SC/PWD Discount Accounting

Last updated: 2026-07-09 Summary:

• Senior Citizen and PWD discounts take 20% off the VAT-exclusive subtotal, and the discounted base becomes VAT-exempt.
• The 5% special discount takes 5% off the VAT-inclusive gross with no VAT reclassification.
• A non-regulatory discount is contra-revenue only, with no filing effect.

Three different math paths

eKapital applies genuinely different arithmetic per discount category — they are not interchangeable.

Senior Citizen / PWD — 20%, VAT-exempt base (Path A)

Under RA 9994 (Senior Citizen) and RA 10754 (PWD):

1. Strip the 12% VAT first, so the discount base is the VAT-exclusive subtotal (RMC 38-2012).
2. Take 20% off that VAT-exclusive base.
3. The remaining 80% base is VAT-exempt — VAT is never added back on top.

So the customer pays the discounted (80%) base with no VAT. The VAT that would have applied to that base is “saved” — it is not collected and not remitted. This is the reclassification that flows to your BIR filings.

5% special discount — 5%, no VAT change (Path B)

The 5% special discount on basic and prime commodities (DTI-DA joint administrative orders) works differently:

1. Start from the VAT-inclusive gross.
2. Take 5% off that gross.
3. No VAT reclassification happens — the sale stays VAT-able.

This is a separate authority chain from SC/PWD; the discounted amount is not VAT-exempt.

Non-regulatory — contra-revenue only

A tenant-defined non-regulatory discount is a plain price reduction: it posts as a contra-revenue (sales discount) and has no filing effect and no VAT change.

Filing impact (high level)

• SC/PWD (Path A) reduce your output VAT because the discounted base is reclassified to VAT-exempt sales on the VAT return; the seller reports the undiscounted gross and the exempt reclassification per BIR practice, and the discount flows to the sales books and the per-customer summary lists (SLSP).
• 5% special (Path B) leaves VAT unchanged — the sale remains VAT-able; only revenue is reduced by the discount.
• Non-regulatory affects only your revenue accounts; it does not touch VAT or the regulatory summaries.

Every discounted line posts its discount to the discount category’s configured sales-discount GL account, so the contra-revenue is captured consistently.

Capturing the discount correctly

The beneficiary TIN and ID (required for SC/PWD) and the choice of per-line vs whole-invoice application are covered in the how-to: Apply Senior Citizen and PWD discounts. Getting the category right is what selects the math path above — so the VAT and filing treatment follow automatically.

See also

• Apply Senior Citizen and PWD discounts
• Tax handling
• BIR compliance overview
• 2550Q VAT filing