TITLE II: TAX ON INCOME

INCOME TAX
Within

Without

NIT

GIT

Interest
Income

RC

Yes

Yes

Sec. 24 (A)

20%, 10%

RA

Yes

No

Sec. 24 (A)

20%, 10%

NRA-ETB

Yes

No

Sec. 24 (A)

20%, 10%

NRA-NETB

Yes

No

25%

DC

Yes

Yes

Sec. 24 (A)

20%, 10%

RFC

Yes

No

Sec. 24 (A)

20%, 10%

NRFC

Yes

No

30%

IND

Corp

TP

PREFERENTIAL
Others

Subic Bay
PEZA

5%
5%

Sub-contractor
of petroleum
subcontracting
operations

8%

Bank Deposit (I)

Media
Real Property
Installments
Intercorporate
Dividends
Compensation

- in lieu of ALL TAXES

Seller (Ordinary)
Seller (Capital)

FWT
20%
2%
x
6%

CWT
x
x
IT, 30%
x

Recipient is NRFC

15%

CWA: ER per NIRC provisions schedular

VAT AND PERCENTAGE TAXES

Sec 117

Land

Sea

12%

Passengers (P)

Cargo (C )

VAT

Domestic

Foreign to Phil

Phil to
Foreign

Phil to Phil

Foreign to Phil

Phil to
Foreign

Phil to Phil

International Carrier
(Offline and Online)

Sec 118
Air
Sec 118

Exempt

VAT
0%

Domestic
International Carrier
(Offline and Online)

Domestic Corp. /
Individuals
service

Service to
Int'l Carriers
& Domestic
Carriers
(DomForeign)

Services to
Domestic
(Dom-Dom)

Notes:
Computation on commissions
1,000
120

Price of Ticket
12% VAT (+)

WT (2%) on Company's sales (by top 10,000 Corp.

20

Agents Commission (3.5%)

35
12% VAT on Commision
4.2
WT (10 %) on agents commission
3.5
Amount for remittance to shipping:
1064.3
*** Note that the sale of services by the agent shall be subjected to VAT

Sec 119

Sec 120

Sec 121

TV and Radio
Gas and Water
Other Franchise
Payor (Msg
Dispatch)
Memo: Exempt DING

Franchise Tax
Local
LT
LT
x

10%

Other NB FI
(SPV,
Pawnshops)

VAT
x
x
VAT
x

*** VAT is in lieu of franchise tax not the other way around.

Other Percentage Taxes

GRT
Gross receipts - is excluding the FIT charged on interest in

Banks, NB and FI
Memo: D-SIRN

Sec 122

National
2%
3%
x

Interests,
Commissions &
Discounts from
lending

5%, 1%

In the year the loan is preterminated, you charge 5% on

the interest on the loan. The 5% and 1% is based on the
remaining years the borrower is to pay.

Subsidiaries

0%

Royalties,
rentals of
property

5%

Net Trading
Gain

5%

Cannot be carried over to the next taxable year. Cannot be

against other percentage taxes. Net Trading against net tra

5%, 1%

Gross receipts - is excluding the FIT charged on interest inc

(within). Thus, GR is less FT (20% on interests).

Interests,
Discounts and
all other
INCOME

VAT/ PT / CCT or Percentage Tax

(payment of one excludes others)

Sec 123 LIFE INSURANCE

IT

Premium
Tax

VAT

Other
Percentage
Tax

Profit /
Gains

5%

CIT

Investment
Income
(Incidental)

(1) From
premium and
(2) from other
funds obtained
with the
approval of the
Com. (Included
in Premium
Tax) incidental

CIT

Other financial
activities

VUL Premium
+ Other
Investments
(MGT Fees)

12%

PDF (samereceiving
deposits from
the public)

3%

CIT

12%

OR 3%

12%

CIT

AT

VAT

Other
Percentage
Tax

18%, 15%,
10%

50% of AT

10%

STT

CGT

NIT

1/2 of 1%

In closely held Corp. the Co

IPO. 2 STEPS: (1) Primary (C
be in 1/2 of 1% rate - TSE

4%, 2%,
1%

I. Corp. (Stocks offered / Total (

than 33 1/3. To get actual tax: S

5%, 10%

II. SH. (Stocks offered / Total (O

than 33 1/3. To get actual tax: S

CIT

Independent
Activities
NL INSURANCE

Sec 125

Sec 126

Sec 127

Common
Carriers or
Sales of
services
On Gross
Premium

Operator,
Lesee,
Proprietor
Foreign
Tourists
Tax on Winnings Player
Amusement
Taxes

