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Author Topic: Official Receipts/Sales Invoice and Delivery Receipts  (Read 11122 times)

biyahera

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Official Receipts/Sales Invoice and Delivery Receipts
« on: August 02, 2008, 03:17:46 am »
Here is my problem: I’m buying these equipments which cost tens of thousands of pesos. When I was talking with one of my prospective equipment suppliers and we discussed about the prices, she mentioned that the prices listed in the quotation are VAT exclusive and asked me if I prefer a delivery receipt (DR) or an official receipt (OR). She said right away if I chose DR, there’s no VAT added to the prices listed in the quotation, but if I chose OR, they will add the 12% VAT to the listed prices.

Being a newbie in business most especially with regards to tax issues and legalities, I asked what are the pros and cons if I chose DR only and if I chose OR/sales invoice. I added that my ultimate objective is to save as much cash as possible but of course, remain legal and clean in all of my operations while doing it. We have a lengthy discussion about this but ultimately here is the summary of the discussion:

Note: I don’t know if the pros and cons listed below are 100% correct or if they are complete. Please guide me if otherwise. Thanks.

If DR only:

Pro: I will save cash on VAT
Con: It will turn out that I just “borrowed” the equipments. So eventually, the equipments I bought can’t be a part of my business assets since I just “borrowed it”


If OR/sales invoice:

Pro: The equipments I bought will be a part of my business assets, thus adding value to the company.
Con:Added expenses on VAT.


Actually, if we’re talking about minimal VAT-only expenses here, I wouldn’t mind paying VAT. But we’re talking about thousands of pesos expense on VAT alone here, adding to the fact that I’m just a newbie in business and want to keep my costs down to a minimum. Anyway, when I asked what is the percentage of her customers who are asking for DR only, she said 50% --- and they are mostly comprised of food service/manufacturing/processing businesses and many of them are MNCs, while the other 50% who ask for ORs/sales invoice are non-food businesses. And when I asked her if it’s legal to ask for DR only, she said yes and “natatawa nga lang daw siya kasi sya pa raw ang tinuruan ng Japanese client nya” with regards to the DR-only thing.

As I said, my ultimate objective is to save as much cash as possible, even on taxes. But of course, if choosing DR only will make my operations illegal, then “wag na lang”. I’d rather pay taxes than to be illegal. But of course, if I can avoid the VAT legally (thru the DR-only thing if it’s legal), then why not?

Honestly, I don’t know if I’m looking at it the right way since I’m not sure if my information (especially with regards to the pros and cons) are accurate/correct and even complete. So I’d really appreciate it if anyone here can give some facts regarding both sides and advice on what to choose.

Thank you very much in advance and God bless!

jessica jinky panes

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #1 on: August 04, 2008, 06:23:45 pm »

Are you a vat registered taxpayer?  If yes, then why are do you have to decide to get a DR when you can deduct the 12% input taxes to your output taxes.

At least, your asset will be correctly recorded.

biyahera

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #2 on: August 05, 2008, 08:49:30 pm »
^ Nope. I'm not VAT registered.

ariel dominguez

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #3 on: August 20, 2008, 06:02:57 pm »
Ultimately, if your objective is to have a clean business - everything recorded properly - you'll have no choice but to pay the VAT. As far as legality is concerned, a VAT-registered business that offers to sell you goods or services without issuing you an invoice/official receipt is breaking the law. Look in any major store, for the orange Notice from the BIR posted somewhere near the cash register. Read it carefully.

That being said, it's a fact of business in the Philippines that many establishments document sales with Delivery Receipts. That way, the sale is off the books. The advantage to the seller is that, well, that income isn't reported. The advantage to the buyer is, no 12% VAT. The disadvantage, however, is that the buyer is unable to legally record the purchase in her books. That is, you spend cash from your business, but you can't legally record that expenditure. So, in the eyes of an auditor, that cash must STILL be with you.

Of course, you can record the purchase anyway, and indicate that you were issued a DR. This can cause all sorts of trouble for you if you're audited, and it will cause even more trouble for the seller - remember the orange notice? Especially if you paid in check form, there's evidence that money flowed from your company to the seller, and the transaction isn't on the seller's books.

