06-02-2019, 02:12 PM
If any input tax cannot be directly attributed to either a VATable or VAT-exempt transaction, the input tax shall be pro-rated to the VATable and VAT-exempt transactions and only the ratable portion pertaining to transactions subject to VAT may be recognized for input tax credit. The allocation of input taxes shall be done proportionately to each category of transaction (Sec. 4. 110-4, RR16-2005).