Different Sales Tax Types Overview - Smarter Sales & Inventory Management | Zayls

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Knowledge Base Sales | Different Sales Tax Types Overview

Different Sales Tax Types Overview

The Product Tax Type is an essential feature for generating reports. This can help calculate the VAT summary for your company. Nonetheless, the Product Tax Type may vary from when the company purchased from the Supplier to when the company will sell it to the customers (Input VAT Summary and Output VAT Summary). Here is a guide on the different Product Tax Types combinations.

 

Customer Tax Types:
  1. VAT (12%)
    • Standard tax rate
  2. VAT Exempt
    • Products where the VAT (12%) is not applied (i.e. livestock, books, etc.).
  3. Zero Rated
    • Products that are usually bought from suppliers outside the Philippines and thus, VAT (12%) is not applied.

 

Product Tax Types:
  1. VAT (12%)
    • Standard tax rate
  2. VAT Exempt
    • Products where the VAT (12%) is not applied (i.e. livestock, books, etc.).
Sales Tax Type Different Combinations:

There are 6 possible combinations of Product Price and VAT Breakdown based on the different Customer Tax Types and Product Tax Types.

 

To illustrate the different scenarios, a Sales Order was created containing the different Customer Tax Types and Product Tax Types.

1. Product Tax Type: VAT 12%

    • Selling Price: 112 Php
    • Net of Taxes: 100 Php

2. Product Tax Type: VAT Exempt

    • Selling Price: 100 Php
    • Net of Taxes: 100 Php
Scenario 1:

If Customer Tax Type is VAT (12%) and Product Tax Type is VAT (12%), Product Price is the Selling Price. VAT Breakdown includes the VATable Sales and VAT Amount.

Scenario 2:
Scenario 3:
Scenario 4:
Scenario 5:
Scenario 6: