PERCENTAGE TAX Percentage tax – are taxes imposed on the sale, barter, exchange, or importation of goods or the sale of services, based upon the gross sales, value in money or receipts desired by the manufacturers, producer, importer or seller. Sec. 116 – Tax on persons exempt from VAT – shall pay a tax equivalent to 3% of his gross quarterly sales or receipts provided that Cooperatives is exempted. Persons liable to Percentage tax 1. Persons who sales or receipts are exempt from VAT a and nonVAT registered for having annual gross or receipt not exceeding ₱550,000 2. Domestic common carriers and keepers of garages Cars for rent or hire driven by the lessee; transportation contractors, including persons who transport passengers for hire; and other domestic carriers by land, air or water, for the transport of passengers; and keepers of garages. Except: a. owners of bancas b. owners of animal-drawn two-wheeled vehicles shall pay 3% of their quarterly gross receipts >In computing 3% - minimum gross receipts Jeepney for hire Manila and other cities Provincial
₱ 2,400 1,200
Public Utility Bus Not exceeding 30 passengers Exceeding 30 but not 50 passengers Exceeding 50 passengers
₱ 3,600 6,000 7,200
Taxi Manila and other cities Provincial
₱ 3,600 2,400
Car for hire (with chauffeur) Car for hire (without chauffeur)
₱ 3,000 1,800
3. International Carriers a. International air carriers doing business in the Philippines – 3% of their quarterly gross receipts b. International shipping carriers doing business in the Philippines – 3% of their quarterly gross receipts 4. Tax on Franchises a. Radio and TV broadcasting companies – gross receipts not exceed 10M – 3% – option to be registered as VAT payer, once the option exercised, no revocation b. Electronic, gas and water utilities – 2% on gross receipts – without option to register as VAT taxpayer 5. Tax on Overseas Dispatch, Message or Conversation Originating from the Philippines a. by telephone b. wireless and other communication Tax 10%
– -
on the amount paid for such services person paying the service to the person rendering the service person rendering services required to pay and collect the tax within 20 days after the end of each quarter
Exemptions: a. Government b. Diplomatic services – Embassy and Consular offices of a foreign government c. International Organizations – Red Cross, UNICEF, OXFAM, MERLIN d. News Services – DZMM, GMA, ABS – CBN 6. Banks and Non-Banks Intermediaries A. Interest, commissions and discounts from lending activities a. Short term maturity (not exceed 2 years) 5% b. Medium Term (2 years not exceed 4 years) 3% c. Long Term maturity (over 4 years) 1% B. Royalties, rentals of property, real or personal, profits from exchange and all other items
5%
7. Tax on Finance Companies (same as above except royalties) 8. Tax on Life Insurance Premium – 5% of the total premium collected 9. Tax on Agents of Foreign Insurance Companies Fire, marine and other miscellaneous 2 X 5% = 10% - total premium collected 10. Amusement Taxes Shall be collected from the a. Proprietor b. Lessee or operator of, Cabaret Cockpit Night or day club Boxing exhibitions Professional basketball games Jai-alai Race track
EXCISE TAX Excise Tax – tax imposed on certain specific goods or articles manufactured or produced in Philippines 1. for domestic sale or consumption or for any other disposition 2. things imported into the Philippines
18% 18% 18% 10% 15% 30% 30%
Nature of Excise Tax Since they are LEVIES on certain product or good – therefore they are tax on property
11. Tax on Winnings – horse races – 10% 12. Tax on (A) Sale, Barter or Exchange of Shares of Stock Listed and Traded through Local Stock exchange or (B) through Limited Public Hearing (Close held Corporations) A – ½ of 1% = gross selling price of shares of stock sold B – close held corporations – 50% of the outstanding capital owned by not more than 20 persons 25% of the shares of stock sold Over 25% but not exceed 33 1/3% Over 33 1/3%
A. Returns of Gross Sales, Receipts and Payment of Tax 1. Every person subject to percentage tax shall pay within 25 days after the end of taxable quarter 2. Person retiring from business subject to percentage tax shall notify the nearest BIR within 20 days after closing the business; unless otherwise provided by the law
