TAXATION 5 The Review School of Accountancy ‘Tel. No. 735-9807 & 734-3989 ‘ TAMAYO/GARCIA AM rem ESTATETAX A. FORMAT OF COMPUTATION Exetusive | Common [Gross estate 3 wo sox xxx ess: Deductions ra weal | bod (x8) ‘Net estte Before share of surviving spouse x x 7 Tess Share ofsurviving spouse an : ios fox) Net eta boone special deductions = oo [oess Special deci = 2 E amily home = EI [—p05) Standard deiuction (Gx) read Epcioeaet z oa a Tanabe net estate [otaxdue fe “xx Less: estate aN credit ca (oo) | Tas payable B, ESTATE TAX RATES I the net estate is: ‘Over Butnot over ‘The tax shall be Plus ‘Of excess over 200,000 500,000 Sime (10,000,000 GROSS ESTATE 1._Composition of Gross Estate Non-resident afen decedent] ituated in the Philippines Real propertis Personal properties ease] a ituated in the Philippines | Family home 0 “Taxable transiers Wherever situated vthe Philippines 2._Gross Estate of Married Decedents Conjugal partnership of gains | “Absoliz@oininanlfy Of properties. Taclusive properties of the decedent Included s Included Exclusive properties of the = surviving spouse: Not includes! ‘Common properties Included at reciprocity. 2 Basic rules Philippines When there decedent. a é When: there is reciprocity ~ The ‘OF non-resident alien ituated in the Philippines are vrocity ~ The intangiblespersonalproperty-of non-resident alien tated nthe Phi The following shall Franchise which must b. Shares, obligations or bonds issued by any corporation or sociedad anonima ‘onganized and constituted in the Philippines in accordance with its law:KSA: Ine Keview scnoo! or accountan: catGlesiasagane pa pl ST ty | iguana er ee id transfer [2 Motives that preciude a transfor from the ‘category of one made | ¢. To settle Family litigatsand un-litigated disputes; incontemplation of death ‘© Shares, obligations or bonds Wenedalysnsneignsonpmeation ‘business of whicls is located in the Philippines; Cwm ewbwck sources) Ad. Shares, obligations or bonds iasuedkdpyoany-horeignsorposation i such shares, obligation or bonds hay: gehiedanasinesesitnei ee is © Shares or rights insansespontnershipmbusinesssorieetste-estabrisher tthe | = Bhilippiows, ae | fay @ te shine of Deedh i se pifete fr conte aatpag Cet exceed by ta anise Revocable transfer the enjoyment ofthe propery may be altered amended, revoked ‘or temo by the dacerent, | fe cia ed ctlee gavel pore of abnor 3 | transfer with wention or reservation of certain rights ifbon tok in clon) [etter fr eeitnienteivesiocuon, We Iifatocleverionat rem tyebenct Hane TE Gio sve cone a propia d.To provide independent income for dependents; «@. Lo see the children enjoy the property while the donor is alive, To protect the family from hazards of husiness operations; and eee [epee Ne ial icc [as |b. The proceeds/ benefits cometuome§SSiHGSS; | c.The proceeds come fsomegronpeinstreney i heh 4917 G. EXEMPTIONS/EXCLUSIONS: 1. Beempltions of ceriain acquisitions and pmo] b. the transmission or delivery ofthe inheritance or legacy by the fidutiory heir or transmissions 2 clusions from gross | a, Amount received as yar dagases: H. DETERMINATION OF THE VALUE OF THE ESTATE Whatsoever b. The amount received by he of the decedentemployee is nt above is also a from decedent's employer as a consequence of the death | legatee to the fideicomimissary; ‘The transmission from the first heir, legatee or donee in favor of another beneficiary im accordance with the desire ofthe predecessor; and 4. All bequest, devises, legacies or transfers to social welfare, cultural ang charitable institutions, no part of the net income of which inures to the benefit of any individual: Provided, however, that pot moze than 304% ofthe said bequest, devises, egacies fers shall be used by Such institutions for administration purposes. Jaws | b, Amount received from,J5 Veterans Administration; =| 6 Bete fits ea In accordance with the latest Basic Slandard Mortality Table, fo be approved by the Secretary of Finance, upon the recommendation of the Insurance Commissioner. ‘a. Generally — ©, Real property - Highey etc fair markt value BIR somal value) and aie market | value, Provincial and City assessor (assessed vale «. Pomona properties = Receatly purchased ~ Purchase price ____ Nokreceutly purchased Pawn valuex3ReSA: The Review School of Accountancy ‘d. Securities (shares of stock) 1) Traded in the local stock exchange ~ Mean between the highest and lowest | gaan | 4) Common (ordinary) shares - Hogkualue on valuation date or on a date ‘nearest the valuation date; by Preferred (preference) shares — Pa pale ee 1, GROSS ESTATE OF MARRIED DECEDENTS 1, CONJUGAL PARTNERSHIP OF GAINS (RELATIVE COMMUNITY OF PROPERTIES) “Exclusive properties Conjugal properties ‘a Properties brought into the marriage, | a. Properties acquired by onerous title during the marriage at the expense. as either ofthe spouse's oxo; cof the common fun, whether the acquisition be for the partnership, or Ss for only one of the spouses; —_ | B. Properties acquired by gratuitous (or | b. Properties obtained from labor, industry, work oF profession of either oF lucrative) title during the marriage; | both ofthe spouses, © Propeties acquired by righto! © The fiuis, natural, industrial or civil, due or received during the redemption ot by exchange with other | marviage from the common property, as well as the net fruits from ‘property belonging to only one ofthe | exclusige property ofeach spouse, spouses; Tees “al Properties acquired with exclusive |W. The share of either spouse in the hidden treasre which the law avrards © money of either spouse. “tothe finder or owner ofthe property where the treasure i found: «Properties acquired through occupation such as ishing and hunting Livestock existing upon the dissolution of the partnership in excess of the number of each kind brought to the marriage by either spouse { Properties acquired by chance, such as winnings from gambling and betting 2._ABSOLUTE COMMUNITY OF PROPERTIES Exclusive prope Fe pean ~ Community Properties ‘Properties acquired during the ‘All properties owned by spouses at the time of the celebration of marriage by gratuitous (or lucrative) | marriage or acquined thereafter. title by either spouse, and the fruits ‘as well as the income thereof, if any, unless it is specifically provided by | the donor, testator or grantor. that thoy _shall_form _part_of _ the __ community b. Property, use of “either spouse, however, jewoley-shall_ form part of the | “community property: © Property azquired before the ‘marriage by either spouse who has legitimate descendants by a former marriage, and the fruits as well as the income, ifany, of such property. 3. Bxercises: ee A eee line opener swyaite the mitosis oe eae fel i Resident | NRA-No | NRA‘With decedent ‘proc ‘House and lot, USA. ze sf Z —— Condominium unit, Philippines —_ = Z Furniture and appliances, Philippines v wie] [car USA Bonds, Philippie a ‘of sale, P250,000, FMV, date of death Shares of stock, Philippine Corporation a Philippines (administrator ‘estate irrevocable beneficiary)JP "ReSA: The Review School of Accountancy C b. The decedent was married at the time of death. He was survived by his wife and children, ‘The following, were | presented to you and you are asked to compute the exclusive and conjugal properties under conjugal partnership of | es _gains and exclusive and community properties under ebsolute community of properties pace EXCL: | ConME Peet A care ACP lage __ 7 P5:000,000 erited by the decedent during the marriage st | ay fe as gilt before the | Bese i ro ea ae

