Vat

Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from the
sale, exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sale. Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, rights, or property incident thereto. Donors Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers which are made by law as equivalent to testamentary disposition. Income Tax is a tax on all yearly profits arising from property, profession, trades or offices or as a tax on a persons income, emoluments, profits and the like. Percentage Tax is a business tax imposed on persons or entities who sell or lease goods, properties or services in the course of trade or business whose gross annual sales or receipts do not exceed P550,000 and are not VAT-registered. Value-Added Tax is a business tax imposed and collected from the seller in the course of trade or business on every sale of properties (real or personal) lease of goods or properties (real or personal) or vendors of services. It is an indirect tax, thus, it can be passed on to the buyer. Withholding Tax on Compensation is the tax withheld from individuals receiving purely compensation income. Expanded Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable quarter year. Final Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is not creditable against the income tax due of the payee for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the said income. Withholding Tax on Government Money Payments is the withholding tax withheld by government offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations.
Excise Tax is a tax imposed on goods manufactured or produced in the Philippines for domestic sale or consumption or any other disposition. It is also imposed on things that are imported.
CAPITAL GAINS TAX

Contents Description Final Capital Gains for Onerous Transfer of Real Property Classified as Capital Assets (Taxable and Exempt) Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange Annual Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange Related Revenue Issuances Codal References Frequently Asked Questions DESCRIPTION Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sale.
A. FINAL CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF REAL PROPERTY CLASSIFIED AS CAPITAL ASSETS (TAXABLE AND EXEMPT) Tax Form BIR Form 1706 Final Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Assets -Taxable and Exempt) Documentary Requirements 1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange 2) Photocopy of the Transfer Certificate of Title; Original Certificate of Title; or Condominium Certificate of Title 3) Certified True Copy of the tax declaration on the lot and/or improvement during nearest time of sale 4) Certificate of No Improvement issued by the Assessors office where the property has no declared improvement, if applicable or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees 5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable 6) Duly approved Tax Debit Memo, if applicable
7) Sworn Declaration of Interest as prescribed under Revenue Regulations 13-99, if the transaction is tax-exempt 8) Documents supporting the exemption Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures. Procedures File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the property is located. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer. Tax Rates For real property - 6%.
Deadline Within 30 days after each sale, exchange, transfer or other disposition of real property.
B. CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF SHARES OF STOCKS NOT TRADED THROUGH THE LOCAL STOCK EXCHANGE Tax Form BIR Form 1707 - Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange) Documentary Requirements 1) One original copy and one photocopy of the Notarized Deed of Sale/ Exchange of shares of stock 2) Photocopy of the Deed of Acquisition or proof of cost/ fair market value of the stocks at the time of acquisition 3) Photocopy of certificate of shares of stock 4) Photocopy of evidences of expenses related to sale 5) Photocopy of the Audited Financial Statements of issuing corporation nearest the date of sale or transfer 6) Duly approved Tax Debit Memo, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures. Procedures File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer. Tax Rates For Shares of Stocks Not Traded in the Stock Exchange - Not over P100,000 - 5% - Any amount in excess of P100,000 - 10%
Deadline Within 30 days after each sale or disposition of shares of stocks or real property. In case of installment sale, the return shall be filed within 30 days following the receipt of the first down payment and within 30 days following the subsequent installment payments. Only one return shall be filed for multiple transactions within the day.
C. ANNUAL CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF SHARES OF STOCKS NOT TRADED THROUGH THE LOCAL STOCK EXCHANGE Tax Form BIR Form 1707A - Annual Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange) Procedures File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor of stocks is registered. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer. Tax Rates For Shares of Stocks Not Traded in the Stock Exchange - Not over P100,000 - 5% - Any amount in excess of P100,000 - 10%
Deadline Individual Taxpayers On or before April 15 of each year covering all stock transactions of the preceding taxable year Corporate Taxpayers On or before the fifteenth (15) day of the fourth (4) month following the close of the taxable year covering all transactions of the preceding taxable year RELATED REVENUE ISSUANCES RR No. 2-98, RR No. 4-99, RR No.13-99, RR No. 7-2003 and RR No. 17-2003
CODAL REFERENCE Sec. 24C, Sec. 24D, Sec. 27D(2), Sec. 27D(5), Sec. 28(A)(7)(c), Sec. 28(B)(5)(c) and Sec. 39A of the National Internal Revenue Code (NIRC)
FREQUENTLY ASKED QUESTIONS 1) What is meant by capital asset? Capital asset means property held by the taxpayer (whether or not connected with his trade or business), but does not include a) stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year; or b) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business; or c) property used in the trade or business of a character which is subject to the allowance for depreciation provided in subsection (F) of Sec. 34 of the Code; or d) real property used in trade or business of the taxpayer. 2) What is meant by ordinary asset? Ordinary asset refers to all properties specifically excluded from the definition of capital assets under Sec. 39 (A)(1) of the NIRC.
3) What is meant by real property?
Real property shall have the same meaning attributed to that term under Article 415 of Republic Act No. 386, otherwise known as the Civil Code of the Philippines.
4) What does a real estate dealer refer to? A real estate dealer refers to any person engaged in the business of buying and selling or exchanging real properties on his own account as a principal and holding himself out as a full or part-time dealer in real estate.
5) What does a real estate developer refer to? Real estate developer refers to any person engaged in the business of developing real properties into subdivisions, or building houses on subdivided lots, or constructing residential or commercial units, townhouses and other similar units for his own account and offering them for sale or lease.
6) What does a real estate lessor refer to? Real estate lessor refers to any person engaged in the business of leasing or renting real properties on his own account as a principal and holding himself out as a lessor of real properties being rented out or offered for rent.
7) Who are considered engaged in the real estate business? Taxpayers who are considered engaged in the real estate business refer collectively to real estate dealers, real estate developers and/or real estate lessors. A taxpayer whose primary purpose of engaging in business, or whose Articles of Incorporation states that its primary purpose is to engage in the real estate business shall be deemed to be engaged in the real estate business.
8) Who are considered not engaged in the real estate business? Taxpayers who are considered not engaged in the real estate business refer to persons other than real estate dealers, real estate developers and/or real estate lessors.
9) Who are considered habitually engaged in the real estate business? Real estate dealers or real estate developers who are registered with the Housing and Land Use Regulatory Board (HULRB) or HUDCC
10)How can you determine whether a particular real property is a capital asset or an ordinary asset? a) Real properties shall be classified with respect to taxpayers engaged in the real estate business as follows: i) All real properties acquired by the real estate dealer shall be considered as ordinary assets. ii) All real properties acquired by the real estate developer, whether developed or undeveloped as of the time of acquisition, and all real properties which are held by the real estate developer primarily for sale or for lease to customers in the ordinary course of his trade or business or which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year and all real properties used in the trade or business, whether in the form of land, building, or other improvements, shall be considered as ordinary assets. iii) All real properties of the real estate lessor, whether land, building and/or improvements, which are for lease/rent or being offered for lease/rent, or otherwise for use or being used in the trade or business shall likewise be considered as ordinary assets. iv) All real properties acquired in the course of trade or business by a taxpayer habitually engaged in the sale of real property shall be considered as ordinary assets. Note: Registration with the HLURB or HUDCC as a real estate dealer or developer shall be sufficient for a taxpayer to be considered as habitually engaged in the sale of real estate. If the taxpayer is not registered with the HLURB or HUDCC as a real estate dealer or developer, he/it may nevertheless be deemed to be engaged in the real estate business through the establishment of substantial relevant evidence (such as consummation during the preceding year of at least six (6) taxable real estate sale transactions, regardless of amount; registration as habitually engaged in real estate business with the Local Government Unit or the Bureau of Internal Revenue, etc.) b) In the case of taxpayer not engaged in the real estate business, real properties, whether land, building, or other improvements, which are used or being used or have been previously used in trade or business of the taxpayer shall be considered as ordinary assets. c) In the case of taxpayers who changed its real estate business to a non-real estate business, real properties held by these taxpayer shall remain to be treated as ordinary assets. d) In the case of taxpayers who originally registered to be engaged in the real estate business but failed to subsequently operate, all real properties acquired by them shall continue to be treated as ordinary assets. e) Real properties formerly forming part of the stock in trade of a taxpayer engaged in the real estate business, or formerly being used in the trade or business of a taxpayer engaged or not
engaged in the real estate business, which were later on abandoned and became idle, shall continue to be treated as ordinary assets. Provided however, that properties classified as ordinary assets for being used in business by a taxpayer engaged in business other than real estate business are automatically converted into capital assets upon showing proof that the same have not been used in business for more than two years prior to the consummation of the taxable transactions involving said properties f) Real properties classified as capital or ordinary asset in the hands of the seller/transferor may change their character in the hands of the buyer/transferee. The classification of such property in the hands of the buyer/transferee shall be determined in accordance with the following rules: i) Real property transferred through succession or donation to the heir or donee who is not engaged in the real estate business with respect to the real property inherited or donated, and who does not subsequently use such property in trade or business, shall be considered as a capital asset in the hands of the heir or donee. ii) Real property received as dividend by the stockholders who are not engaged in the real estate business and who do not subsequently use such property in trade or business, shall be considered as a capital asset in the hands of the recipients even if the corporation which declared the real property dividends is engaged in real estate business. iii) The real property received in an exchange shall be treated as ordinary asset in the hands of the case of a tax-free exchange by taxpayer not engaged in real estate business to a taxpayer who is engaged in real estate business, or to a taxpayer who, even if not engaged in real estate business, will use in business the property received in exchange. g) In the case of involuntary transfers of real properties, including expropriations or foreclosure sale, the involuntariness of such sale shall have no effect on the classification of such real property in the hands of the involuntary seller, either as capital asset or ordinary asset as the case may be.
11) What is the basis in the valuation of property? The value of the real property will be based on the selling price, fair market value as determined by the Commissioner (zonal value) or the fair market value as shown in the schedule of values of the Provincial or City Assessor, whichever is higher. If there is no zonal value, the taxable base is whichever is higher of the gross selling price per sales documents or the fair market value that appears in the latest tax declaration. If there is an improvement, the FMV per latest tax declaration at the time of the sale or disposition, duly certified by the City/Municipal Assessor shall be used. No adjustments shall be added on the said value, provided that the tax declaration bears the upgraded fair market value of the said property pursuant to Section 219 of R.A. No. 7160, otherwise known as the Local
Government Code of 1991 and the last paragraph of the Local Assessment Regulations No. 1-92 dated October 6, 1992. In case the tax declaration being presented was issued three (3) or more years prior to the date of sale or disposition of the real property, the seller/transferor shall be required to submit a certification from the City/Municipal Assessor whether or not the same is still the latest tax declaration covering the said real property. Otherwise, the taxpayer shall secure its latest tax declaration and shall submit a copy thereof duly certified by the said Assessor. (RAMO 1-2001) For shares of stocks, it will be based on the net capital gains realized from the sale, barter, exchange or other disposition of shares of stocks in a domestic corporation, considered as capital assets not traded through the local stock exchange.
