Philippines Tax Agency Issues Circular Clarifying Output VAT Credit on Uncollected Receivables

The Philippine Bureau of Internal Revenue June 14 issued Revenue Memorandum Circular No. 65/2024, clarifying the output VAT credit on uncollected receivables under the Ease of Paying Taxes Act. The circular includes measures: 1) allowing sellers of goods or services to deduct the output VAT previously paid when related receivables are uncollected; 2) stating that sellers can make deductions in the next quarter following the lapse of an agreed-upon payment period; 3) clarifying that sellers must not claim the VAT component of uncollected receivables as an allowable deduction under Section 34(E) of the Tax Code; 4) explaining that sellers must ...