How to File BIR Form 2550Q (Quarterly VAT Return)?

By: Hergie Ann De Guzman, CPA

What is VAT?

Value Added Tax (VAT) is an indirect tax which may be shifted or passed on to the buyer of goods, properties or services. The VAT is ultimately passed on to the end consumer of the goods or services. 

Covered Transactions

VAT in the Philippines covers the following transactions:

1. Sales of goods or properties;
2. Importation of goods;
3. Sales of services; and,
4. Lease of properties.

Overview of the Philippine VAT System

The VAT system works in a way that the seller adds a VAT mark-up on its sales (Output VAT), which would be passed on to its buyers. When making purchases, the seller also incurs VAT (Input VAT), as part of the purchase price, which he/she can use as a credit to the Output VAT in the sales. The seller would need to offset the Output VAT and Input VAT. If the Output VAT exceeds the Input VAT, the seller should remit the difference. On the other hand, if Input VAT exceeds Output VAT, the seller has an option to credit the excess input VAT to the succeeding quarters or apply for a VAT Refund.

Compliance

VAT Compliance includes filing the monthly and quarterly using BIR Form 2550M and 2550Q, respectively. 

The Return – BIR Form 2550Q

For this discussion, we’ll focus on the Quarterly VAT Return. Assuming that you wish to file for the Quarter 3 VAT return of the calendar year 2020, you have to follow the following steps in filing:

1. Log in to the Company’s eFPS account or through eBIR Forms (latest version is v7.6.1 as of writing this article, please check from time to time the BIR’s website for the updated version).
2. From the drop down selection, select Form – BIR Form 2550Q (Quarterly Value-Added Tax Return).
3. Fill-out the fields in the form. Below are the details for each field: 

Schedules:

4. Click “Validate” to check any fields not yet filled-out. Should you wish to edit/revise any data entered, click “Edit”.
5. Click on “Submit” to proceed with filing of the return.
6. For eFPS, a Filing Reference Page will appear while for eBIR Form, a pop-up message for successful submission will appear. Print these for your records together with the Tax Return Receipt Confirmation (TRRC) email.
7. Proceed with the payment through any of the following:
   1. For eFPS filers, through eFPS Payment Facilities linked to the company’s online banking system, or,
   2. For eBIR-filers or manual filers, payment through Authorized Agent Banks (AABs) under your Revenue District Office’s (RDO) jurisdiction or through electronic payments such as GCash, Paymaya, Land Bank of the Philippines and Union Bank online payment facilities.

Required Attachment

To complete the quarterly compliance, the taxpayer should also submit the quarterly Summary List of Sales, Purchases, and Importations (SLSPI) through the VAT Reconciliation of Listing for Enforcement (RELIEF). The SLS, SLP, and SLI are submitted by sending the DAT File generated in the VAT RELIEF through BIR eSubmission email. Taxpayers receive a Validation Report which should be the proof of the successful submission. To know more about VAT RELIEF and the SLSPI, you may check this article for detailed discussion.

Deadline for Filing and Payment

The deadline for filing the return and payment of the VAT due thereon and the required attachments is on the 25th day of the month following the close of the quarter. In the example, the deadline (for the 3rd Quarter 2020 VAT) is on October 25, 2020.