12) What are the applicable tax rates of Capital Gains Tax under the National Internal Revenue Code of 1997? a) Real Properties - 6 % b) For Shares of Stocks not Traded in the Stock Exchange, on the net Capital Gains - Not over P100,000 - 5% - Any amount in excess of P100,000 - 10%
13) Who are required to file the Final Capital Gains Tax return? Every person, whether natural or juridical, resident or non-resident, including estates and trusts, who sells, transfers, exchanges or disposes real properties located in the Philippines classified as capital assets, including pacto de retro sales and other forms of conditional sales or shares of stocks in domestic corporations not traded through the local stock exchange classified as capital assets.
14) What is the procedure in the filing of Final Capital Gains Tax return? File the Final Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor is registered, for shares of stocks or where the property is located, for real property. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer.
15) Who/what are considered exempt from the payment of Final Capital Gains Tax?
Dealer in securities, regularly engaged in the buying and selling of securities An entity exempt from the payment of income tax under existing investment incentives and other special laws An individual or non-individual exchanging real property solely for shares of stocks resulting in corporate control A government entity or government-owned or controlled corporation selling real property If the disposition of the real property is gratuitous in nature Where the disposition is pursuant to the CARP law
16) Who are conditionally exempt from the payment of Final Capital Gains Tax? Natural persons who dispose their principal residence, provided that the following criteria are met: The proceeds of the sale of the principal residence have been fully utilized in acquiring or constructing new principal residence within eighteen (18) calendar months from the date of sale or disposition; The historical cost or adjusted basis of the real property sold or disposed will be carried over to the new principal residence built or acquired; The Commissioner has been duly notified, through a prescribed return, within thirty (30) days from the date of sale or disposition of the persons intention to avail of the tax exemption; Exemption was availed only once every ten (10) years; and There is no full utilization of the proceeds of sale or disposition. The portion of the gain presumed to have been realized from the sale or disposition will be subject to Capital Gains Tax. In case of sale/transfer of principal residence, the Buyer/Transferee shall withhold from the seller and shall deduct from the agreed selling price/consideration the 6% capital gains tax which shall be deposited in cash or managers check in interest-bearing account with an Authorized Agent Bank (AAB) under an Escrow Agreement between the concerned Revenue District Officer, the Seller and the Transferee, and the AAB to the effect that the amount so deposited, including its interest yield, shall only be released to such Transferor upon certification by the said RDO that the proceeds of the sale/disposition thereof has, in fact, been utilized in the acquisition or construction of the Seller/Transferors new principal residence within eighteen (18) calendar months from date of the said sale or disposition. The date of sale or disposition of a property refers to the date of notarization of the document evidencing the transfer of said
property. In general, the term Escrow means a scroll, writing or deed, delivered by the grantor, promisor or obligor into the hands of a third person, to be held by the latter until the happening of a contingency or performance of a condition, and then by him delivered to the grantee, promise or obligee.
17) What is a Certificate Authorizing Registration? Certificate Authorizing Registration (CAR) is a certification issued by the Commissioner or his duly authorized representative attesting that the transfer and conveyance of land, buildings/improvements or shares of stock arising from sale, barter or exchange have been reported and the taxes due inclusive of the documentary stamp tax, have been fully paid. CARs shall now have a validity of one (1) year from date of issue. In case of failure to present the same to the Registry of Deeds (RD) within the one (1) year period, the same shall be presented for revalidation to the District Office where the CAR was issued. The revalidation, evidenced by stamping the phrase "revalidated on __________ to expire on ___________" in a conspicuous space in the CAR, shall be good for another one-year period, after which the CAR losses its validity. (RMO 15-2003)
DOCUMENTARY STAMP TAX Contents Description Tax Forms Documentary Requirements Tax Rates Procedures Dealines Related Revenue Issuances Codal References Frequently Asked Questions
DESCRIPTION Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.
TAX FORM
BIR Form 2000 (Documentary Stamp Tax Declaration Return)
DOCUMENTARY REQUIREMENTS 1) Photocopy of document(s) to which the documentary stamp shall be affixed, in case of constructive affixture of Documentary Stamp Tax 2) For metering machine users, a schedule of the details of usage or consumption of documentary stamp 3) Proof of exemption under special law, if applicable 4) Duly approved Tax Debit Memo, if applicable
TAX RATES Tax Code Section 174 Document Debentures and Certificates of Indebtedness Taxable Unit P200.00 or fraction thereof Tax Due Per Unit P1.50 % of Unit .75% Taxable Base Face value of Document
P200.00 or Original Issue of fraction Shares of Stock thereof with par value 175
2.00
1% 1%
P200.00 or Original Issue of fraction 2.00 Shares of Stock thereof based without par on actual value consideration Sales, Agreements to Sell, Memoranda of Sales, Deliveries or P200.00 or Transfer of Due- fraction bills, Certificate thereof of Obligation, or Shares or Certificates of Stock
Par value of shares of stocks actual consideration for the issuance of shares of stocks
176
1.50
.75%
Par value of such due-bills, certificate of obligation or stocks
177
Bonds, Debentures, Certificate of P200.00 or Stock or fraction Indebtedness thereof issued in foreign Countries Certificate of Profits or Interest in Property or Accumulation Bank Checks, Drafts, Certificate of Deposit not bearing interest and other Instruments P200.00 or fraction thereof
1.50
.75%
Par value of such bonds, debentures or Certificate of Stocks
178
.50
.25%
Face value of such certificate / memorandum
179
On each Document
1.50
180
Bonds, Loan Agreements, Promissory Notes, Bills of Exchange, Drafts, Instruments and Securities Issued by the Government or any of its Instrumentalities, P200.00 or Deposit fraction Substitutes Debt thereof Instrument, Certificates of Deposit bearing interest and others not payable on sight or demand (except loan agreement or promissory notes exceeding P250,000.00 for
.30
.15%
Face value of the instrument/document
personal use or family use) Bills of Exchange or order drawn in foreign country but payable in the Philippines Foreign Bills of Exchange and Letter of Credit P200.00 or fraction thereof Face value of such bill of exchange or order or the equivalent of such value, if expressed in foreign currency Face value of such bill of exchange or order or the equivalent of such value, if expressed in foreign currency Amount Insured by the Policy
181
.30
.15%
182
P200.00 or fraction thereof P200.00 or fraction thereof P4.00 premium or fraction thereof P4.00 premium or fraction thereof
.30
.15%
183
Life Insurance Policies Policies Of Insurance upon Property Fidelity Bonds and other Insurance Policies
.50
.25%
184
.50
12.5%
Premium charged
185
.50
12.5%
Premium charged Capital of annuity, or if unknown 33 1/3 times the annual income Value or amount of the Plan Premium charged
186
Policies of P200.00 or Annuities, fraction Annuity or other thereof instruments Pre-Need Plans P500.00 or fraction thereof
1.50
75%
186
.50
.10%
187
P4.00 or Indemnity Bonds fraction thereof Certificates of Damage or otherwise and Certificate or Each document issued Certificate by any customs officers, marine surveyor, notary
.30
7.5%
188
15.00
public and certificate required by law or by rules and regulations of a public office 189 Warehouse Receipts (except Each Receipt 15.00 if value does not exceed P200.00) P1.00 cost of ticket and Jai-alai, Horse Race Tickets, lotto or Other Authorized Number Games Additional P0.10 on every P1.00 .10 or fraction thereof if cost of ticket exceeds P1.00
190
10%
Cost of the ticket
Bills of Lading or Receipts 191 (except charter party) 193 Powers of Attorney Each Document First 2,000 Lease and other Hiring agreements of memorandum or contract for hire, use or rent of any land or tenements or portions thereof For every P1,000 or fractional part thereof 3.00 in excess of the first 1.00 P2,000 for each year of the term of the contract or agreement 20.00 10.00 5.00 Each Proxy 15.00
1.5% 1%
194
195
Mortgages First 5,000 Pledges of lands, estate, or On each
.4% .2%
Amount Secured Amount Secured
property and Deeds of Trust
P5,000 or fractional part thereof in excess of 5,000 First 1,000 For each additional P1,000 or fractional part thereof in excess of P1,000 1,000 tons and below Consideration or Fair Market Value, whichever is higher (if government is a party, basis shall be the consideration)
196
Deed of Sale, instrument or writing and Conveyances of Real Property (except grants, patents or original certificate of the government)
15.00 15.00
1.5% 1.5%
P500.00 for the first 6 months PlusP50 each month or fraction thereof in excess of 6 months
1,001 to 10,000 tons 197 Charter parties and Similar Instruments
P1,000 for the first 6 months Plus P100 each month or fraction thereof in excess of 6 months
Tonnage and duration of the contract
Over 10,000 tons P1,500 for the first 6 months Plus P150 each month or fraction
thereof in excess of 6 months
PROCEDURES File BIR Form No. 2000 in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor is registered, for shares of stocks or where the property is located, for real property. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer. Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the seller.
DEADLINES The Documentary Stamp Tax return (BIR Form 2000) shall be filed in triplicate (two copies for the BIR and one copy for the taxpayer) within five (5) days after the close of the month when the taxable document was made signed, issued, accepted or transferred; when reloading a metering machine becomes necessary; or upon remittance by Collection Agents of collection from sale of loose stamps. The Documentary Stamp Tax shall be paid upon filing of the return.
RELATED REVENUE ISSUANCES RR No. 6-2001, RMO No. 8-98, RMO No. 15-2001
CODAL REFERENCE Sec. 173 to Sec. 201 of the National Internal Revenue Code
FREQUENTLY ASKED QUESTIONS 1) Who are required to file Documentary Stamp Tax Declaration Return?
a) In case of constructive affixture of documentary stamps, by the persons making, signing, issuing, accepting or transferring documents, instruments, loan agreements and papers, acceptances, assignments, sales and conveyances of the obligation, right or property incident thereto wherever the document is made, signed, issued, accepted or transferred when the obligation or right arises from Philippine sources or the property is situated in the Philippines at the same time such act is done or transaction had; b) By metering machine user who imprints the Documentary Stamp Tax due on the taxable documents; and c) By Revenue Collection Agent, for remittance of sold loose documentary stamps. Note: Wherever one party to the taxable document enjoys exemption from the tax imposed, the other party who is not exempt will be the one directly liable to file Documentary Stamp Tax Declaration and pay the applicable stamp tax.
