- VAT in the Philippines is imposed on transactions done in the course of trade or business.
- Incidental transactions are covered by the VAT regime if the main business activity is subject to VAT.
- Isolated transactions may or may not be subject to VAT, depending on their connection to the main business activity.
- In a recent case, the Court declared that VAT can be imposed on occasional or isolated transactions that are incidental to the main business activity.
- For a transaction to be considered incidental, there must be an intimate connection between the transaction and the main business activity.
- The VAT applies to the sale of services in the course of trade or business, including incidental transactions.
- Not all transactions pursued by a taxpayer are treated as incidental for VAT purposes.
- The connection to the main business activity is the important consideration for determining if an activity is incidental and subject to VAT.
Source: businessmirror.com.ph
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