) Reventie District Officer: } ©) Collection Officer, or 4) Duly authorized ‘Treasurer of the city or municipality where the decedent was domiciled at the time of death, 2) Incase of non-resident decedtent a) by Revenue District Office having jurisdiction aver the executor ot administrator's legal residence (if executor or administrator is not registered); Offic the Commision (RDO No. 39 South Quezon Cy (the extate does | ot hat 1) Fstate is sottiod through the __payment fay sl aie € FXtension of payment ot | When there is negligence, intentional disregard of rules and regulations and fraud allowext con the part of the taxpayer, ~ Labi for payment [1 The estate ax shall paid by the executor or ann Blo Wa avery | the dstbutveshare inthe inertance to any het beta 2) Whore there ate two oF ore executors or adninbtiator alo them ae severally table forthe poymont oft: 3) The execitor or administrator ofan slate has the primary obligation to pay the «stat tax but the hr or Beneficiary has subdir Habito the payment o hat orton of the a nx which his dtibtve share bess tothe vl of the | fetal Ea . past 4 Acts Requiring Certification from the Commissioner that the Estate Tax Has been Pa ‘Actsrequiring | 1. Delivery of distribulive shares tothe heirs; certification 3, atieation i the Registry of Ds of rans of nerd rel propery or el ight | 3. Payments of debt by decedent's debtor to the heirs, legatees, executor or administrator of _ the reditor-decedReSA: The Review School of Accountancy Transfer of inherited shares, rights or bonds: 5, Withdrawal from decedent's bank deposit (except when the amount does not exceed 'P20,000 where only an authorization from the Commissioner is required) N. Integrative Long Case S Pe ‘Mr, F. Cruz died intestate on September 30,2008. Tle was survived by his wife and his two children. He and his wife were under con gains. He ltt the following properties situated in the Philippines: Land (000 s,m.) inherited form he decedent’ father who died on Jane 15,2004; FMV per tax declaration, 1,800,000; zonal value, P3,00 fr sqm. Car inherited from the decedent's father, FMV, P500,000; Cost, P700,000; ai Jewelry acquired before marriage, FMV, P100,000; 2 House and lot acquised during the marriage (family home), FMV, P4,100/000; assessed value, 73,300,000, Houschold furniture and appliances acquired during the marriage, FMV, 500,000; thee personal properties including cash (mode of acquisition unknown), FMV, P1800,000 a “He and his wife also owned a real property in USA valued at P1,500,000. Ithad an unpaid mortgage of 300,000 at the time of death, ‘The estate of Mr. Cruz paid P20,000 estate tax to the US Government ‘The folowing were considered as eduction from the greg the Philippines: ‘Actual fal expenses (30% pa by rates), PSOE eal expe naga up to March 3, 2008 Pion Unpaid aly tox om inked lanl for heat uate of 28 30 00 Rewer acquired before tvatinge let on December 23,2018 ds theft, PABBO Orcas grins the conjugal properties, P0000 aims against insolvent persons, P5000" Transfer io Quezon City for pubic purpose, POA Medical expense P5200 ee The estate the decedent ater pl the esate. the land at the fair market valugof 72,5000 and on theca, Fru0e0. During the marriage, ME Cruz mortgaged the inert land fr POOH forthe beni of Ue fly He pa P0,00 before he died. How much was the Pilppine taxable net estate nd the estate tax payable ale tax credit? Lei? is END THOT: “Never underestimate your ability o achieve your goal, You are made to succeed.” Tamthesise‘The Review School of Accountancy ‘@Tel. No. 735-9807 & 734-3989 TAXATION ‘TAMAYO/GARCIA ‘TX404: OTHER PERCENTAGE TAXES 1._OTHER PERCENTAGE TAXES (SUMMARIZED) 2 Percentage Tax a ax Base z Tax Rate ‘Sec. 116 Tax on persons exempt fom : WAT under Sec. 109 (x) (annual gross sales oF receipts do not exteed Pi,919,500 (ose. | Gross monty sales or receipts 36 foberi,s00.000) eerie a ‘Sec. 117 ~ Percentage tx on domestic ‘aries and keepers of yarage (Vansprt of | Actual er minimum monthly oross reeepts whichever s higher 3% | passengers) 2 —*o Sec, 18 — Pere taxon leis iia = oe ‘Sec. 119 — Tax on franchises Yerossrecsipes: ‘See. 120 —Tax on overseas dpateh, Phitopnes ‘message or conversation anginating fom the| Franchises on rato and/or TV broadcasting companies whose nua gross receipts ofthe preceding yer do exceed P10, _ Franchises on gas and water utes ‘communications faites) ‘Amount paid for such services (by the person who used the ‘Sec. 121 ~ Tax on bas and non-bank financial intermediaries performing