2) Where is the Documentary Stamp Tax Declaration Return filed? In the Authorized Agent Bank (AAB) within the territorial jurisdiction of the RDO which has jurisdiction over the residence or principal place of business of the taxpayer or where the property is located in case of sale of real property or where the Collection Agent is assigned. In places where there is no Authorized Agent Bank, the return will be filed with the Revenue Collection Officer or duly authorized City or Municipal Treasurer where the taxpayer's residence or principal place of business is located or where the property is located in case of sale of real property or where the Collection Agent is assigned.
3) What are the documents/papers not subject to Documentary Stamp Tax? Policies of insurance or annuities made or granted by a fraternal or beneficiary society, order, association or cooperative company, operated on the lodge system or local cooperation plan and organized and conducted solely by the members thereof for the exclusive benefit of each member and not for profit Certificates of oaths administered by any government official in his official capacity or acknowledgement by any government official in performance of his official duty Written appearance in any court by any government official in his official capacity Certificates of the administration of oaths to any person as to the authenticity of any paper required to be filed in court by any person or party thereto, whether the proceedings be civil or criminal
Papers and documents filed in court by or for the national, provincial, city or municipal governments Affidavits of poor persons for the purpose of proving poverty Statements and other compulsory information required of persons or corporations by the rules and regulations of the national, provincial, city or municipal government exclusively for statistical purposes and which are wholly for the use of the Bureau or office in which they are filed, and not at the instance or for the use or benefit of the person filing them Certified copies and other certificates placed upon documents, instruments and papers for the national, provincial, city or municipal governments made at the instance and for the sole use of some other branch of the national, provincial, city or municipal governments Certificates of the assessed value of lands, not exceeding P200 in value assessed, furnished by the provincial, city or municipal Treasurer to applicants for registration of title to land
4) What are the implications of failure to stamp taxable documents? The untaxed document will not be recorded, nor will it or any copy thereof or any record of transfer of the same be admitted or used in evidence in court until the requisite stamp or stamps have been affixed thereto and cancelled No notary public or other officer authorized to administer oaths will add his jurat or acknowledgment to any document subject to Documentary Stamp Tax unless the proper documentary stamps are affixed thereto and cancelled.
DONORS TAX Contents Description Tax Forms Documentary Requirements Tax Rates Procedures Dealines Related Revenue Issuances Codal References Frequently Asked Questions DESCRIPTION Donors Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.
TAX FORM BIR Form 1800 Donors Tax Return
DOCUMENTARY REQUIREMENTS The following requirements must be submitted upon field or office audit of the tax case before the Tax Clearance Certificate/Certificate Authorizing Registration can be released: 1. 2. 3. 4. Deed of Donation Sworn Statement of the relationship of the donor to the donee Proof of tax credit, if applicable Certified true copy(ies) of the Original/Transfer/Condominium Certificate of Title (front and back ) of lot and/or improvement donated, if applicable 5. Certified true copy(ies) of the latest Tax Declaration (front and back pages) of lot and/or improvement, if applicable 6. Certificate of No Improvement issued by the Assessors office where the properties have no declared improvement, if applicable 7. Proof of valuation of shares of stocks at the time of donation, if applicable
For listed stocks - newspaper clippings or certification issued by the Stock Exchange as to the par value per share o For unlisted stocks - latest audited Financial Statements of the issuing corporation with computation of the book value per share 8. Proof of valuation of other types of personal properties, if applicable 9. Proof of claimed deductions, if applicable 10. Copy of Tax Debit Memo used as payment, if applicable Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures.
TAX RATES Effective January 1, 1998 to present Net Gift Over P100,000.00 100,000.00 200,000.00 500,000.00 1,000,000.00 3,000,000.00 5,000,000.00 10,000,000.00 Notes: 1. Rate applicable shall be based on the law prevailing at the time of donation. 2. When the gifts are made during the same calendar year but on different dates, the donors tax computed on the total net gifts during the year. Donation made to a stranger is subject to 30% of the net gift. A stranger is a person who is not a: 200,000.00 500,000.00 1,000,000.00 3,000,000.00 5,000,000.00 10,000,000.00 and over But not Over The Tax Shall be exempt 0 P 2,000.00 14,000.00 44,000.00 204,000.00 404,000.00 1,004,000.00 2% 4% 6% 8% 10% 12% 15% 100,000.00 200,000.00 500,000.00 1,000,000.00 3,000,000.00 5,000,000.00 10,000,000.00 Plus Of the Excess Over
brother, sister (whether by whole or half blood), spouse, ancestor and lineal descendants; or relative by consanguinity in the collateral line within the fourth degree of relationship (up to first cousin)
Effective July 28, 1992 to December 31, 1997 Net Gift Over P50,000.00 50,000.00 100,000.00 200,000.00 500,000.00 1,000,000.00 3,000,000.00 5,000,000.00 100,000.00 200,000.00 500,000.00 1,000,000.00 3,000,000.00 5,000,000.00 and over But not Over The Tax Shall be Exempt 1.5% P 750.00 3,750.00 18,750.00 58,750.00 258,750.00 558,750.00 3% 5% 8% 10% 15% 20% 50,000.00 100,000.00 200,000.00 500,000.00 1,000,000.00 3,000,000.00 5,000,000.00 Plus Of the Excess Over
Donation made to a stranger is subject to 10% of the net gift. A stranger is a person who is not a:

brother, sister (whether by whole or half blood), spouse, ancestor and lineal descendants; or relative by consanguinity in the collateral line within the fourth degree of relationship
Effective before July 28, 1992 Net Gift Over P1,000.00 But not Over The Tax Shall be Exempt Plus Of the Excess Over
1,000.00 50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00 625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00
50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00 625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00
1.5% P 735.00 1,360.00 2,110.00 5,110.00 9,610.00 21,610.00 36,610.00 54,610.00 80,860.00 110,860.00 145,860.00 185,860.00 545,860.00 925,860.00 2.5% 3% 6% 9% 12% 15% 18% 21% 24% 28% 32% 36% 38% 40%
1,000.00 50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00 625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00
Donation made to a stranger is subject to 20% of the net gift. A stranger is a person who is not a:

brother, sister (whether by whole or half blood), spouse, ancestor and lineal descendants; or relative by consanguinity in the collateral line within the fourth degree of relationship
PROCEDURES File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with any Authorized Agent Bank (AAB) of the RDO having jurisdiction over the place of the domicile of the donor at the time of the transfer. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer where the donor was domiciled at the time of the transfer, or if there is no legal residence in the Philippines, with Revenue District No. 39 - South Quezon City.
In the case of gifts made by a non-resident alien, the return may be filed with Revenue District No. 39 - South Quezon City, or with the Philippine Embassy or Consulate in the country where donor is domiciled at the time of the transfer. Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the donor.
DEADLINES Within thirty days (30) after the date the gift (donation) is made. A separate return will be filed for each gift (donation) made on the different dates during the year reflecting therein any previous net gifts made during the same calendar year If the gift (donation) involves conjugal/community/property, each spouse will file separate returns corresponding to his/ her respective share in the conjugal/community property. This rule will also apply in the case of co-ownership over the property
RELATED REVENUE ISSUANCES RR No. 2-2003 and RMO No. 1-98
FREQUENTLY ASKED QUESTIONS 1. Who are required to file the Donors Tax Return? Every person, whether natural or juridical, resident or non-resident, who transfers or causes to transfer property by gift, whether in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible. 2) What are the procedures in filing the Donors Tax return? File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with any Authorized Agent Bank (AAB) of the RDO having jurisdiction over the place of the domicile of the donor at the time of the transfer. In places where there are no AAB, the return will be filed
directly with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer where the donor was domiciled at the time of the transfer, or if there is no legal residence in the Philippines, with Revenue District No. 39 - South Quezon City. In the case of gifts made by a non-resident alien, the return may be filed with Revenue District No. 39 - South Quezon City, or with the Philippine Embassy or Consulate in the country where donor is domiciled at the time of the transfer. Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the donor.
3) What donations are tax exempt? Dowries or donations made on account of marriage before its celebration or within one year thereafter, by parents to each of their legitimate, recognized natural, or adopted children to the extent of the first P10,000 Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-government organization, trust or philantrophic organization or research institution or organization, provided not more than 30% of said gifts will be used by such donee for administration purposes Encumbrances on the property donated if assumed by the donee in the deed of donation Donations made to the following entities as exempted under special laws: - Aquaculture Department of the Southeast Asian Fisheries Development Center of the Philippines Development Academy of the Philippines Integrated Bar of the Philippines International Rice Research Institute National Social Action Council Ramon Magsaysay Foundation Philippine Inventors Commission
Philippine American Cultural Foundation Task Force on Human Settlement on the donation of equipment, materials and services
4) What are the bases in the valuation of property? If the gift is made in property, the fair market value at that time will be considered the amount of gift In case of real property, the taxable base is the fair market value as determined by the Commissioner of Internal Revenue (Zonal Value) or fair market value as shown in the latest schedule of values of the provincial and city assessor (MV per Tax Declaration), whichever is higher If there is no zonal value, the taxable base is the fair market value that appears in the latest tax declaration If there is an improvement, the value of improvement is the construction cost per building permit and or occupancy permit plus 10% per year after year of construction, or the market value per latest tax declaration.
