The two formulas
- Price without VAT (VATable sales) = total ÷ 1.12
- VAT = total × 12 ÷ 112 (about 10.714% of the total)
Example: ₱5,600 total
- ₱5,600 ÷ 1.12 = ₱5,000.00 VATable sales.
- ₱5,600 − ₱5,000.00 = ₱600.00 VAT.
- Check: ₱5,000.00 × 12% = ₱600.00. ✔
Why not 12% of the total?
12% of ₱5,600 is ₱672 — too much, because that would charge VAT on the VAT. The total is 112% of the net price, so the VAT is 12 out of every 112 pesos.
Quick table
| VAT-inclusive total | VATable sales | VAT |
|---|---|---|
| ₱112.00 | ₱100.00 | ₱12.00 |
| ₱560.00 | ₱500.00 | ₱60.00 |
| ₱1,000.00 | ₱892.86 | ₱107.14 |
| ₱5,600.00 | ₱5,000.00 | ₱600.00 |
| ₱11,200.00 | ₱10,000.00 | ₱1,200.00 |
| ₱50,000.00 | ₱44,642.86 | ₱5,357.14 |
Reading your official receipt or invoice
A VAT invoice shows “VATable sales”, “VAT amount”, “VAT-exempt sales” and “zero-rated sales” separately. Businesses claim the VAT on their purchases (input VAT) against the VAT on their sales (output VAT), so the VAT amount must be shown correctly.
If you are a freelancer who is not VAT-registered, don’t add VAT to your invoices — you pay 3% percentage tax or use the 8% option instead.
Expense reimbursements
When your company reimburses expenses, accounting usually needs the VATable amount and the VAT separately so it can claim input VAT. Keep the official invoice (not just the order slip) and check that it shows the seller’s TIN and “VAT Reg.” status. A receipt marked “non-VAT” has no VAT to claim.
For non-VAT sellers, the amount on the invoice is simply the price; don’t divide it by 1.12.
Quick check on your phone
Type the total × 12 ÷ 112 into your phone calculator to get the VAT. For ₱5,600: 5,600 × 12 ÷ 112 = 600. Then 5,600 − 600 = 5,000 is the price without VAT.
FAQ
How do I get the VAT from a total amount?
Multiply the total by 12 and divide by 112. Or divide the total by 1.12 to get the net, then subtract.
What is the VAT on ₱5,600?
If ₱5,600 already includes VAT, the VAT is ₱600.00 and the net price is ₱5,000.00.
Is VAT 12% of the total price?
No — it is 12% of the price before VAT, which equals about 10.71% of the VAT-inclusive total.
Sources (checked 5 November 2026): NIRC Secs. 106–109 as amended (12% VAT; VAT registration threshold ₱3,000,000 under RA 10963); RA 9994 (Expanded Senior Citizens Act) and RA 10754 (PWD) — 20% discount and VAT exemption on qualified purchases; BIR Revenue Regulations No. 7-2010 (senior citizen discount computation, group meals) and RR No. 5-2017 (PWD); RA 12023 (VAT on digital services, effective June 2025); bir.gov.ph.