quas- banking functions Se i22 — Tax on ather non-bank ancl intermediaries 7 if insurance prem agents of foegn Insurance companies (fre, mati or ‘mscslaneous insurances) _|_eneing mtr of evurer sire tan 5 yest eee : ‘ctv; income from tanga essing Remaining matty period of instrument i 5 years ress Remaining mat Dividends and equity sha and all ler ems treats as gross income under the Tox Code ‘Net trading gains wthin the taxable year on foreign curency, debe scutes, detvotives and ot smi nana insturnents, Gross. receipts dered from eres commissons, discounts and all oer tems treated as goss incre under the Tax Code Interests, commissions and discounts rom lending acvibes, 3 well 25 income from franca ean Remaining matuty of instrument i 5 or loss Gross reesits on interest, commissions and dicounts from Ending Royalties, eral of property, real or personal, profits from exchange Total premiums colectedpaid ‘Generally ‘Oumers of property obtain insurance dire wah foreign inurance companies ‘Sec. 125 = Rinusement taxes Boxing exhtions ‘Sec. 126 — Taxon wininge ‘Aatuol amount peid fr every winning cet ater deducting fhe cost oF thetact Wns owl reais ad ‘See. 37 (A) Taxon sale, biter or exchange of shares of tock ited and traded through the local stack exchange (B) Tax on shares of stock sold ‘ot exchanged throush pubic ofterings fe Prize of winning race horse owners Gross sling pie o ross value in money Gross seling pie oF gros ‘value in money in accordance wth the broporion of shares of stock sod, bartered, exchanged oe otherwise ‘isposed to tne teal oustanding shares of stock afer ting the loca stock exchange ‘Upto 259% (Over 25% bu not over 391/336 ‘Over 331/3%ReSA: The Review School of Accountancy Page 2 of 8 2. PERCENTAGE TAXES AMPLIFIED 1% Sec. 116- Tax on Persons Exempt from VAT Under Section 109 (x) 4) Persons subject to the tax | Parsons whose 09k °'* [ani vno ref areata [See 1a 2) Tex base —[ Gross moh sales or recegts [ 3) Taxeate le ed z S 4) Optional VAT registration | Persons sabjec 1 the sbove tak may apply for regetation WAT subj persons nol ker than ten (10) dys belore the baginnng ofthe trade quate ‘Any person exempt from VAT under Sec. 109 (1) (x) who eects to regler Under the VAT SPS TS ples eel h I pete ak [eeeperatves cups sansa 2 geri ayelees g———| foe ‘Mr Jaime Rodriquez the onner of 2 small aroty Store. Hs gross sales in any one year do not exced the VAT tresbld amount. He is not VAT-epistered. The following data are taken from the books of the vary store forthe month ending November 30, 201% eschandise ventory, December 31, 2014 100,000 ‘ross sales 450,000 141 psa Purchases fom VAT-gitered suppliers 350,000, Haw much the percertape tax due and payable? 18° b. Sec. 117 - Percentage Tax on Domestic Carriers and Keepers of Garage (Common Carrier's Tax) [0 Common carer defined Prins, corporations, fs o asacitions engaged nt busines cargo ansporing arsenger or goods er bat, by fan, vetr,o a fr competion ering teste the pubic nd Shel hue ansportaten esc 2) Persons subject to 1) Gas for rent or hte driven bythe lessee common carrier'stax | 2) Transportation contractors, iiuting persons who transpact passengers 23) Other domestic earners by land fr the transport of pasengers __| 4) Keepers of garage se 1) Owners af tne | gygommencarierstax __| 2)Ownersofanmobirawntnownesedvehide | [Gi Eexbese —__ Actual month gross receipts oF minimum monthly goss ect whihever i Rane. | [sytax: = 6) Minimurs quartery A) eepney for ire] Ma and aerobics 755,700 (F200), receipts re Prov! 32/900 _{e1,200)_| 2) Public utility bus | Not exceeding 20 passengers 3 600 (P3800), steading 30 but not exeesting 50 sere ss200 (05000 a {-fsceeding SO passengers ___P197/100_(67,200) 3) Taxis ania and afer cues 38,600 (P3600) | Provincial ss, 700_1P2,40) 932,100 _ (25,000 for hire || without chaufteve 49,200 (P00) 7) Exemption rom focal ‘rs receipts of conan cavtios dared Wom Tha [gees vase oe Imposed under the Local Govertmest Code 0 1091, 8) Transportation 1) Transporation contractors