ESTATE TAX Contents Description Tax Forms Documentary Requirements Tax Rates Procedures Dealines Related Revenue Issuances Codal References Frequently Asked Questions
DESCRIPTION Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary. TAX FORM BIR Form 1801 - Estate Tax Return DOCUMENTARY REQUIREMENTS 1) Notice of Death duly received by the BIR, if gross estate exceeds P 20,000 for deaths occurring on or after Jan. 1, 1998; or if the gross estate exceeds P 3000 for deaths occurring prior to January 1, 1998 2) Certified true copy of the Death Certificate 3) Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially 4) Court Orders/Decision, if the estate is settled judicially; 5) Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate 6) A certified true copy of the schedule of partition of the estate and the order of the court approving the same, if applicable
7) Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of real property(ies) (front and back pages), if applicable 8) Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable 9) "Certificate of No Improvement" issued by the Assessor's Office declared properties have no declared improvement or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees 10)Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if applicable 11)Photo copy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if applicable 12)Photo copy of certificate of stocks, if applicable 13)Proof of valuation of shares of stocks at the time of death, if applicable - For listed stocks - newspaper clippings or certification from the Stock Exchange - For unlisted stocks - latest audited Financial Statement of issuing corporation with computation of book value per share 14)Proof of valuation of other types of personal property, if applicable 15)Proof of claimed tax credit, if applicable 16)CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds two million pesos, if applicable 17)Certification of Barangay Captain for claimed Family Home 18)Duly notarized Promissory Note for "Claims against the Estate" arising from Contract of Loan 19)Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent 20)Proof of the claimed "Property Previously Taxed" 21)Proof of claimed "Transfer for Public Use" 22)Copy of Tax Debit Memo used as payment, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures. TAX RATES
Effective January 1, 1998 up to Present If the Net Estate is Over But not Over The Tax Plus Of the Excess Over P 200,000.00 500,000.00 2,000,000.00 5,000,000.00 10,000,000.00
Shall be P 200,000.00 Exempt P 200,000.00 500,000.00 0 5% 500,000.00 2,000,000.00 P 15,,000.00 8 % 2,000,000.00 5,000,000.00 135,000.00 11 % 5,000,000.00 10,000,000.00 465,000.00 15 % 10,000,000.00 1,2l5,000.00 20 % Effective After July 28, 1992 up to December 31, 1997 If the Net Estate is Over But not Over The Tax Shall be P 200,000.00 P 200,000.00 500,000.00 500,000.00 2,000,000.00 2,000,000.00 5,000,000.00 5,000,000.00 10,000,000.00 10,000,000.00 Effective Before July 28, 1992 If the Net Estate is Over But not Over 0% 5% 8% 12 % 21% 35 % Plus
Of the Excess Over P 200,000.00 500,000.00 2,000,000.00 5,000,000.00 10,000,000.00
P 15,000.00 135,000.00 495,000.00 1,545,000.00
The Tax Shall be Exempt 3% P 1,200.00 2,200.00 3,450.00 8,450.00 15,950.00 35,950.00 60,950.00 90,950.00
Plus
Of the Excess Over P 10,000.00 50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00
P P 10,000.00 50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00
10,000.00 50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00 625,000.00
4% 5% 10% 15 % 20% 25% 30% 35%
625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00
750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00
134,700.00 184,700.00 240,950.00 303,450.00 833,450.00 1,393,450.00
40% 45% 50% 53% 56% 60%
625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00
Effective September 15, 1950 to December 31, 1972 Estate and Inheritance Tax From 5,000.00 7,000.00 18,000.00 20,000.00 20,000.00 30,000.00 50,000.00 100,000.00 250,000.00 500,000.00 0 5,000.00 12,000.00 30,000.00 50,000.00 70,000.00 100,000.00 150,000.00 250,000.00 500,000.00 1,000,000.00 To 5,000.00 12,000.00 30,000.00 50,000.00 70,000.00 100,000.00 150,000.00 250,000.00 500,000.00 1,000,000.00 over ESTATE Exempt 1.0% 2.0% 2.5% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% INHERITANCE Exempt 2% 4% 6% 8% 12% 14% 16% 18% 20% 22%
Effective October 1, 1946 to September 14, 1950 Estate and Inheritance Tax From 3,000.00 7,000.00 20,000.00 20,000.00 30,000.00 30,000.00 40,000.00 40,000.00 50,000.00 0 3,000.00 10,000.00 30,000.00 50,000.00 80,000.00 110,000.00 150,000.00 190,000.00 To 3,000.00 10,000.00 30,000.00 50,000.00 80,000.00 110,000.00 150,000.00 190,000.00 240,000.00 ESTATE Exempt 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5.0% INHERITANCE Exempt 2% 4% 6% 8% 10% 12% 14% 15%
Effective July 1, 1939 to September 30, 1946 Estate and Inheritance Tax FROM 0 TO 3,000.00 Exempt Exempt
3,000.00 10,000.00 30,000.00 50,000.00 80,000.00 110,000.00 150,000.00 190,000.00
10,000.00 30,000.00 50,000.00 80,000.00 110,000.00 150,000.00 190,000.00 240,000.00
1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5.0%
1% 2% 3% 4% 5% 6% 7% 8%
Effective March 10, 1922 to October 28, 1936 Inheritance Tax From 0 50,000.00 250,000.00 500,000.00 Effective 1916 to March 9, 1922 Inheritance Tax From 0 10,000.00 30,000.00 60,000.00 100,000.00 150,000.00 To 10,000.00 30,000.00 60,000.00 100,000.00 150,000.00 250,000.00 INHERITANCE 1% 2.0% 3.0% 4.0% 5.0% 6.0% To 50,000.00 250,000.00 500,000.00 over INHERITANCE 1% 1.5% 2.5% 4.0%
PROCEDURES The Estate Tax Return (BIR Form 1801) shall be filed and payment be made with an Authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of residence of the decedent at the time of his/her death. If there is no AAB within the residence of the decedent, the Estate Tax Return must be filed and the payment made with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO having jurisdiction over the place of residence of the decedent. If the required filer has no legal residence in the Philippines, the Estate Tax return shall be filed and paid with:
(a) The Office of the Revenue District Officer, Revenue District Office No. 39, South Quezon City; or (b) The Philippine Embassy or Consulate in the country where decedent is residing at the time of his/her death.
DEADLINES File the return within six (6) months from decedent's death. However, the Commissioner may, in meritorious cases, grant extension not exceeding thirty (30) days. The Estate Tax imposed shall be paid at the time the return is filed by the executor or administrator or the heirs. However, when the Commissioner finds that payment on the due date of the Estate Tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts or two (2) years in case the estate is settled extra-judicially. Extension of Time of Filing: When the Commissioner finds that the payment of the estate tax or of any part thereof would imposed undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case it settled extra-judicially. Where the request for extension is by reason of negligence, intentional disregard of rules and regulations, or fraud on the part of the taxpayer, no extension will be granted by the Commissioner. If an extension is granted, the Commissioner or his duly authorized representative may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount, not exceeding double the amount of tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance in the terms of extension. The request for extension shall be filed with the Revenue District Officer (RDO) where the estate is required to secure its TIN and file the estate tax return. The application shall be approved by the Commissioner or his duly authorized representative. RELATED REVENUE ISSUANCES RR No. 2-2003, RMO No. 26-82, RMO No. 31-82, RMC No. 1-98,
FREQUENTLY ASKED QUESTIONS 1) Who are required to file the Estate Tax return?
a) The executor or administrator or any of the legal heirs of the decedent or non-resident of the Philippines under any of the following situation: In all cases of transfer subject to Estate Tax;
- Where though exempt from Estate Tax, the gross value of the estate exceeds two hundred thousand P 200,000.00; and - Where regardless of the gross value, the estate consists of registered or registrable property such as real property, motor vehicle, share of stocks or other similar property for which a clearance from the Bureau of Internal Revenue (BIR) is required as a condition precedent for the transfer of ownership thereof in the name of the transferee. b) Where there is no executor or administrator appointed, qualified and acting within the Philippines, then any person in actual or constructive possession of any property of the decedent must file the return. c) The Estate Tax imposed under the Tax Code shall be paid by the executor or administrator before the delivery of the distributive share in the inheritance to any heir or beneficiary. Where there are two or more executors or administrators, all of them are severally liable for the payment of the tax. The estate tax clearance issued by the Commissioner or the Revenue District Officer (RDO) having jurisdiction over the estate, will serve as the authority to distribute the remaining/distributable properties/share in the inheritance to the heir or beneficiary. d) The executor or administrator of an estate has the primary obligation to pay the estate tax but the heir or beneficiary has subsidiary liability for the payment of that portion of the estate which his distributive share bears to the value of the total net estate. The extent of his liability, however, shall in no case exceed the value of his share in the inheritance.
2) What are the procedures in the filing of the Estate Tax Return and payment of the corresponding taxes?
a) The Estate Tax Return (BIR Form 1801) shall be filed and payment made with an Authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of residence of the decedent at the time of his/her death. b) If there is no AAB within the residence of the decedent, the Estate Tax Return must be filed and the payment made with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO having jurisdiction over the place of residence of the decedent. c) If the required filer has no legal residence in the Philippines, the Estate Tax return will be filed and payment be made with: - The Office of the Revenue District Officer, Revenue District Office No. 39, South Quezon City; or - The Philippine Embassy or Consulate in the country where decedent is residing at the time of his/her death. d) Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the decedent. e) Payment of Estate tax by installment -In case the available cash of the estate is not sufficient to pay its total estate tax liability, the estate may be allowed to pay the tax by installment and a clearance shall be released only with respect to the property, the corresponding/computed tax on which has been paid. 3) What are included in gross estate? For resident alien decedents/citizens: a) Real or immovable property, wherever located b) Tangible personal property, wherever located c) Intangible personal property, wherever located For non-resident decedent/non-citizens: a) Real or immovable property located in the Philippines b) Tangible personal property located in the Philippines c) Intangible personal property - with a situs in the Philippines such as: Franchise which must be exercised in the Philippines
- Shares, obligations or bonds issued by corporations organized or constituted in the Philippines - Shares, obligations or bonds issued by a foreign corporation 85% of the business of which is located in the Philippines - Shares, obligations or bonds issued by a foreign corporation if such shares, obligations or bonds have acquired a business situs in the Philippines ( i. e. they are used in the furtherance of its business in the Philippines) Shares, rights in any partnership, business or industry established in the Philippines
4) What are excluded from gross estate? GSIS proceeds/ benefits Accruals from SSS
Proceeds of life insurance where the beneficiary is irrevocably appointed Proceeds of life insurance under a group insurance taken by employer (not taken out upon his life) War damage payments Transfer by way of bona fide sales Transfer of property to the National Government or to any of its political subdivisions Separate property of the surviving spouse Merger of usufruct in the owner of the naked title Properties held in trust by the decedent Acquisition and/or transfer expressly declared as not taxable
5) What will be used as basis in the valuation of property?
The properties subject to Estate Tax shall be appraised based on its fair market value at the time of the decedent's death.
The appraised value of the real estate shall be whichever is higher of the fair market value, as determined by the Commissioner (zonal value) or the fair market value, as shown in the schedule of values fixed by the Provincial or City Assessor. If there is no zonal value, the taxable base is the fair market value that appears in the latest tax declaration. If there is an improvement, the value of improvement is the construction cost per building permit or the fair market value per latest tax declaration.
