ₱20,000.00 | ₱2,400.00 |
Computed by the calculator above, rounded to the centavo. Price before VAT = price paid ÷ 1.12; VAT inside = price paid − price before VAT.
Next: if your sales pass ₱3,000,000 a year you must register for VAT (NIRC Sec 109(CC), as amended by RA 11976) and file BIR Form 2550Q every quarter. Below that, you pay 3% instead: use the percentage tax calculator. More on which price to quote: VAT-inclusive vs VAT-exclusive pricing.
How it works
The calculator has three modes. Pick one in the first field.
- Add 12% VAT to a price: VAT = price × 0.12, total = price × 1.12. Use it when you quote a VAT-exclusive price.
- Remove VAT from a VAT-inclusive price: price before VAT = amount ÷ 1.12, VAT = amount − price before VAT. Use it to read the VAT inside a receipt.
- Quarterly VAT payable: output VAT on your sales, less input VAT on your purchases, less any excess input VAT carried over and any VAT withheld from you (BIR Form 2307). The result is what you pay on BIR Form 2550Q.
Rules it applies
Rate: 12% of gross sales of goods (NIRC Sec. 106(A)) and of services and leases (NIRC Sec. 108(A)), as amended by RA 11976. Since 2 June 2025, digital services consumed in the Philippines, including those from nonresident providers, are also subject to 12% VAT (RA 12023; RR 3-2025).
Who charges it: sellers whose gross sales pass ₱3,000,000 a year must register for VAT (NIRC Sec. 109(CC), as amended by RA 11976). Below that, non-VAT sellers pay 3% percentage tax instead. Exports are zero-rated (0%), and some sales are exempt, such as agricultural products in their original state.
Filing: VAT is filed and paid every quarter on BIR Form 2550Q, within 25 days after the quarter closes. Quarterly filing has been the rule since 1 January 2023 (RA 10963 Sec. 37, amending NIRC Sec. 114(A)); the monthly 2550M is no longer required.
Excess input VAT: if input VAT is bigger than output VAT, the excess carries over to the next quarter (NIRC Sec. 110(B)). A cash refund or tax credit certificate is only for input VAT on zero-rated sales or on cancellation of VAT registration, and the BIR must decide within 90 days (NIRC Sec. 112(C), as amended by RA 11976).
Getting an accurate result
Check whether a price already includes VAT. Receipts from VAT-registered sellers show it separately. If the price includes VAT, use the remove mode, not the add mode.
Only creditable input VAT counts. Input VAT needs a valid VAT invoice and must relate to your taxable sales. VAT on personal purchases or on exempt sales cannot be credited.
Use the quarter's totals in payable mode, the same period as your 2550Q.
Ways to lower your tax legally
- Claim Input Tax Credits on Capital Equipment
- Capital equipment and machinery used in your business qualify for input tax credit. Ensure you properly document all equipment purchases and maintain VAT invoices. For example, if you purchase manufacturing equipment for ₱500,000, you can credit ₱60,000 in VAT. This cuts your net VAT liability. Legal basis: NIRC Sec. 110(A).
- Use Zero-Rated Exports
- If your business exports goods or services, those sales are zero-rated (0% VAT). You do not charge VAT to customers, but you can still credit all input tax incurred. This creates a refund opportunity. For example, an exporter with ₱1,000,000 in exports and ₱600,000 in purchases can claim a refund of ₱72,000 (₱600,000 × 12%). Legal basis: NIRC Sec. 106(A)(2)(a) and Sec. 112(A).
- Separate Taxable and Exempt Activities
- If your business has both taxable and exempt operations (e.g., a hospital with taxable canteen sales and exempt medical services), allocate purchases proportionally. Input tax on purchases directly attributable to exempt activities cannot be credited. By carefully tracking which purchases support taxable vs. exempt activities, you get the most creditable input tax. Legal basis: NIRC Sec. 110(A)(3). Example: with 70% taxable and 30% exempt sales, 70% of the input VAT on shared purchases is creditable.
- Maintain Compliant VAT Invoices
- The BIR requires VAT invoices to contain specific information: seller's name, TIN, address, invoice number, date, buyer's details, itemized goods/services, unit prices, and VAT amount. Invoices lacking these details may result in input tax disallowance. By ensuring all suppliers provide compliant invoices, you protect your input tax credits. Legal basis: NIRC Sec. 113, as amended by RA 11976.
- Claim VAT Refunds on Zero-Rated Sales Promptly
- A cash refund or tax credit certificate is available only for input tax attributable to zero-rated or effectively zero-rated sales (such as exports), or for unused input tax upon cancellation of VAT registration. Ordinary excess input tax (from large domestic purchases with no zero-rated sales) is not refundable; it is simply carried over to the next quarter. If you do have zero-rated sales, file your refund claim each quarter rather than waiting, and within 2 years from the close of the quarter. The BIR must act within 90 days. Legal basis: NIRC Sec. 112, as amended by RA 11976.
Frequently asked questions
What is the VAT registration threshold in the Philippines?
You must register for VAT once your gross sales pass ₱3,000,000 a year (NIRC Sec. 109(CC), as amended by RA 11976; the amount is to be adjusted for inflation every three years). From registration you charge 12% VAT on taxable sales and file BIR Form 2550Q every quarter. Below the threshold, you pay 3% percentage tax unless you register for VAT voluntarily.
What is the current VAT rate in the Philippines?
The VAT rate is 12% of gross sales of goods and services (NIRC Sec. 106(A) and 108(A), as amended by RA 11976). Exports and some international sales are zero-rated (0%). Some sales are exempt and carry no VAT, such as agricultural products in their original state. To add 12% VAT, multiply by 1.12; to remove it, divide by 1.12.
Can I claim input tax on all my business purchases?
