Calculate RVAT

How is the RVAT calculated in Philippines?

How to calculate RVAT? To do so, you have to calculate it using the corresponding formula.

First, you have to divide that 12%, which is the RVAT percentage, by 100%. After doing the math, this totals a result of 0.12. For clarity:

RVAT% = 12% / 100% = 0.12

Next, you have to multiply the selling price, known as the taxable base, with the RVAT percentage. For example: ₱5,630.80 (which is the taxable amount) times 0.12 (the result of the above formula). This equals ₱675.70 (RVAT amount). The formula looks like this:

RVAT amount = taxable base * RVAT (12%)

₱5,630.80 * 0.12 = ₱675.70

This is the total price with RVAT: ₱5,630.80 + ₱675.70 = ₱6,306.50

How is the total calculated without separating RVAT?

How to add RVAT to a price? There is a simple, effective, and quick way that will help you to calculate the total amount or cost of RVAT. This is another formula that is quite well known. It consists of adding a one to the result of the percentage of the tax that we detailed previously. That is to say: 1 + 0.12 = 1.12 .

This must be multiplied with the taxable base or sales price, following the example would be ₱5,630.80. After performing the mathematical operation, you will see that this will result in a cost with RVAT already included (total amount). Which means ₱6,306.50, the formula looks like this:

RVAT total amount = ₱5,630.80 * 1.12 = ₱6,306.50

Calculate the price excluding RVAT. How to remove RVAT from the total amount?

How to remove RVAT? You must divide the total amount to be charged to the final consumer with the RVAT percentage. If the total amount is ₱5,630.80 and the tax commission is 12%, this formula will give you this:

Taxable income = Total amount / RVAT (12%)

₱5,630.80 / 1.12 = ₱5,027.50

How to calculate the taxable income with RVAT only?

Calculate the taxable base: In the opposite case, that is to say, if you only have the total cost of the tax, you must perform another formula to know the taxable base. It simply consists of dividing the amount of the tax by 0.12, which is the corresponding percentage to charge.

In other words, if the RVAT amount is ₱603.30 -as applied- you have to divide it by 0.12. You can see it better in this next formula:

Taxable income = RVAT amount / RVAT (12%)

₱603.30 / 0.12 = ₱5,027.50

This means that the cost of sale excluding RVAT is ₱5,027.50.