6) What are the allowable deductions for Estate Tax purposes? For Resident Decedent Expenses, losses, indebtedness and taxes a) Funeral Expenses i) ii) CA 466 - 5 % of gross estate (up to Dec. 31, 1972) PD 69 - 5 % of gross estate but not exceeding P 50,000 (Jan. 1, 1973 to July 27, 1992)
iii) RA 7499 - 5 % of gross estate but not exceeding P 100,000 (July 28, 1992 to December 3l, 1997) iv) RA 8424 - 5% of gross estate but not exceeding P 200,000 (Jan. 1,1998)
b) Judicial expenses of the testamentary/intestate proceedings c) Valid claims against the estate d) Claims against insolvent person e) Unpaid mortgages/indebtedness f) Unpaid taxes g) Casualty losses h) Property previously taxed or vanishing deductions
Requisites:
o Present decedent must have died within five (5) years from date of death of prior decedent or date of gift o The property with respect to which the deduction is claimed must have formed part of the gross estate situated in the Philippines of the prior decedent or taxable gift of the donor o The property must be identified as the same property received from prior decedent or donor or the one received in exchange therefore o The estate taxes on the transmission of the prior estate or the donors tax on the gift must have been finally determined and paid o No vanishing deduction on the property or the property given in exchange therefore was allowed to the prior estate i) Transfer for public purpose j) Share of surviving spouse k) Medical expenses - those incurred by the decedent within one (1) year prior to his/her death which shall be substantiated with receipts (NOTE: Amount allowable as deduction depends on the law prevailing at the time of death of the decedent). l) Family Home - fair market value but not to exceed P 1,000,000.013) Standard Deduction an amount equivalent to P1,000,000.00 (applicable only for death occurring after the effectivity of RA 8424 which is January 1, 1998.) Amount received by the heirs under Republic Act No. 4917 (applicable only for death occurring after the effectivity of RA 8424 which is January 1, 1998)
Non-Resident Decedent, not a citizen of the Philippines Expenses, losses, indebtedness, taxes Property previously taxed Transfer for public use Share in the conjugal property
INCOME TAX Description Who Are Required to File Income Tax Returns Annual Income Tax for Individuals Earning Purely Compensation Income (Including NonBusiness/Non-Professional Related Income) Annual Income Tax for Self-Employed Individuals, Estates and Trusts (Including Those With Business and Compensation Income) Account Information Form for Self-Employed Individuals, Estates and Trusts (Including Those With Business and Compensation Income) Quarterly Income Tax for Self-Employed Individuals, Estates and Trusts (Including Those With Business and Compensation Income) Annual Income Tax for Corporations and Partnerships Account Information Form for Corporations and Partnerships Quarterly Income Tax for Corporations and Partnerships Improperly Accumulated Earnings Tax for Corporations Annual Income Information for Non Resident Citizens/OCWs and Seamen (For Foreign-Sourced Income) Tax Rates Related Revenue Issuances Codal Reference Frequently Asked Questions
DESCRIPTION Income Tax is a tax on all yearly profits arising from property, profession, trades or offices or as a tax on a person's income, emoluments, profits and the like. top of the page
WHO ARE REQUIRED TO FILE INCOME TAX RETURNS Individuals Resident citizens receiving income from sources within or outside the Philippines - individuals deriving compensation income from 2 or more employers, concurrently or successively at anytime during the taxable year - employees deriving compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return - employees whose monthly gross compensation income does not exceed P5,000 or the statutory minimum wage, whichever is higher, and opted for non-withholding of tax on said income
- individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax - individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing Non-resident citizens receiving income from sources within the Philippines Citizens working abroad receiving income from sources within the Philippines Aliens, whether resident or not, receiving income from sources within the Philippines Corporations no matter how created or organized including general professional partnerships domestic corporations receiving income from sources within and outside the Philippines foreign corporations receiving income from sources within the Philippines Estates and trusts engaged in trade or business
top of the page Annual Income Tax For Individuals Earning Purely Compensation Income (Including NonBusiness/Non-Profession Related Income) Tax Form BIR Form 1700 - Annual Income Tax Return (For Individual Earning Purely Compensation Income Including Non-Business/Non-Profession Related Income) Documentary Requirements 1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316) 2. Waiver of the Husbands right to claim additional exemption, if applicable 3. Duly approved Tax Debit Memo, if applicable 4. Proof of Foreign Tax Credits, if applicable 5. Return previously filed return and proof of payment, if amended return Procedures 1. Fill-up BIR Form 1700 in triplicate copies.
2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1700, together with the required attachments and your payment. In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1700, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. For Refundable Returns and for those returns with second installment: Proceed to the Revenue District Office where you are required to register or to any established Tax Filing Centers established by the BIR and present the duly accomplished BIR Form 1700, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative. Deadline On or before the 15th day of April of each year covering income for the preceding taxable year
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Annual Income Tax For Self-Employed Individuals, Estates and Trusts (Including Those With Business and Compensation Income) Tax Form BIR Form 1701 - Annual Income Tax Return (For Self-Employed Individuals, Estates and Trusts Including Those With Business and Compensation Income) Documentary Requirements 1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316), if applicable 2. Certificate of Income Payments not Subjected to Withholding Tax (BIR Form 2304) if applicable 3. Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable 4. Waiver of the Husbands right to claim additional exemption, if applicable 5. Duly approved Tax Debit Memo, if applicable
6. Proof of Foreign Tax Credits, if applicable 7. Return previously filed return and proof of payment, if amended return 8. Account Information Form (AIF) and the Certificate of the independent CPA or Audited Financial Statements except for taxpayers who opted for the Optional Standard Deduction (The CPA Certificate is required if the gross quarterly sales, earnings, receipts or output exceed P 150,000.00) 9. Proof of prior years excess tax credits, if applicable Procedures 1. Fill-up BIR Form 1701 in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1701, together with the required attachments and your payment. In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1701, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer 3. For Refundable Returns and for those returns with second installment: Proceed to the Revenue District Office where you are required to register or to any established Tax Filing Centers established by the BIR and present the duly accomplished BIR Form 1701, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative. Deadline Final Adjustment Return - On or before the 15th day of April of each year covering income for the preceding year
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Account Information Form For Self-Employed Individuals, Estates and Trusts (Including Those With Business and Compensation Income)
Tax Form BIR Form 1701 AIF - Account Information Form For Self-Employed Individuals, Estates and Trusts (Including those with Business and Compensation Income) NOTE: Pursuant to Revenue Memorandum Circular No. 6 2001, corporations, companies or persons whose gross quarterly sales, earnings, receipts or output exceed P 150,000.00 may not accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA. Documentary Requirements None Procedures 1. Accomplish BIR Form 1701 AIF in triplicate. 2. Attach the same to BIR Form 1701. Deadline Same deadline as BIR Form 1701 - On or before the 15th day of April of each year covering income for the preceding year
top of the page Quarterly Income Tax For Self-Employed Individuals, Estates and Trusts (Including Those With Business and Compensation Income) Tax Form BIR Form 1701Q - Quarterly Income Tax Return (For Self-Employed Individuals, Estates and Trusts) (Including those with Business and Compensation Income) Documentary Requirements 1. Certificate of Income Tax Withheld at Source (BIR Form 2307), if applicable 2. Certificate of Income Payments not Subjected to Withholding Tax (BIR Form 2304) if applicable 3. Duly approved Tax Debit Memo, if applicable
Procedures 1. Fill-up BIR Form 1701Q in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1701 Q, together with the required attachments and your payment. In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1701Q, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. For Refundable Returns and for those returns with second installment: Proceed to the Revenue District Office where you are required to register or to any established Tax Filing Centers established by the BIR and present the duly accomplished BIR Form 1701Q, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative. Deadlines April 15 for the first quarter August 15 for the second quarter November 15 for the third quarter top of the page
Annual Income Tax For Corporations and Partnerships Tax Form BIR Form 1702 - Annual Income Tax Return (For Corporations and Partnerships) Documentary Requirements 1. Certificate of Income Payments not Subjected to Withholding Tax (BIR Form 2304) if applicable 2. Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable
3. Duly approved Tax Debit Memo, if applicable 4. Proof of Foreign Tax Credits, if applicable 5. Return previously filed return and proof of payment, if amended return 6. Account Information Form (AIF) and the Certificate of the independent CPA or Audited Financial Statements except for taxpayers who opted for the Optional Standard Deduction (The CPA Certificate is required if the gross quarterly sales, earnings, receipts or output exceed P150,000.00) 7. Proof of prior years excess tax credits, if applicable Procedures 1. Fill-up BIR Form 1702 in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1702, together with the required attachments and your payment. In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1702 with the required attachments and your payments. Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. For No Payment Returns and Refundable Returns: Proceed to the Revenue District Office where you are required to register or to any established Tax Filing Centers established by BIR and present the duly accomplished BIR Form 1702, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative Deadline Final Adjustment Return - On or before the 15th day of the fourth month following the close of the taxpayers taxable year top of the page
Account Information Form For Corporations and Partnerships
Tax Form BIR Form 1702 AIF - Account Information Form (For Corporations and Partnerships) NOTE: Pursuant to Revenue Memorandum Circular No. 6 2001, corporations, companies or persons whose gross quarterly sales, earnings, receipts or output exceed P 150,000.00 may not accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA. Documentary Requirements None Procedures 1. Accomplish BIR Form 1702 AIF in triplicate. 2. Attach the same to BIR Form 1702. Deadline Same deadline as BIR Form 1702 - On or before the 15th day of the fourth month following the close of the taxpayers taxable year top of the page
Quarterly Income Tax For Corporations and Partnerships Tax Form BIR Form 1702 Q - Quarterly Income Tax Return (For Corporations and Partnerships) Documentary Requirements 1. Certificate of Income Tax Withheld at Source (BIR Form 2307), if applicable 2. Certificate of Income Payments not Subjected to Withholding Tax (BIR Form 2304) if applicable 3. Duly approved Tax Debit Memo, if applicable Procedures
1. Fill-up BIR Form 1702 Q in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1702 Q, together with the required attachments and your payment. In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1702 Q. Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. For Refundable Returns and for those returns with second installment: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1702 Q, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative. Deadline Corporate Quarterly Declaration - On or before the 60th days following the close of each of the quarters of the taxable year
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Improperly Accumulated Earnings Tax For Corporations Tax Form BIR Form 1704 - Improperly Accumulated Earnings Tax Return (For Corporations) Documentary Requirements 1. Photocopy of Annual Income Tax Return (BIR Form 1702) and Audited Financial Statements or Account Information Form of the taxable year covered duly received by the BIR; and 2. Sworn declaration as to dividends declared taken from the covered year earnings and the corresponding tax withheld, if any Procedures 1. Fill-up BIR Form 1704 in triplicate copies.
