The expanded value added tax increased the vat rate from 10% to 12%. When computing for your input VAT, the net amount is now divided by 1.12, instead of 1.10.
The formula for getting the gross amount is derived below:
Thus, if the net amount paid is P33.60:
P30.00 is to be recorded as Expense, and the remaining amount (P3.60) is to be recorded as Input Vat.
The formula for computing the input VAT is derived below:
If the net amount is P33.60: