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Amendments introduced by TRAIN

 Sec. 5 par. (b)

Cooperative Development Authority must now submit to BIR a tax incentive report,
which shall include information on the income tax, value-added tax, and other tax
incentives availed of by cooperatives registered and enjoying incentives which shall
be submitted to Department of Finance

 Sec. 6 par. (a)

Real Property values determined by Commissioner shall be subject to automatic


adjustment once every three (3) years through rules and regulations issued by the
Secretary of Finance based on the current Philippine valuation standards: Provided,

Also, adjustment in zonal valuation shall be valid provided they are:

 published in a newspaper of general circulation in the province, city or


municipality concerned, or
 in the absence thereof, shall be posted in the provincial capitol, city or
municipal hall and in two (2) other conspicuous public places therein:

Also, the basis of any valuation, including the records of consultations done, shall be
public records open to the inquiry of any taxpayer.

 Sec. 24

Tax Schedule (Jan. 1, 2018 – Dec. 31, 2022)

Not over P250,000 0%


“Over P250,000 but not over P400,000 20% of the excess over P250,000
“Over P400,000 but not over P800,000 P30,000 + 25% of the excess over
P400,000
“Over P800,000 but not over P2,000,000 P130,000 + 30% of the excess over
P800,000
“Over P2,000,000 but not over P8,000,000 P490,000 + 32% of the excess over
P2,000,000
“Over P8,000,000 P2,410,000 + 35% of the excess
over P8,000,000
Tax Schedule from Jan. 1, 2023 and onwards

Not over P250,000 0%


“Over P250,000 but not over P400,000 20% of the excess over P250,000
“Over P400,000 but not over P800,000 P30,000 + 25% of the excess over
P400,000
“Over P800,000 but not over P2,000,000 P130,000 + 30% of the excess over
P800,000
“Over P2,000,000 but not over P8,000,000 P490,000 + 32% of the excess over
P2,000,000
“Over P8,000,000 P2,410,000 + 35% of the excess
over P8,000,000

Note:

 Sec. 24, A (2) (b), which speaks of Rate of Tax on Income of Purely Self-
employed Individuals and professional whose Gross Sales or Gross Receipts
and Other Non-operating Income Does Not Exceed the VAT threshold, is a
NEW provision.

Under such paragraph, such individuals/professionals shall have the option to


avail of an eight percent (8%) tax on gross sales or gross receipts and other non-
operating income in excess of P250,000 in lieu of the graduated income tax rates
(tax schedule) and of percentage tax under Sec. 116.

 Sec. 24, A (2) (c), applies for Mixed Income Earners or those earning
compensation income and income from business or practice of profession.

Under the said paragraph, income from Compensation shall be taxed based from the
tax schedule under paragraph (a).

While income from Business or Profession shall be taxed as follows:

a. If Total Gross Sales and/or Gross Receipts and Other Non-operating


Income Do Not Exceed the VAT Threshold taxpayer may choose between the
graduated income tax rate or eight percent (8%) income tax based on gross
sales or gross receipts and other non-operating income in lieu of the
graduated income tax rates and the percentage tax under Section 116

b. If Total Gross Sales and/or GrossReceipts and Other Non-operating Income


Exceeds the VAT Threshold, taxpayer shall be taxed based from the
graduated income tax rate.
 SEC. 24 B – TAX ON PASSIVE INCOME

(1) Interests, Royalties, Prizes, and Other Winnings. –

Interest income received by an individual taxpayer (except a


nonresident individual) from a depository bank under the expanded foreign
currency deposit system shall be subject to a final income tax at the rate of
fifteen percent (15%) of such interest income: ** formerly 7 ½ % only.

In case of long-term deposit, the change is that in case of pre-


termination, the whole income tax on such income shall be due and the
year when it was pre-terminated is immaterial. Unlike in the old provision,
there are different percent if pre-terminated before the period.

(3) Capital gains from sale of shares of stock

Capital gains for sale of shares of stock are now taxed at 15% upon the
net capital gains from sale of stocks.

NOTE: The preferential tax treatments extended to RHQ, ROHQ, OBU or petroleum
contractors shall not be given to those who will just apply after effectivity of the
TRAIN law. All those enjoying such rights shall continue to be entitled.

 Sec. 31 Taxable Income

In the Train Law, in computing for the taxable income, there are no more
EXEMPTIONS.

Instead of Gross income minus deductions and exemptions, now we only deduct the
allowed deductions and there is no more exemtions.

 Sec. 32 - Gross Income

13th month and other benefits

It is now not be taxable provided that it shall not exceed P90,000.


It also include productivity incentives and Christmas Bonus.
 Sec. 33 – Special Treatment of Fringe Benefit

Final tax imposed is not 35% of the grossed-up monetary value of the fringe benefit.

 Sec. 34 - Deductions

Coverage of OSD - A general professional partnership and the partners comprising


such partnership may avail of the optional standard deduction only once, either by
the general professional partnership or the partners comprising the partnership

 Sec. 35 - Allowance of Personal Exemption

Under TRAIN law, there are no more exemptions that taxpayers may avail.
Thus, those single and those who are heads of the family cannot avail of any
exemptions.