2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1704, together with the required attachments and your payment. In places where there are no AABs, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1704 Receive your copy of the duly stamped and validated form from the teller of the AABs/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. If there is no payment Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1704, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative Deadline Within fifteen (15) days after the close of the year
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Annual Income Information For Non Resident Citizens/OCWs and Seamen (For ForeignSourced Income) Tax Form BIR Form 1703 - Annual Income Information Return For Non Resident Citizens/OCWs and Seamen (For Foreign-Sourced Income) Note: Now optional based on Revenue Regulations No. 5-2001. TAX RATES For Individuals Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession Over But Not Over Rate P 10,000 5%
P 10,000 30,000 70,000 140,000 250,000 500,000
30,000 70,000 140,000 250,000 500,000
P 500 + 10% of the Excess over P 10,000 P 2,500 + 15% of the Excess over P 30,000 P 8,500 + 20% of the Excess over P 70,000 P 22,500 + 25% of the Excess over P 140,000 P 50,000 + 30% of the Excess over P 250,000 P125,000 + 34% of the Excess over P500,000 In 1998.
Note: Effective January 1, 1999, the maximum rate shall be thirty-three percent (33%) and thirty-two percent (32%) on January 1, 2000. Note: When the tax due exceeds P 2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to be paid at the time the return is filed and the second installment on or before July 15 of the same year at the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered. Tax Rate 1. Domestic Corporations: a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings 2. Proprietary Educational Institution 3. Non-stock, Nonprofit Hospitals 4. GOCC, Agencies & Instrumentalities 32% 2% Taxable income from all sources Gross Income Taxable Base
10%
Improperly Accumulated Taxable Income
10%
Taxable income from all sources
10%
a. In General b. Minimum Corporate Income Tax * c. Improperly Accumulated Earnings 5. National Govt & LGUs a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings 6. Taxable Partnerships a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings 7. Exempt Corporation a. On Exempt Activities b. On Taxable Activities 8. General Professional Partnerships
32% 2%
Taxable income from all sources Gross Income
10%
32% 2%
Taxable income from all sources Gross Income
10%
Improperly Accumulated
32%
2%
Gross Income
10%
0%
32%
0%
9. Corporation covered by Special Laws a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings
Rate specified under the respective special laws 32% Taxable income from all sources
2%
Gross Income
10%
*Beginning on the 4th year immediately following the year in which such corporation commenced its business operations, when the minimum corporate income tax is greater than the tax computed using the normal income tax. 11. International Carriers 12. Regional Operating Headquarters 13. Offshore Banking Units (OBUs) 2.5% Gross Philippine Billings
10%
Taxable Income Gross Taxable Income On Foreign Currency Transaction On Taxable Income other than Foreign Currency Transaction Gross Taxable Income On Foreign Currency Transaction On Taxable Income other than Foreign Currency Transaction
10%
32% 14. Foreign Currency Deposit Units (FCDU)
10%
32 %
A) For Citizens and Resident Aliens (including OFWs) In General Over But Not Over
P 10,000
5%
P 10,000
30,000
P 500 + 10% of the Excess over P 10,000
30,000
70,000
P 2,500 + 15% of the Excess over P 30,000
70,000
140,000
P 8,500 + 20% of the Excess over P 70,000 P 22,500 + 25% of the Excess over P 140,000 P 50,000 + 30% of the Excess over P 250,000 P125,000 + 34%* of the Excess over P 500,000 In 1998.
140,000
250,000
250,000
500,000
500,000
Note: Effective January 1, 1999, the maximum rate shall be thirty-three percent (33%) and thirty-two percent (32%) on January 1, 2000. Passive Income 1) Interest on any peso bank deposit 2) Royalties (except on books as well as literary & musical composition-10%) 3) Prizes (except prizes amounting to P 10,000 or less 5 %) 4) Winnings (except from PCSO and lotto) 5) Interest Income on Foreign Currency Deposit 6) Interest from long-term deposit Holding Period - Four (4) years to less than five (5) years - Three (3) years to less than four (4) years - Less than three (3) years 7) Cash and/or Property Dividends Beginning January 1, 1998 Beginning January 1, 1999 Beginning January 1, 2000 & thereafter 8) On capital gains presumed to have been realized from sale, exchange or other disposition of real property (capital asset) 9) On capital gains for shares of stock not traded in the stock exchange - Not over P 100,000 - Any amount in excess of P 100,000 5% 10% 20% 20% 20% 20% 7.5%
5% 12% 20% 6% 8% 10% 6%
B) For Non-Resident Aliens Engaged in Trade or Business 1) On Certain Passive Income 20% - Cash and/or Property Dividends - Share in the distributable net income of a partnership - Interest on any bank deposits - Royalties(except on books as well as literary works and musical composition) - Prizes (except prizes amounting to P 10,000 or less) - Winnings 2) Interest Income from long time deposits Holding Period - Four (4) years to less than five (5) years 5% - Three (3) years to less than four (4) years 12% - Less than three (3) years 20% 3) On capital gains presumed to have been realized from the sale, exchange or other disposition of real property 6%
4) On capital gains for shares of stock not traded in the Stock Exchange - Not over P 100,000 5% - Any amount in excess of P 100,000 10% C) For Non-Resident Aliens Not Engaged in Trade or Business 1) On the gross amount of income derived from all sources 25% within the Philippines 2) On capital gains presumed to have been realized from the exchange or other disposition of real property located in the 6% Phils. D) Aliens Employed by Regional Headquarters (RHQ), Regional Operating (ROH), Offshore Banking Units (OBU), 15% Petroleum Service Contractors and Subcontractors E) General Professional Partnerships 0% F) Domestic Corporations 1) a. In General 32% b. Minimum Corporate Income Tax 2% c. Improperly Accumulated Earnings 10% 2) Proprietary Educational Institution 3) Non-stock, Non-profit Hospitals 4) GOCC, Agencies & Instrumentalities a. In General b. Minimum Corporate Income Tax 10% 10%
32% 2%
c. Improperly Accumulated Earnings 5) National Govt & LGUs a. In General b. Minimum Corporate Income Tax c. Improperly Accumulated Earnings 6) Taxable Partnerships a. In General b. Minimum Corporate Income Tax c. Improperly Accumulated Earnings 7) Exempt Corporation a. On Exempt Activities b. On Taxable Activities
10%
32% 2% 10%
32% 2% 10%
0% 32% Rate specified under the respective special laws
8) Corporation covered by Special Laws
G) Resident Foreign Corporation 1) a. In General b. Minimum Corporate Income Tax c. Improperly Accumulated Earnings 2) International Carriers 3) Regional Operating Headquarters
32% 2% 10% 25% 10% Rate specified under the respective special laws 10% 10%
4) Corporation Covered by Special Laws
5) Offshore Banking Units (OBUs) 6) Foreign Currency Deposit Units (FCDU)
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RELATED REVENUE ISSUANCES RR No. 4-95, RR No. 4-96, RR No. 5-97, RR No. 1-98
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CODAL REFERENCE Sections 23-59, 67-73 and 74-77 of the National Internal Revenue Code top of the page
FREQUENTLY ASKED QUESTIONS 1) What is income? Income means all wealth, which flows into the taxpayer other than as a mere return of capital. 2) What is Taxable Income? Taxable income means the pertinent items of gross income specified in the Tax Code less the deductions and/or personal and additional exemptions, if any, authorized for such types of income, by the Tax Code or other special laws. 3) What is Gross Income? Gross income means all income derived from whatever source. 4) What comprises gross income? Gross income includes, but is not limited to the following: Compensation for services, in whatever form paid, including but not limited to fees, salaries, wages, commissions and similar item Gross income derived from the conduct of trade or business or the exercise of profession Gains derived from dealings in property Interest
Rents Royalties Dividends Annuities Prizes and winnings Pensions Partner's distributive share from the net income of the general professional partnerships 5) What are some of the exclusions from gross income? Life insurance Amount received by insured as return of premium Gifts, bequests and devises Compensation for injuries or sickness Income exempt under treaty Retirement benefits, pensions, gratuities, etc. Miscellaneous items - income derived by foreign government - income derived by the government or its political subdivision - prizes and awards in sport competition - prizes and awards which met the conditions set in the Tax Code - 13th month pay and other benefits - GSIS, SSS, Medicare and other contributions - gain from the sale of bonds, debentures or other certificate of indebtedness - gain from redemption of shares in mutual fund
6) What are the allowable deductions from gross income? Except for taxpayers earning compensation income arising from personal services rendered under an employer-employee relationships where the only deduction up to a maximum limit of P 2,400 per year per family is the premium payment on health and/or hospitalization insurance, a taxpayer may opt to avail any of the following allowable deductions from gross income: Optional Standard Deduction - an amount not exceeding 10% of the gross income; or Itemized Deductions which include the following: - Expenses - Interest - Taxes - Losses - Bad Debts - Depreciation - Depletion of Oil and Gas Wells and Mines - Charitable Contributions and Other Contributions - Research and Development - Pension Trusts In addition, individuals who are either earning compensation income, engaged in business or deriving income from the practice of profession are entitled to personal and additional exemptions as follows: Personal Exemptions: For single individual or married individual judicially decreed as legally separated with no qualified dependents...P 20,000.00 For head of family.....P 25,000.00 For each married individual *... .P 32,000.00 Note: In case of married individuals where only one of the spouses is deriving gross income, only such spouse will be allowed to claim the personal exemption.
Additional Exemptions For each qualified dependent, an P 8,000 additional exemption can be claimed but only up to 4 qualified dependents The additional exemption can be claimed by the following: - The husband who is deemed the head of the family unless he explicitly waives his right in favor of his wife - The spouse who has custody of the child or children in case of legally separated spouses. Provided, that the total amount of additional exemptions that may be claimed by both shall not exceed the maximum additional exemptions allowed by the Tax Code. - The individuals considered as Head of the Family supporting a qualified dependent The maximum amount of P 2,400 premium payments on health and/or hospitalization insurance can be claimed if: Family gross income yearly should not be more than P 250,000 For married individuals, the spouse claiming the additional exemptions for the qualified dependents shall be entitled to this deduction 7) Who are required to file the Income Tax returns? Individuals resident citizens receiving income from sources within or outside the Philippines - individuals deriving compensation income from 2 or more employers, concurrently or successively at anytime during the taxable year - employees deriving compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return - employees whose monthly gross compensation income does not exceed P5,000 or the statutory minimum wage, whichever is higher, and opted for non-withholding of tax on said income - individuals deriving pother non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax - individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing
non-resident citizens receiving income from sources within the Philippines citizens working abroad receiving income from sources within the Philippines aliens, whether resident or not, receiving income from sources within the Philippines Corporations no matter how created or organized including general professional partnerships domestic corporations receiving income from sources within and outside the Philippines foreign corporations receiving income from sources within the Philippines Estates and trusts engaged in trade or business 8) Who are not required to file Income Tax returns? An individual whose gross income does not exceed his total personal and additional exemptions An individual whose compensation income derived from one employer does not exceed P 60,000 and the income tax on which has been correctly withheld An individual whose income has been subjected to final withholding tax (alien employee as well as Filipino employee occupying the same position as that of the alien employee of regional headquarters and regional operating headquarters of multinational companies, petroleum service contractors and sub-contractors and offshore-banking units, non-resident aliens not engaged in trade or business) Those who are qualified under substituted filing. However, substituted filing applies only if all of the following requirements are present - the employee received purely compensation income (regardless of amount) during the taxable year - the employee received the income from only one employer in the Philippines during the taxable year - the amount of tax due from the employee at the end of the year equals the amount of tax withheld by the employer - the employees spouse also complies with all 3 conditions stated above - the employer files the annual information return (BIR Form No. 1604-CF) - the employer issues BIR Form No. 2316 (Oct 2002 ENCS version ) to each employee. 9) Who are exempt from Income Tax?
Non-resident citizen who is: a) A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein b) A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis c) A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year d) A citizen who has been previously considered as a non-resident citizen and who arrives in the Philippines at any time during the year to reside permanently in the Philippines will likewise be treated as a non-resident citizen during the taxable year in which he arrives in the Philippines, with respect to his income derived from sources abroad until the date of his arrival in the Philippines. Overseas Contract Worker, including overseas seaman An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines; Provided, that a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade will be treated as an overseas contract worker. NOTE: A Filipino employed as Philippine Embassy/Consulate service personnel of the Philippine Embassy/consulate is not treated as a non-resident citizen, hence his income is taxable. 10) What are the procedures in filing Income Tax returns (ITRs)? For with payment ITRs (BIR Form Nos. 1700 / 1701 / 1701Q / 1702 / 1702Q / 1704) File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) of the place where taxpayer is registered or required to be registered. In places where there are no AABs, the return will be filed directly with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality in which such person has his legal residence or principal place of business in the Philippines, or if there is none, filing of the return will be at the Office of the Commissioner. For no payment ITRs -- refundable, breakeven, exempt and no operation/transaction, including returns to be paid on 2nd installment, withholding tax returns (WTRs) covered by Tax Remittance Advice (TRA) and returns paid through a Tax Debit Memo(TDM)/Credit Memo (CM)
File the return with the concerned Revenue District Office (RDO) where the taxpayer is registered. However, no payment returns filed late shall not be accepted by the RDO but instead shall be filed with an Authorized Agent Bank (AAB) or Collection Officer/Deputized Municipal Treasurer (in places where there are no AABs), for payment of necessary penalties. 11) How is Income Tax computed? Gross Income P ___________ Less: Allowable Deductions ___________ Net Income P ___________ Less: Personal & Additional Exemptions ___________ Taxable Income P ___________ Multiply by Tax Rate (5 to 32%)
Income Tax Due P ___________ 12) How is Income Tax paid? Through withholding Generally 10% 20% - Fees paid to directors who are not employees Pay the balance as you file the tax return, computed as follows: Income Tax Due P ___________ Less: 20% or 10% Withholding Tax ___________ Net Income Tax Due P ___________
13) Is the Minimum Corporate Income Tax (MCIT) an addition to the regular or normal income tax? No, the MCIT is not an additional tax. An MCIT of 2% of the gross income at the end of taxable year (whether calendar or fiscal year, depending on the accounting period employed) is hereby imposed upon any domestic corporation beginning the 4th taxable year immediately following the taxable year in which such corporation commenced its business operations. The MCIT is compared with the regular income tax, which is due from a corporation. If the regular income is higher than the MCIT, then the corporation does not pay the MCIT. 14) Who are covered by MCIT? The MCIT covers domestic and resident foreign corporations which are subject to the regular income tax. The term regular income tax refers to the regular income tax rates under the Tax Code. Thus, corporations which are subject to a special corporate tax system do not fall within the coverage of the MCIT. Schools, hospitals and income of Offshore Banking Units (OBUs), and Foreign Currency Deposit Unit (FCDU) from foreign currency transactions Regional Operating Headquarters The incomes of these corporations are subject to ten percent (10%) preferential tax rate. Firms under special income tax regime such as those under the PEZA law and the Bases Conversion Development Act International carriers subject to tax at 2 % of their gross Philippine billings For corporations whose operations or activities are partly covered by the regular income tax and partly covered under special income tax system, the MCIT shall apply on operations by the regular income tax system. Newly established corporations or firms which are on their first 3 years of operations are not covered by the MCIT. 15) When does a corporation start to be covered by the MCIT? A corporation starts to be covered by the MCIT on the 4th year of its business operations. The period of reckoning which is the start of its business operations is the year when the corporation was registered with the BIR. This rule will apply regardless of whether the corporation is using the calendar year or fiscal year as its taxable year.
Firms that were registered in 1994 and earlier years are covered by the MCIT beginning January 1, 1998 Firms which were registered with the BIR in any month in 1998 will be covered by the MCIT after the lapse of 3 calendar years, i.e. 2002 16) When is the MCIT reported and paid? Is it quarterly? The MCIT is paid on an annual basis. It is not computed nor paid on a quarterly basis. It is reported under BIR Form No. 1702 17) How is MCIT computed? The MCIT is 2% of the gross income of the corporation at the end of the year. Gross income means gross sales less sales returns, discounts and cost of goods sold. Passive income, which have been subject to a final tax at source do not form part of gross income for purposes of the MCIT. Cost of goods sold includes all business expenses directly incurred to produce the merchandise to bring them to their present location and use. For trading or merchandising concern, cost of goods sold means the invoice cost of goods sold, plus import duties, freight in transporting the goods to the place where the goods are actually sold, including insurance while the goods are in transit. For a manufacturing concern, cost of goods manufactured and sold means all costs of production of finished goods such as raw materials used, direct labor and manufacturing overhead, freight cost, insurance premiums and other costs incurred to bring the raw materials to the factory or warehouse. For sale of services, gross income means gross receipts less sales returns, allowances, discounts and cost of services which cover all direct costs and expenses necessarily incurred to provide the services required by the customers and clients including: Salaries and employees benefits of personnel, consultants and specialists directly rendering the service; Cost of facilities directly utilized in providing the service such as depreciation or rental of equipment used; Cost of supplies Interest Expense is not included as part of cost of service, except in the case of banks and other financial institutions.
Gross Receipts means amounts actually or constructively received during the taxable year. However, for taxpayers employing the accrual basis of accounting, it means amounts earned as gross income. 18) What is the carry forward provision under the MCIT? Any excess of the MCIT over the normal income tax may be carried forward on an annual basis and be credited against the normal income tax for 3 immediately succeeding taxable years. 19) How would the MCIT be recorded for accounting purposes? Any amount paid as excess minimum corporate income tax should be recorded in the corporations books as an asset under account title Deferred charges-MCIT 20) How long can we amend our income tax return? There is no prescription period for amending the return. Only when the taxpayer is being audited that he can no longer amend the return. 21) Can a benefactor of a senior citizen claim him/her as additional dependent in addition to his/her 3 qualified dependent children at P 8,000 each? No. According to Revenue Regulations 2-94, the benefactor of a senior citizen cannot claim the P 8,000 additional exemption. The P 8,000 additional exemption is for only the dependent child.
22) What are tax treaties? Tax treaties are defined primarily by their purpose. They are entered into by the Philippines with other foreign governments in order to spur national stability and development mainly by encouraging investors to invest in the Philippines and for the purpose of increasing flow of trade and investment between the Philippines and other countries. In this regard, among the objectives of tax treaties are the following: 1) to eliminate double taxation caused by multiple jurisdiction asserting tax authority over the same income; 2) to assist tax administrators in the fight against tax evasion and avoidance through Exchange of Information and Mutual Agreement Procedure; and 3) the reciprocal reduction of tax impediments to cross-border investment and trade to promote international trade and investment. 23) What are the effective Philippine tax treaties? The Philippines has thirty-one (31) effective tax treaties. The following tax treaties are in effect as of January 01, 2002: EFFECTIVITY
1. Australia 1 January 1980 2. Austria 1 January 1983 3. Belgium 1 January 1981 4. Brazil 1 January 1992 5. Canada 1 January 1977 6. China 1 January 2002 7. Denmark (Re-negotiated) 1 January 1998 8. Finland 1 January 1982 9. France 1 January 1978 10. Germany 1 January 1985 11. Hungary 8 April 1998 (for taxes withheld at source) 1 January 1998 (for other taxes) 12. India 1 January 1995 13. Indonesia 1 January 1983 14. Israel 1 January 1997 (for taxes withheld at source) 25 July 1990 (for other taxes) 15. Italy 1 January 1990 16. Japan 1 January 1981 17. Korea 1 January 1987 18. Malaysia 1 January 1985 19. Netherlands 1 January 1992 20. New Zealand 1 January 1981 21. Norway 1 January 1997
22. Pakistan 1 January 1979 23. Romania 1 January 1998 24. Russia 1 January 1998 25. Singapore 1 January 1977 26. Spain 1 January 1994 27. Sweden 1 January 1990 28. Switzerland 1 January 2002 29. Thailand 1 January 1990 30. United Kingdom of Great 1 January 1978 Britain and Northern Ireland 31.United States of America 1 January 1983 24) What office can we inquire about the said tax treaties? The International Tax Affairs Division (ITAD). 25) What taxes are covered by the Philippine tax treaties? Income taxes imposed by the domestic laws of the Contracting States, including substantially similar taxes that may be imposed later, in addition to, or in its place, are covered by the tax treaties. In the Philippines, this is limited to Title II (Tax on Income) and the stock transaction tax of the Tax Code of 1997. 26) How is business income treated under our tax treaties? The business profits of a resident of a Contracting State shall not be taxable in the Philippines unless that enterprise of a resident of a Contracting State carries on business in the Philippines through a permanent establishment. 27) What is the concept of permanent establishment (PE) as used in tax treaties? PE is defined as a fixed place of business through which the business of the enterprise is wholly or partly carried on. The concept of permanent establishment is used to determine the rights of a Contracting State to tax the business profits of enterprises of the other Contracting State. Under this concept, profits of an enterprise of a Contracting State are not taxable by the other
Contracting State, unless the enterprise carries on business through a permanent establishment situated in the other Contracting State. A list of places, circumstances, and activities which constitute a permanent establishment is provided under the different tax treaties which the Philippines has with other countries. 28) What is the Most-Favored-Nation clause (MFN)? The appearance of the MFN clause in the tax treaty means that a Contracting State will grant to a resident of the other Contracting State the same lower rate of tax or exemption the former has granted to a resident of a third State. 29) What is the tax treatment on immovable property? Income from an immovable property is taxable in the Contracting State where the property is situated. This term is generally defined under the domestic laws of the Contracting States. However, this is further defined in the tax treaties.
