Section 6Sec./Art. 6

Section 110 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"Section 110. Tax Credits. -

"(A) Credit Input Tax. -

"(1) x x x

"(2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable:

"(a) To the purchaser upon consumption of sale and on importation of goods or propertied; and

"(b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the Bureau of Customs.

"Provided, That the input on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, that the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, finally, That in the case of purchase of services, lease or use of properties, the input tax shall creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.

"Notwithstanding the foregoing, nonresidential digital service providers shall not be allowed to claim creditable input tax.

"x x x."