Formula

VAT = exclusive base × 12%. Ordinary government VAT withholding = exclusive base × 5%. NRDSP B2B withholding = all VAT. Supplier payment = VAT-inclusive total − VAT withheld.

Examples

Ordinary 12% transaction

₱5,000 exclusive + ₱600 VAT = ₱5,600 inclusive. Reverse calculation: ₱5,600 / 1.12 = ₱5,000.

TRANSACTION GUIDE

Read the invoice before choosing the VAT treatment

Exclusive price, inclusive price and the 12% rate

A VAT-exclusive charge of ₱5,000 produces ₱600 VAT and a ₱5,600 inclusive total. To recover the exclusive amount from ₱5,600, divide by 1.12. Subtracting 12% from the inclusive figure would not reproduce the original charge.

Check the invoice description and registration status before treating a payment as VAT-inclusive. The calculator applies the scenario you select; a displayed VAT amount is not evidence that a seller is registered or that the buyer can recover that amount.

References: BIR: VAT on goods and properties, ruling ITAD-027-25

Digital services purchased from a nonresident provider

BIR RR 3-2025 and RMC 47-2025 address VAT on digital services consumed in the Philippines. The circular explains the 12% treatment and the distinction between collection by a provider and reverse charge for business purchases. The digital-service option is a separate scenario, not an extra 12% added on top of domestic VAT.

Identify who is buying the service and who must remit the tax. A subscription invoice, the payment sent abroad and the amount remitted to the BIR should be reconciled separately. The form does not validate a provider registration or decide where a digital service is consumed.

References: BIR RMC 47-2025: digital services and VAT examples

Withholding and input VAT answer different questions

Invoice VAT is the tax associated with the supply. Withholding concerns who remits an amount, while eligible input VAT concerns recovery under the applicable rules. Do not reduce the invoice tax merely because you expect to claim a credit.

When reconciling a government or business payment, use the base specified by the selected field. A percentage of the VAT-exclusive amount is not the same as a percentage of VAT itself. This estimator does not prepare a VAT return, establish documentary entitlement to a credit, or handle every import and exempt transaction. Check the official references for the transaction date before carrying a result into accounting records.

References: Republic Act 12023: services, input VAT and withholding

Informational estimate, not individual tax advice or an official assessment. Methodology and corrections.

Continue with a related calculation

These tools cover other questions in Philippines. Choose the one that matches the amount you want to check:

If you are comparing countries

Open the relevant jurisdiction when comparing a move, an offer or a transaction abroad. Each tool uses its own currency, period and scope; its result should not be substituted into the current calculation.

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Frequently asked questions

How do I remove 12% VAT from an inclusive price?

Divide the inclusive amount by 1.12. The difference between the inclusive and exclusive figures is VAT, subject to rounding.

Does input VAT change what the supplier invoices?

Not automatically. Invoice tax and the buyer’s entitlement to recover input VAT are separate questions.

CHECK THE REFERENCES

Official sources