on ta anspor of goods or corgaes Receivables Revenues Beginning nd From operations: Covered by the anche 2,000,000, 300,000 400,000 Not covered by the anchise 00,000 50,000 How much isthe franchise tax, assuming she is # franchise grantee: he te ‘2. operating a water syst? ae Fas a, : seling elcrcty? “o- yar fees Reo sia eeKeDA: ime Keview Schoo! ot Accountancy : Page 4 of 8 @._ Sec. 120 Tax on Overseas Dispatch, Message or Conversation Originating from: wes 1) Persons subject totax |The tx imposed shall be ‘endeced and shall be aid to the person 15 requied to taleet and pay the tax within | ety (20st ene ote quarter. ar 2) Persons not subject to tax | 1) Pilppine Cavemment; i 2) Dpomatic service {i International organizations; ‘New sances Amoi a oe ved ae ‘| 1) Telephone; communist facies 2 Toga 3 Tere tng is, 4) re fd ter Cnenncatonsquprant enc 1. r Ea spent i psresmon vi tance od oe Ppp aan vena i ra] | ° pi ned tent nh) | orcanscate For calls erianating fom the Phipines Paid by the subscriber othe Philppnes 65,000 { x aid bv the receiver ofthe call outside the Pulgpmnes 14,500 | For cals coming inta the Piippnes: | Paid by Hr. Espenila ie Paid by cals fe cal cas, pad by Mr Esperia ‘Other than ona distance 77900 Ar Long distance esd | {Question 1- How much isthe vahe-ee tx ie tr. Espenita? Cre aif)» 2 Li Questor 2 How mich ete percentage taxied oe Esa? soe x aify= se See, 121- Tex on Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions (Gross Receipts Tax) ee eae ‘The tem “bonk means very banking institution, a5 defined in Sec. 2 OF RA. No. 337, as amended, otherwise known as The General Banka Act. A bank may eter be a commefca Bank, 2 tuft bank, a development bank arual bank ora specalzed goverment bak The term “non-bank financial intermediary” means a.fencoliermetary, 2 defied i Sec |2(0) (0-oF RA, No. 337, as amended, therwme known 36° The Genera Banking Act | sy qusat asain ceciace | Sutra bv tne Bangko Serra ng Paina (8S) to perform quasi banking activties 3) Quasi-Banking activities |The torn “quas:-bankong actives” means Indes aan ne wah Oe eset, ene aan Of debe instruments of any kind other tha deposits forthe’ borromers own account, OF | through the issuance of certificates of assignment or simiarinsruments, with ecouse, or | repurchase agreeients for purposes of relending or purchasing recevables and other sion | obigation: Proved. however, That commercial, industrial and other non fnancal companies, wich borrow funds through any of these means for the limited. purpose of | financing their own needs oF the needs of thar agents or dealers, shall not be consdered 8s “Fy pesos Sabine ac | Peoria quasi bonking functions, 4) Persons subject tothe tax_| Banks and non-bank fnancal intermediaries performing alas bank 15) Tax base and tax rates Taxbese es ‘Gio feckps on interes, cams and dts on ing cig income om thar xg Remain matty peed of struments years or ess | Renan tet pe ner ir 5 ys | | ohaderdand equity shares net income of subsides | Royalties, rentals of propery, real or personal, profs from exchange anda | sthetitems treated as gross income under the Tax Code _ Net trading gains within the taxable yea on foreign carey, debt ‘securities, dervatves ad oer sna Toa nstuments. pies 2 shwras ce = Rees ay 6) Tn case maturityis 'n case he maint periods shared hvu pre temnatio, the matty pad sal be ‘shortened through reckoned to end as Ft date of preterit for purposes ef Gassing We ransaion __prestermination and appyng the core rte of tax scoring. “3 7) Exercie: A comes bari had the folowing dato aon. Compate te pereitage tat Torthe man: Rentals fom safety depost boxes and real property acqued tough mortgage foreosres. P300,00207 Serie fees 200.0017, Dindends ad equity shares inthe netncame of subsites 50,000 | Amounts rected rom lenng ates an ntuments wth matures of Five year an lest so0,00074 Hore than five years samaage: ‘The Review School of Accountancy Page 5 of 8 9. Sec. 122 ~ Tax on Other Non-Bank Financial Intermediaries (Gross Receipts Tax) chaz