What's a valid purchase?
A purchase only counts for VAT if its invoice does. Here's a supplier's VAT invoice read part by part, the entry it makes, and the papers that look like proof but aren't.
← 3.4 Journal entries of a Shopee saleA note is not valid
A supplier delivers ₱6,720 of cat food to Kuting Kitchen, to be paid at the end of the month. The driver hands over a handwritten note: amount, "cat food", a signature.
Carla's question: can she claim the ₱720 VAT (value-added tax) inside that price?
Input VAT needs a valid invoice
Two kinds of VAT meet on the quarterly VAT return:
| Output VAT | VAT on your sales, owed to BIR (Bureau of Internal Revenue) |
|---|---|
| Input VAT | VAT you paid on purchases, subtracted from output VAT |
Input VAT counts only when it's backed by a VAT invoice from a VAT-registered supplier. Without one, Kuting Kitchen loses the ₱720 credit and pays it as VAT anyway. The ₱6,000 cost is also harder to support as a business expense.
So what does a valid invoice look like?
Who sold it
The top of the invoice names the supplier: its registered name, address, and TIN (Taxpayer Identification Number) with its branch code, marked "VAT Reg. TIN" to show it is VAT-registered.
Compare it with the supplier you actually paid. A different name or TIN is a reason to ask before you record anything.
What document, which number, what date
It must say invoice. Since 27 April 2024 (RR 7-2024, a Revenue Regulation) the sales invoice is the main document for goods and services; an official receipt no longer plays that role.
It carries a serial number and the date of the sale. Printed or electronic, the same details apply.
Who bought it
The invoice should name the buyer: Kuting Kitchen OPC, its address and its TIN. That ties the purchase to your business and not someone else's.
Ask for your name and TIN on every supplier invoice. Your RDO (Revenue District Office) can confirm exactly when the buyer's details are required.
What was bought, with VAT shown separately
Each line describes the goods, the quantity and the price: 40 bags at ₱168.00. Then the totals: VATable sales ₱6,000, VAT ₱720, total ₱6,720.
The VAT must be its own amount. A single "₱6,720, VAT inclusive" leaves you guessing, and the ₱720 line is the one you claim.
New in 2026: withholding on the invoice
RR 6-2026 adds a required item: creditable withholding tax, if any, shown as a separate line.
The cat food has none, so the line stays empty. The landlord's rent invoice does: ₱30,000, less withholding tax ₱1,500, ₱28,500 to pay.
Invoices printed before the rule can be used up if stamped "Less: Withholding Tax".
Then record it: the purchase journal
With a valid invoice in hand, record the purchase. Which book depends on when you pay:
| Pay later | Purchase journal |
|---|---|
| Pay now | Cash disbursements journal |
Kuting Kitchen pays at month-end, so: Inventory ₱6,000 and Input VAT ₱720 on the debit side, Accounts payable ₱6,720 on the credit side.
Is paying it later a second record of the same purchase? No. The payment is its own transaction, recorded once in the cash disbursements journal. File the invoice with the entry: it's the proof if BIR asks.
What doesn't count
A handwritten note, a delivery receipt, a chat screenshot or a bank transfer slip shows something happened, but none of them is a VAT invoice.
"But the slip proves I paid ₱6,720." It proves you paid. It doesn't show that a VAT-registered seller charged ₱720 of VAT, which is what the claim rests on.
A non-VAT supplier's invoice is a fine record of the cost, but there's no input VAT to claim. Ask suppliers for a proper invoice before you pay, while you still have leverage.
Pop Quiz: claim the input VAT?
For each document, decide whether Kuting Kitchen can claim the VAT on it.
Bantay Pet Supply's sales invoice no. 0587: VAT Reg. TIN, dated, sold to Kuting Kitchen OPC with its TIN, VATable ₱6,000, VAT ₱720.
Every core detail is there and the VAT is shown separately. Record ₱720 as input VAT.
A delivery receipt signed by the driver: "₱6,720 cat food, received in good order".
It proves delivery, not the sale and its VAT. Ask the supplier for the invoice.
An invoice from a non-VAT packaging supplier for ₱2,000 of boxes.
A non-VAT supplier charges no VAT, so there's nothing to claim. The ₱2,000 is still a recorded cost.
Shopee's VAT invoice for October's seller fees, addressed to Kuting Kitchen OPC with its TIN, VAT shown separately.
Marketplace fees carry VAT too (Lesson 3.4). Keep each platform's fee invoices with the payout records.
General information for learning, not tax advice. Kuting Kitchen, Bantay Pet Supply and their numbers are fictional. The invoice shows the main details only; BIR's rules list more. Check the full requirements with your RDO or accountant before relying on a supplier's invoice.
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