Trading of
Stocks

Not Closely
held

over 33 1/3%,
over 25%, 25%
or less

Closely held
corp (IPO)
Capital Stocks
NTSE
Ordinary
Stocks

STT N/A to all

other persons
exempt from
Internal
Revenue Taxes
EXCISE TAXES

Qualified
Retirement
Plans (STT is
essentially IT Exempt from IT

III. Based on 1/2 of 1%

Indirect Tax - on
ST / Ad
property, in
Valorem
addition to VAT

Sec 129

REMEDIES
Sec 206
Sec 207
Sec 208
Sec 209

Overview
Sec 106
Sec 108
Sec 117
Sec 118
Sec 119
Sec 125
Sec 126
Sec 127
Sec 129
Sec 218
Sec 222
Sec 223

of Tax Provisions
VAT on sales
VAT on servces
CCT Land Carriers
CCT International Sea and Air
Tax on franchises
Amusement Taxes
Taxes on winnings
Shares of Stocks - TSE
Excise Tax
No injuction rule (on ordinary courts only) , CTA has the power to issue injunction
*** Note the powers of CIR that can be delegated and those that cannot.
Exceptions as to Period of Limitation of Assessment and Collection of taxes ( assessment statutory limit wa
Other grounds for suspension. (a) The filing of reinvestigation and granted by CIR suspends the running
of the 3-year period to collect. TP to submit all docs within the 60-day period, otherwise, the assessment
becomes final and executory. (b) Appeal + CIR enjoined to collect (c) bond (10-year, NCC)

Mistake of fact as a matter of defense cannot be applied in this case because, if X thought the ring was h
intent to gain a property he does not own. It is different from a scenario where X killed Y, believing it was a
factually correct would be a justifying circumstance of self-defense.

PASSIVE INCOME
Cash/Property
IC
Dividends
Dividends
10%

NA

10%

NA

10%

NA

10%

NA

10%

10%

15%

CGT - on
shares
(sales)
5%/10% or
of 1%, 6%
5%/10% or
of 1%, 6%
5%/10% or
of 1%, 6%
5%/10% or
of 1%, 6%

1/2

MCIT

IAET

BPRT

FWT

CWT

2% on
GI

I, R, A

Ordinary

I, R, A

Ordinary

I, R, A

Ordinary

1/2
1/2
1/2

2/% on
5%
x
I, R, A
Ordinary
GI
2/% on
5%
x
I, R, A
Ordinary
GI
15%
x
5%
15%
15%
X
*** MCIT can only be deducted from NIT (Secs 27(A) and 28 (A))

PREFERENTIAL TAXES
N/A
N/A
N/A

Percentage Tax
3%

GPB (Income)
2.50%

NIT
30% or schedular

CCT

IT (within)

NIT

IT (within)

NIT

IT (within)

NIT

PT

GPB

IT (Within and Without)

PT

GPB

x
NIT
x

x
x

x
(not common
carrier)

x
(not common carrier)

NIT

add
add
less
less
less
add

all be subjected to VAT if it has annual income of 1.5 M or 3% as the case may be.

y around.
charged on interest income (within)

you charge 5% on
1% is based on the
y.

xable year. Cannot be applied

rading against net trading only.

harged on interest income

nterests).
IT
DST
Yes

No (already
included in the
premium)

No (already
included in the
premium)

Yes

Yes

Yes

y held Corp. the Corp shall initially offer to issue stocks during an
TEPS: (1) Primary (Corp to offer) (2) SH to offer. The 3rd step (3) shall
2 of 1% rate - TSE

Stocks offered / Total (Offered + Existing) = % (less 25%, more than 25%, more
/3. To get actual tax: Stocks Offered x par value x % = STT

ocks offered / Total (Offered + Existing) = % (less 25%, more than 25%, more
/3. To get actual tax: Stocks Offered x par value x % = STT
on 1/2 of 1%

ment statutory limit way be waived - but only before assessment prescribes)

spends the running

ise, the assessment
NCC)

hought the ring was his fathers', still, there was a criminal
ed Y, believing it was a robber trying to enter, which if

BIR ASSESSMENT
PAN
FAN
Protest (MR, MRI (60 days to complete docs))
BIR to decide within 180 days
I
I
Denied
Lapse - inaction
I
I
APPEAL within 30 days
I
>provided that the appeal is made within
2 years to file refund
I
Motion for reconsideration within 15 days
(Division)
I
Motion for reconsideration within 15 days
after receipt of notice (en banc: com + 4
deputy com)
I
RULE 65 (grave
abuse of
discretion)

Sec 222

WAIVER OF STATUTE OF LIMITATIONS

FRAUD CASES
> with intent to evade

ASSESSMENT
(Within 3 years)
I

Waiver to
extend assess later
(provided
assessment
has not
prescribe)

Assessment No waiver
(Within 3
years)

To collect
Assessment
within the time
(within the
agreed
period stated
(provided it
or on time
follows the 5
agreed)
years limit)
I

COLLECTION CASE
I
Filed within the
10-year
prescriptive
period, to run
from the date
of discovery

<<<<

NO ASSESSMENT MADE

To collect
within the
time agreed
(provided it
follows the 5
years limit)

QUERY: What do you think is the recourse of the BIR when period of assessment already lapsed? File a collection
assessment must be done within the 3-year period

O ASSESSMENT MADE WITHIN THE 3 YEAR-PERIOD

psed? File a collection case directly with court. The