You'll notice that large companies will never do this. I believe there is a BIR directive, that the top n corporations (I don't know the number - 1,000 perhaps?) actually WITHHOLD a portion of the amount paid to the seller, to be paid directly by the buyer to the BIR. This is essentially an advance tax on the seller. The effect of this is that BIR has a record of the sale transaction, which they can use in auditing the suppliers of large companies. Since you're starting, you're still under the radar, so to speak, so you may be tempted to take the DR route.

As jessica jinky panes points out, it's a non-issue if you're VAT registered. The way it goes, you collect VAT for anything your business sells. You in turn pay VAT on anything your business buys from VAT-registered suppliers. The VAT you collect, less the VAT you paid, is what you remit periodically to the BIR. It would therefore be in your best interests to buy from VAT registered suppliers. Since you're not VAT registered, basically you lose out on the VAT mechanism when you purchase from VAT suppliers, like in your case. However, you may one day get big enough (and what business owner doesn't dream of that day?) that you'll be REQUIRED to become VAT registered. Any business can choose to become VAT registered at any time; but if your annual gross sales exceeds - I think it's P1.5M - you will be required to register for VAT.

ippattung

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #4 on: August 25, 2008, 10:29:32 pm »
 ;D

obachan

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #5 on: December 16, 2008, 12:56:29 pm »
If  NON-VAT Registered ka, you can show to them your non-vat certificate para hindi ka lagyan ng VAT sa O/R and sales invoice.

jack bearing

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #6 on: December 17, 2008, 09:29:47 am »
If  NON-VAT Registered ka, you can show to them your non-vat certificate para hindi ka lagyan ng VAT sa O/R and sales invoice.


nope, this can't be done. As long na VAT registered ang seller ng goods, kahit Non-VAT registered ang buyer, may VAT yung tinintinda nya, so iso-shoulder yun ng buyer.

in regards sa topic starter, let say makalusot ka sa VAT dahil kamo DR ang ibibigay sa yo ng vendor mo, ang consequence naman nyan ay sa Income Tax mo. Paano mo isa-substantiate ang purchases mo kung DR lang ang hawak mo at ayon sa TAX CODE, isa sa substantiation requirement ay OFFICIAL RECEIPTS. In case ma-audit ka, madi-disallow yang purchases mo na yan at tataas ang income tax deficiency mo. Nililinlang ka lang ng vendor mo at sila ang magbebenipisyo sa transaction na ito dahil una, hindi nila ma-i-i-report yung transaction as SALES sa VAT at INCOME TAX nila dahil walang OFFICIAL RECEIPTS, so bababa yung Taxable Income nila para sa VAT at INCOME TAX.

makotosing

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #7 on: December 21, 2008, 09:29:40 pm »
magdasal naang na di ma audit

apc

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Re: Official Receipts/Sales Invoice and Delivery Receipts
« Reply #8 on: February 07, 2011, 08:35:15 pm »
Anong prof ang pwede ko ipakita kung ang expense ay walang official receipt.  example: ang nag dedeliver ng feeds namin from the distributor to our store ay isang jeep lang (eh alam naman natin walang mga resibo yung mga jeepney driver, paano ko ma claim yung binayad namin sa delivery as an expense?) pwede ba yung temporary resibo na nabibili sa mga bookstore tapos pa sign namin sa jeepney driver?  sayang naman kasi pag hindi namin ma claim kasi ang laki din nababayaran namin sa delivery.

Tanong na rin po, non vat kami pero ang mga supplier namin ay VAt registered.  Mas advantage ba or mas maliit ba mababayaran namin if mgpa register nalang kami as VAt instead of paying the percentage tax? para kasing ang laki ng percentage tax.  example sa 1,450,000 na gross sales (tapos ang binabayarn namin sa supplier ay 1,305,000.  bale income namin ay 145,000 lang),

Kung percentage tax 1,450,000 x 3%= 43,500

kung Vat naman  output VAT =155,357.14 minus input VAt=139,821.43 so ang Vat due ay 15,535.71 lang.  so parang mas advantage ang mag paregister nalang kami as VAT?