money change ad pavmops Tax en a ° 3, scouts and a oes es 7 Gioss receipts deriv from interest, com | \qugaledas.gmss income under the TaxCade Teves, commissions and discounts fim lendiag-actaias, a5 well as neome from finencia leasing i 4) Persons cubject to tax 2) Tax base and tax rates rly OF struments S yars oc less 5% Remaining matunty of instrument is mare than 5 years ea DS Pi '3) In case maturity is Tin case the maturity period is shortened thru pee-termination, the maturby period shall be | shortened through | reckoned to end as of ne date oF pre-temination for purposes of dasiying the transaction _pre-termination | and applying the correct rate of tax accordingly. : a hh. Sec. 123 ~Tax on Life Insurance Premiums Person, company oF corporation (except purely cooperative companies oF azeecations) dong Ie insarance business, “otal premiums col [1 Persons subject to tax 2) Tax base | Five (5) years ater the effectivity of RIA No. 10004 (sued February 23, 2010), no taxon if | insurance shal be coleto nest and nen ts abr econ Wa one nsrance eee ae ri et ox ec PE insurance company which are incidental to or m connection wth the insurance policy | contracts issued Investment income realized from the investment of funds obtained frm others allowed and | “approved by the Insurance Cammission 6) Items earned by lite 3a) Insurance and reinsurance commissions, whee fe or non ie insurance company by Management fees | Subject to VAT or Rental income | Percentage taxasthe | d) Other income earned which can be_pursued independeaty. of the insurance business ag. |" actwtes “The interest income eamed by the life msurance companies from wweding the prenianis received in marketable secuttes, bods and other fnascial instruments s eonsisered-exemet ‘rom further impostion-oF business tax since the premiums wich have been the source ofthe armed _| funds invested had already heen subject to the premium tax (RMCND. 432010). '8) Persons subject to VAT | 1) Nowife surance companies (except that crop insurance) including. surey, dey, | indemnity and bonding companies; | 2) pre-need companies, | 3) Heath Naintenance Organizations (m0), (2) Exercise ae “Te Nab nairence Co, wh fe ad Wo iifeinsurane buses on pens insane business, had the folowing data oa peamiumis and expenses for & month: Cash recived 2 P520;000 | Accounts recewable 7 365,008) | Post-dated checks 315,000 | Noni insurance business, on premiums ‘Cash received, excluding VAT of P96,000 ¥ 00,000, L ‘Aecounts receivable + 342,000 Payments on operational expenses including rentals alto VAT registered persons 872,000 | Question 1 - How much is the percentage tax payable? —_(,2#,00p x 2‘) = Bet, { Question 2 ~ How much is the value-added tax payable? 2) er eagle ta _ urn x iy soc 10 a Same opera ee |AyPersons subject to tax | 2)Taxbase Be 1 miu liected Bs | 3)Tax rate 0% i eo i : Sapa ‘Direct insurance with na cain ware ana of (ropty obi inswance idly Vln conpans, ty foreign insurance shal pay the tax of 59% on premiums paid.ReSA: The Review School of Accountancy Page 6 of 8 j-, See. 125 Amusement Taxes oe 1) Persons subject to tax | Popo operator ortesee of) : 1). cack 4) Profesional basketball games; 2) cael ight and day dubs; 5) Jal and racetracks | 5) bosmny extn, | Tax base 2) Tax base and tax rates [Datala and racetracks | 3) Payment af wx ~The the euty ofthe prot, , | itn twenty (20) dos ate the edo each rte to make aie a compete return oF | the amount of goss receipts derives during the preceding quarter and pay the tax due thereon, AS a ome at 44) Exempt boxing exhibition | Boxing exhibitions ior Onietal Championships in any division at stake shall Be | | | ezemet from amusement tox provided tat af east one of the sntenders i= aliens | | | Phiiopines, ond said_exhibitions_are_peomoted=by-ctizen/s=of-the- Primes or by a 5) 159% tax on professional | The 15% tax on profesional basketball games shall be eu of al other percentage taxes Of basketball games in liew | whatover nature and descrition, ‘ofall other percent | 6)'30% tax and other taxes "| The 30% taxi the case of ar Al and vacetacs of tha gies cas © apace of Imposed even ino whether or not ony amount chat oe admission amount Is charged for aamisso 7) Meaning 0 For the purpose of amusement tax, the tem "arose necelats” embraces lithe recent | | emo ese or operat of the amusement pace. Sado veceots a0 ute | ___| income fem telewson, radio and motion pcre right, any. By Erercee 1 | MS. Nis a caterer and a videoke bar operator. In a taxable period, she had the following data, tax not includ { ‘es ne ! Fro eat. he inter tern Srvc Paced = ease enone ‘roars feeble (catering) 20.000, | Gre card sales 213,000 Fro operations ete Due Veoh Bar | Coens 13800, | ee 2003 atom Payments een a cp a CSM whe Yr mip, ona, | ston How much ascent pte? 3550 eeston 2 How mh veo ox a SS. et ee ee See, 126 Tax on Winnings oe [arene Sie pose wwe eae ae eee. 2) Winning trom double, forecast quinelia and tnfecta bets; i 3). Onners of winning race horses, 24 2) Taxbase andtaxrates 7 ‘aorta Tax rate ‘ont pid forever wing kt es cost 1% (pes who wisn FS a) | | Amount paid for every wining icket | | [les cost ofthe tickets oy a { Low ee a 10% (owners of winning racehorses) 3) Collection of tax 4) Tax on winnings shall be deduced from the "awiends” coresponding to each wining ticket or the "pze” ofeach winning racehorse. E) of the | vas horse races before paying the divdends or przes. Hi ee 4) Remittance of tax to BIR ae ‘Sperstor, manager oF person in charge of horse races shall remit the taxes to the BIR - thin 20 days rom the date the tax was deducted and ath|. Sec, 127 (A) - Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded Through the Local Stock Exchange. Dealer in seats ae of shares of stock Gross selling price or gross value in io Tf 1% (005) i —_[ It shal ne te duty of every stockbroker who faced te Sle to collec the ax. 8) Remittance of tax collected| The imecolectod sal be remitted wun S-baniog da rom the date of colecton. 7) Mot deductible for income | The fx onsale, ec of shares of stock hte and traded thro te local tek exchange Sal | gp EE Purposes _-| not be deduct for income tax purposes }) Gain derived from sale, | Any gain derived fom the sale, Darter, exchange or lhe disposition Of shores oF oa ner barter, exchange or other | Se. 127 shall be exempta gains ax and frm regular nd © ecprate lisposition of shares | incometax. | pstackotundersec: 27 | Ses a | 9) Exercise: Pink Yummy, dealer in securities, Ras shares of stock of Mana Trading Crp she holds as iavestment amounting fo | 500,000, The corporations shares are Ist! and traded inthe local stack exchange. Pink Yury sas the src ts ea | stock exchange ough er kia fr PBE,00. hq) ‘Question 1 ow much s the percentage tx onthe sate? | "2. Assuming Pak Yormy se he sores ts ket bye how mich ithe acer aon te sang, cae i 1m, Sec. 127 (B)- Tax on Shares of Stock in Closely Held Corporation Sold or Exchanged Througi initial Pub. Offer 1) Persons subject to tax | 1) Issuing coeporation in initial public offering; 2) Seber n secondary oferng. ‘Geos sling price or ros value ‘Shares sof bartered exchanged 2 = Upto 25% *% | Toa outstnang shares ver 2556 bik nt over 32 1/3% “Dm 4 2 Sve 331356 i® Pe a ae e en 4) Payment af ax 4) In case of primary offering ~The corporate sue shal le te eur and pay he | within 30 days from the date oF isting ofthe shares in the local stock exchange. - In case of secondary offering ~ The stock broker shall collect the tax and vent the same to BIR within 5 barking days ofeallecton. fae ‘The tax paid on inte pubic fering and secondary offering shall not be deductible or | 3) Not deductible for income tax purposes ‘oc purple | | © Gz dened rom Sale| cin dey am he se tcsixctange oot dsposton af ie. slock under barter, exchange or other | Sec 127 shall be exept fe capt jas tr Sd om te egies ano Scan disposition of shares | incre oc Stock msgs fee pei Sate 7) ‘Exercise: RFB Corporation, dossiy-helé corporation, fies an authorized capital sock of 100,000,000 shares wit bat value oF | Prpl.00/sharea5.of January 1, 2014. OF the 106,00,000 authorized shares, 25,000,000 tere subbed Se ly ald up by the folowing stocWoiers: Mr. Css Espen, 5,000,000; Mrs, Peart Gari, P500,000; Mr, Gor Maearll, 5,000,000; tr. John Loyd Tamayo, P5,000,000; Ms. Georgina anes, 5,000,000, FB Corporation finaly deciles to conduct an 1PO and inti oes 25,000,000 of is unissued shares to the investing | Bul at ISO per share. After the IPO in March 2034, RFB Corporation's tal ssued shares increased from 25 000000" 530,000,000 shares, At the 190, one of the exiting stockhollers, Mrs, Georgina James, has Mewise deciled to el es } tie 5,000,000 shares to the pubic at P50 per share. This 25,000,000 shares have been fered te oer ‘fering and 5,000,000 shares inte secondary offering, {uso : How mich the percentage tx onthe pmo? {Queso 2: How much te percentage tx onthe Seemay Ses of Ms. aes’ shres? uesion 3 Asuiming Ht. Jtm oy Tonaye does not el Meee stares cry he eft stad sls them a 2.00 L per shar at he IP, how uch te portage eon | 2. RETURNS AND PAYMENTS OF PERCENTAGE TAXES. ‘a. Monthly Percentage 1) The Monthly Percentage Tax Retr of taxpayers, whedher large or non large, shall be ‘Tax Return (RR No. 4-2002) fled, ad tae pad, | Be: Group A = 25 days following the end ofthe month; Group B24 days folowing the “b. Payment of Certain Percentage Taxes ____comnmunications tax ri | | | Sec. 125 — Amusements taxes | 20 days after the end ofthe quarter ['See: 126 —Tax on winnings | 20 days ater the tax wos wield and de ‘Sec. 127 — Stock transactions fax | 5 banking days from the date of collection | 30 dys tom the date of sting ofthe shares inthe Seve Peal stock erchaoneReSA: The Review School of Accountancy Large taxpayers shal flea consolidated return and pay the tax accordingly. | [BAS tx payments] Sev [Percentage tax | Re east P2600 per quarter ‘At least P200,000 per quarter I ‘At least 1,000,000 per year — ‘Atleast Pi, 000,000 per year lest P0000 pe en Titiest Pinooom sae || 2) Ato nunca conan | LL Gross sales/receipts (Gross purchases Net worth peccedng year close of each calendar Or fiscal year Inthe cae ofa person whose VAT regsration is cance and who becomes lable othe 39% | "ax on VAT-exempt persons, the tax shall accrue from the date of cancion and shall be. | | paid within 20 days after the end of ach taxable month. es ‘Any person reg from a business subject ta percentage tax shall notify the nearest internal revenue officer, file his return and pay the tax due thereon win 20 days after cosa Tis | toes fer } ‘9. Withholding of percentage | Ary perso, nar! or jana, wih reaped Wiss purchase ve tous of Wade or + | me | sins fom non VAT taxpayers subject tothe 3% percentage under Secon 116 of te Tar | | Code shale subject to percentage tax wibhokng at source a arate of 3% based onthe | paye's (or Sle’) salesrecopts. The withoing shal be done the axpaye payee Os to Tents percentage tax though withing by fg "Notice of Avalnert ofthe Opn to A Bay the Tax Through the Withoing Process” = Commissioner of internal | The Corisonr of Iter Revenue may Sea mas aunt fof ES | Revenue may prescribe a | und holon ase, ‘minimum amount of 1) When a taxpayer fa to issue receipts rms; | gross receipts 2) hen nore led, | 3) When there is reason to bee thatthe books of acount oF ater records do not Ti ‘correctly reflect the declarations made or to be made in return. 4) thorized agent bank; i e | andpiymentot the” | 2} even Dott oe bala pe Percentage tax yeaa — | 4) Duty authorzed Treasurer ofthe cty or muniipalty where the business oF principal place of | business is located, as the case may be, ee i Note: A person ible to percentage tax (excep large taxpayers) may, at his option, fle 3 separate return foreach branch or place of business, or a consolidated ret fo ll | branches or places of business. = L ~ = END THOT: Do not be impressed by things that can be seen by the naked eye, they are temporary. Focus instead ‘on things that the naked eye cannot see, they have eternal value. - Tamthewise “