REVENUE MEMORANDUM CIRCULAR NO. 70-2004   issued on November 23, 2004 clarifies and reiterates the rule on proper determination of the amount of Value Added Tax (VAT) on VAT invoices or VAT Official Receipts.
           Pursuant to Section 264, in relation to Section 106 (D)(1) and Section 108 (C) of the 1997 Tax Code, Revenue Regulations No. 8-99 was promulgated to set the guidelines in the proper invoicing of output tax on the sale of goods and services where all VAT registered taxpayers required to issue receipts or sales or commercial invoices are no longer allowed to separately bill the VAT corresponding thereto. The amount appearing in the sales invoices/receipts is thus deemed inclusive of the VAT due hereon. The amount of tax shall be computed by multiplying the total amount indicated in the invoice or official receipt by one-eleventh (1/11).
           This means that on the part of the seller of goods, the amount of VAT-Output Tax should be 1/11 of the total amount reflected on the VAT Sales/Commercial Invoice; for seller of services, the amount of VAT-Output Tax should be 1/11 of the total amount reflected on the VAT Official Receipts.