4% 2% 1%
Paid by the corporation in primary offering or the seller in secondary offering Payment – within 5 banking days after collection - Public offering – 30 days from the date of listing of the shares of stock in the local stock exchange
Kinds of Excise Tax 1. Specific tax – tax imposed and based on: a. weight; or b. volume capacity; or c. any other physical unit or measurement 2. Ad Valorem tax – tax imposed and based on: a. selling price; or b. specified value of the good >In case of importations in addition there: 1. custom duties 2. excise tax also subject to VAT Goods/Articles subject to Excise Taxes 1. Alcohol products a. Distilled Spirits – ST b. Wines – ST c. Fermented Liquors – AV 2. Tobacco Products a. Tobacco – ST b. Cigars and Cigarettes – AV
3. Petroleum Products – ST 4. Miscellaneous Articles a. Automobiles – AV b. Non-essential goods – AV >jewelry, precious and semis-precious stones >yachts and other vessels intended for pleasure or Sports 5. Mineral Products Coal – ST Non-metallic minerals and quarry resources Rate 1. Volume 2. Length 3. Weight >Ad Valorem tax – amount fluctuates as the price of the articles move up and down >cigars – on number
3. Wines over 14% but not more than 25% of alcohol P 24 Example 100 cases of wine 12 bottles/case at 1 liter Retail price = P625/bottle Excise tax = 100 X 12 = 1,200 1,200 X 1 = 1,200 (total quantity/liter) X 300 (tax rate) = Tax due = P360,000 Specific Tax on Cigars and Cigarettes Tax per pack Retail price 1. above P10/pack 2. above P6.50 but does not exceed P10 per pack 3. P5.00 but does not exceed P6.50 4. below P5.00
P12.00 P 8.00 P 5.00 P 1.00
>ST = 12/8/5/1 X No. of packs = Payment of Excise Taxes They shall be paid: A. In the case of Domestic Products Manufacturer’s/Producer’s a. before removal from the place of production – except otherwise provided by the law b. locally manufactured petroleum products – 15 days from the date of removal B. In the case of imported articles a. before the release from the custom house >No deadline of filing and payment of excise tax – unlike VAT, estate tax, donor tax and other percentage tax
Automobile Ad-valorem – Gasoline/Diesel – Selling Price – P400,000 Engine Displacement (in cc) Gasoline Up to 1600 1601 – 2000 2001 – 2700 2701 – over
Diesel Up to 1800 1801 – 2300 2301 – 3000 3001 – over
Tax rate 15% 35% 50% 100%
Ex: Selling Price – P400,000 1600 X 400,000 = P60,000 – tax
Specific Tax on Wines 1. Retail price + VAT a. P500 or less b. more than P500
P100 P300
2. Wines containing 14% of alcohol by Volume or less
P 12
Manufactured Oils and Other Fuels (Per liter of volume capacity) Lubricating oil and greases Ex. 4.50 X no. of liters =
P 4.50
DOCUMENTARY STAMP TAX Meaning of DST Documentary stamp tax – is a tax on documents, instruments, loan agreements and papers, and upon acceptances, assignments, sales and transfers of the obligation, right or property incident thereto there shall be levied, collected and paid for corresponding stamp taxes 1. By whom payable – by the person making, signing, issuing, accepting and transferring such obligations, right or property In other words – Both the person who issued the document and the person to whom it is issued – liable for the tax – unless otherwise provided by the law – (one party to the taxable document is exempted – the other party – not exempted will pay the tax) (Paki-check din po ung mga nakalagay, BANGAG po kasi ang nag-type) 2. When payable a. at the time the act is done b. transaction is held or accomplished c. the time of execution; or d. issuance of document 3. How payable – by purchasing and affixing the required documentary stamp to the document or instrument and subsequently cancelling the same in the prescribed manner > thru the use of tax-meter – no need to cancelled 4. How documentary stamp cancelled a. b. c. >within 10 days – Filed – when the taxable documents were made, pay the tax at the time the return is filed >Where to file 1. authorized Agent Bank 2. BIR District Office 3. authorized treasurer of the city or municipality in which the taxpayer has his legal residence or principal place of business Document subject to tax: >Sec. 174 – 198 – various kinds of evidence of debt issues and acceptances Sec. 174
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