No. Input tax is creditable only on purchases of goods and services used in your taxable business operations. Purchases for exempt activities, personal use, or non-business purposes do not qualify. For example, VAT on a personal vehicle cannot be credited, but VAT on a delivery truck used in your business can. Certain items like entertainment expenses have limits on input tax credit.
What happens if my input tax exceeds my output tax?
If input tax exceeds output tax, you have excess input tax. Under NIRC Sec. 110(B), ordinary excess input tax is carried over to the succeeding quarter(s); it cannot be cash-refunded. A cash refund or tax credit certificate (NIRC Sec. 112) is available only for input tax attributable to zero-rated or effectively zero-rated sales (claimed within 2 years from the close of the quarter), or for unused input tax upon cancellation of your VAT registration. Where a refund is allowed, the BIR must act on the claim within 90 days (NIRC Sec. 112(C), as amended by the EOPT Act, RA 11976).
How often must I file VAT returns?
VAT returns are filed quarterly using BIR Form 2550Q, due within 25 days following the close of each taxable quarter. This has been the rule since January 1, 2023 (RA 10963 Sec. 37, amending NIRC Sec. 114(A); RMC 5-2023). The old monthly declaration (Form 2550M) is now optional, with no prescribed deadline, per RMC 52-2023, so you no longer need to file it. Late filing of the quarterly return incurs penalties and surcharges.
Are exports subject to VAT?
No. Exports of goods and services are zero-rated (0% VAT). You do not charge VAT to foreign customers. However, you can still credit all input tax incurred on purchases used to produce exported goods. This often results in excess input tax, which you can carry forward or claim as a refund. This treatment encourages export-oriented businesses.
What documents do I need to support my VAT return?
You must maintain VAT invoices for all sales and purchases. VAT invoices must include the seller's name, TIN, address, invoice number, date, buyer's details, itemized goods/services, unit prices, and VAT amount. For refund claims, you also need supporting documents such as purchase orders, delivery receipts, and bank statements. The BIR may request these documents during audits, so keep them for five years.
What is a VAT invoice, and why is it important?
A VAT invoice is a document issued by a VAT-registered seller that shows the VAT charged on a sale. It must contain specific information: seller's name, TIN, address, invoice number, date, buyer's name and TIN (if VAT-registered), itemized goods/services, unit prices, subtotal, VAT amount, and total. Without a compliant VAT invoice, you cannot claim input tax credit. Always request VAT invoices from your suppliers and ensure they are complete and accurate.
Can I claim input tax on purchases made before I registered for VAT?
Generally, no. Input tax is creditable only on purchases made after your VAT registration date. However, if you made purchases in anticipation of registration and registered within a reasonable timeframe, you may be able to claim input tax on those purchases. Consult with the BIR or a tax professional to determine eligibility in your specific situation.
What penalties apply if I fail to file or pay VAT on time?
Late filing or payment adds a 25% surcharge on the unpaid VAT (NIRC Sec. 248(A), as amended by RA 11976) and interest of 12% a year (NIRC Sec. 249). Micro and small taxpayers, with gross sales below ₱20,000,000, pay a 10% surcharge and 6% interest instead (RR 6-2024). It is critical to file and pay VAT using BIR Form 2550Q within 25 days following the close of each taxable quarter. The BIR has no general mechanism to grant an extension for VAT returns, so file on or before the deadline even if you cannot pay in full.
How do I handle VAT on imported goods?
VAT applies to the importation of goods into the Philippines. The VAT is computed on the cost, insurance, and freight (CIF) value plus customs duties. You must pay VAT at the port of entry (Bureau of Customs). However, if you are a VAT-registered business, you can claim the VAT paid on imports as input tax credit on your VAT return, provided the imported goods are used in your taxable business operations.
Are digital services subject to VAT in the Philippines?
Yes. Since June 2, 2025, digital services consumed in the Philippines are subject to 12% VAT under the VAT on Digital Services Act (RA 12023, implemented by RR 3-2025, RR 14-2025, and RMC 47-2025). This covers streaming, cloud services, online advertising, online marketplaces, and software-as-a-service (SaaS). The rules apply to both local providers and nonresident digital service providers (DSPs), who must register with the BIR and charge VAT on sales to Philippine consumers. A VAT-registered business buying digital services for its taxable operations may credit the VAT as input tax.
What is the difference between zero-rated and exempt sales?
Zero-rated sales (primarily exports) are subject to 0% VAT, and you can credit all input tax incurred. Exempt sales (e.g., agricultural products, health services) are not subject to VAT, and you cannot credit input tax on purchases directly attributable to exempt activities. If your business has both types of sales, you must allocate purchases proportionally. Zero-rated sales are more favorable because they allow input tax credit.
Sources & References (4)
Primary sources and the laws, regulations, and official issuances this page relies on. Each citation links directly to the issuing authority’s document.
- Bureau of Internal Revenue. “12% standard VAT rate; output-less-input VAT mechanics; add/remove VAT base.” bir.gov.ph. NIRC Secs. 106(A)/107(A)/108(A) (12% rate, RA 9337) and Sec. 110(B) (VAT payable = output less input). Accessed .
- LawPhil Project (Arellano Law Foundation). “P3,000,000 mandatory VAT registration threshold (gross sales must EXCEED P3M).” lawphil.net. NIRC Secs. 109(1)(CC)/236(G) as amended by RA 10963 (TRAIN); P3M threshold unchanged for 2026 (RA 11976 EOPT CPI adjustment not yet issued). Accessed .
- LawPhil Project (Arellano Law Foundation). “EOPT Act adding the 3-year CPI adjustment mechanism to the VAT threshold.” lawphil.net. RA 11976 (Ease of Paying Taxes Act). Accessed .