30) How are capital gains taxed under our tax treaties? Gains from the alienation of immovable property or movable property forming part of the business property of a permanent establishment or pertaining to a fixed base are taxed in the Philippines if the immovable property or permanent establishment or fixed base is located here. 31) How are shares of stock taxed under the tax treaties? Gains from the alienation of shares of stock in a Philippine corporation are generally exempt from tax in the Philippines. These shall be taxed in the Contracting State where the alienator is a resident. However, in most treaties, if the assets of the Philippine corporation where the shares of stock are being sold consist principally of real property/real property interest, the Philippines shall have the right to tax such income. The rate of tax shall be the rates provided in the Tax Code of 1997. 32) How is income from independent / dependent personal services taxed in our tax treaties? Income from employment derived by a resident of the other Contracting State is not subject to tax in the Philippines, except: 1) when the recipient is present here for more that the period agreed upon in the treaties, or 2) when the remuneration is paid by or on behalf of an employer who is a resident of the Philippines, or 3) when the employer abroad has a permanent establishment or fixed base here and remuneration is borne by such PE or fixed base. 33) What are the methods of relief from double taxation? Exemption - where a Contracting State exempts income derived therein by a resident of the other Contracting State and/or exempts income of its residents from foreign sources.
This is the relief generally employed by source countries where the tax laws are difficult to implement and/or unproductive of revenue. To illustrate, under the Philippine laws, income earned in the Philippines by any person for services rendered here are subjected to tax. Thus, the salary of an employee of a corporation is legally taxable here. The income earner is in the Philippines performing services here and getting paid for it. However, this type of income and other similar types of income are exempted in the treaties under certain conditions. Some income items, such as inter-corporate dividends, arising from and taxed in the Philippines, are exempted in the other Contracting State. Deduction - where taxes paid in one Contracting State are deducted from the taxable income of the taxpayer in the other Contracting State. The most common form calls for the residence Contracting State to allow a deduction from income for taxes paid to the source country on income derived therein. This method is available to Filipino citizens residing abroad and paying taxes thereon. Taxes paid by non-resident Filipino citizens to the foreign government are deducted from the gross income. Credit Ordinary credit - where foreign taxes paid in a Contracting State are credited against domestic taxes. Matching credit - where the amount of credit includes not only the taxes actually paid, but also a portion of the amount reduced or exempted by the source country. Tax Sparing - where the full amount of the taxes reduced or exempted by the source country is credited. Deemed Paid Credit - (or indirect tax credit) - where corporate taxes paid on the income distributed as dividends are allowed as credits in addition to the withholding tax on the said dividends. The credit system is principally used when a Contracting State allows as a credit against the tax the appropriate amount of taxes paid or accrued to the other Contracting State. For passive income, like dividends, interest and royalties, the modified version of the credit system, is applied to ensure that the benefit from the Philippines reduction of its tax will be fully enjoyed by the investor. 34) How are tax treaty reliefs obtained? Application for tax treaty relief from double taxation are filed with the International Tax Affairs Division (ITAD). Specific guidelines are provided under RMO No. 10-92 as amended by RMO
1-2000. Applicants should accomplish BIR Form No. 0901 (in duplicate) and the documentary requirements specified in the form. 35) What is a Certificate of Residency? A Certificate of Residency is a written proof that an individual or a corporation is a resident of the Philippines or of the other Contracting State, as the case may be, within the meaning of tax treaties. Generally, the basis in determining residence is where an individual or a corporation is primarily liable to taxes. Requests for Certificate of Residency are filed with the ITAD, together with the following documentary requirements: As for individuals - Tax Identification Number (TIN) and/or latest tax/information return or passport or Embassys Certification as to residency; For corporations -Securities and Exchange Commission (SEC) Registration and BIR Registration
36) Are non-resident citizens, overseas contract workers (OCWs) and seamen required to file information returns on income derived from sources outside the Philippines? Under Revenue Regulations 5-2001, non-resident citizens including OCWs and seamen who are exempt from tax with respect to income derived from sources outside the Philippines, but who are nevertheless mandated to file information returns, are no longer required to file the same on their income derived from sources outside the Philippines beginning taxable year 2001. 37) Does the BIR process applications for travel tax exemption? The BIR does not have the jurisdiction to process applications for travel tax exemption. Any application or inquiry on the matter should be forwarded to the Department of Tourism being the proper Office having jurisdiction on the same.
PERCENTAGE TAX Description Who are Required to File Percentage Tax Returns Monthly Percentage Tax Quarterly Percentage Tax Percentage Tax for Transactions Involving Shares of Stocks Listed and Traded Through The Local Stock Exchange Or Through Initial and/or Secondary Offering Tax Rates Related Revenue Issuances Codal Reference Frequently Asked Questions
DESCRIPTION Percentage tax is a business tax imposed on persons or entities who sell or lease goods, properties or services in the course of trade or business whose gross annual sales or receipts do not exceed P 550,000 and are not VAT-registered. top of the page
WHO ARE REQUIRED TO FILE PERCENTAGE TAX RETURNS Any person who is not a VAT-registered person (persons exempt from VAT under Sec. 109z of the Tax Code) -Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn two- wheeled vehicle -Operators of international carriers doing business in the Philippines -Franchise grantees of electric, gas or water utilities -Franchise grantees of radio and/or television broadcasting companies whose gross annual receipts for the preceding year do not exceed Ten Million Pesos (P 10,000,000.00) and did not opt to register as VAT taxpayers -Operators of communication equipment sending overseas dispatch, messages, or conversations from the Philippines, except on services involving the following: Government of the Philippines - for messages transmitted by the Government of the Republic of the Philippines or any of its political subdivisions and instrumentalities Diplomatic services - for messages transmitted by any embassy and consular offices of a foreign government
International organizations - for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges and immunities pursuant to an international agreement News Services - for messages from any newspaper, press association, radio or television newspaper broadcasting agency, or newsticker services to any other newspaper, press association, radio or television newspaper broadcasting agency or newsticker services or to bonafide correspondents, which messages deal exclusively with the collection of news items for, or the dissemination of news items through public press, radio or television broadcasting or a newsticker service furnishing a general news service similar to that of the public press -Banks and non-bank financial intermediaries and finance companies -Life insurance companies -Agents of foreign insurance companies -Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai and race tracks -Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities -A corporate issuer / stock broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO) seller in secondary public offering of shares of stock in closely held corporations
top of the page Monthly Percentage Tax Tax Form BIR Form 2551 M - Monthly Percentage Tax Return
Documentary Requirements 1. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable 2. Duly approved Tax Debit Memo, if applicable 3. Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives and from the National Electrification Administration for electric cooperatives
4. Previously filed return and proof of payment, for amended return Procedures 1. Fill-up BIR Form 2551 M in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551 M, together with the required attachments and payment. (The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer.) In places where there are no AABs, the accomplished BIR Form 2551 M, together with the required attachments and payment, shall be filed/paid with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located. Receive taxpayer's copy of the duly stamped and validated form from the teller of the AAB/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. If there is no payment: Proceed to the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551M, together with the required attachments. Receive taxpayer's copy of the duly stamped and validated form from the RDO representative. Note: "No payment" returns filed late shall be imposed the necessary penalties by the RDO, which shall be paid at the concerned AAB. Deadline Manual Filing Not later than 20th day following the end of each month Filing Through eFPS Group A - Twenty-Five (25) days following the end of the month Group B - Twenty-Four (24) days following the end of the month Group C - Twenty-Three (23) days following the end of the month Group D - Twenty-Two (22) days following the end of the month Group D - Twenty-One (21) days following the end of the month
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Quarterly Percentage Tax
Tax Form BIR Form 2551 Q - Quarterly Percentage Tax Return Documentary Requirements 1. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable 2. Duly approved Tax Debit Memo, if applicable 3. Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives and from the National Electrification Administration for electric cooperatives 4. Previously filed return and proof of payment, for amended return Procedures 1. Fill-up BIR Form 2551 Q in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551Q, together with the required attachments and payment. (The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer.) In places where there are no AABs, the accomplished BIR Form 2551 Q, together with the required attachments and payment, shall be filed/paid with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located. Receive taxpayer's copy of the duly stamped and validated form from the teller of the AAB/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. If there is no payment: Proceed to the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551Q, together with the required attachments. Receive taxpayer's copy of the duly stamped and validated form from the RDO representative. Note: "No payment" returns filed late shall be imposed the necessary penalties by the RDO, which shall be paid at the concerned AAB. Deadline Not later than 20th day following the end of each quarter top of the page
Percentage Tax For Transactions Involving Shares of Stocks Listed and Traded Through the Local Stock Exchange or Through Initial and/or Secondary Offering Tax Form
BIR Form 2552 - Percentage Tax Return (For Transactions Involving Shares of Stocks Listed and Traded Through the Local Stock Exchange or Through Initial and/or Secondary Offering) Documentary Requirements 1. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable 2. Proof of Exemption for transactions not subject to tax, if applicable 3. Duly approved Tax Debit Memo, if applicable 4. Previously filed return and proof of payment, for amended return Procedures 1. Fill-up BIR Form 2552 in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where the local stock exchange is located and present the duly accomplished BIR Form 2552, together with the required attachments and payment. (The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer.) Receive taxpayer's copy of the duly stamped and validated form from the teller of the AAB 3. If there is no payment: Proceed to the Revenue District Office where the local stock exchange is located and present the duly accomplished BIR Form 2552, together with the required attachments. Receive taxpayer's copy of the duly stamped and validated form from the RDO representative. Note: "No payment" returns filed late shall be imposed the necessary penalties by the RDO, which shall be paid at the concerned AAB. Deadline - For tax on Sale of Shares of Stocks Listed and Traded Through the Local Stock Exchange (LSE) - within 5 banking days from the date of collection -For tax on Shares of Stocks Sold or Exchanged Through Primary Offering - within 30 days from the date of listing in the LSE -For tax on Shares of Stocks Sold or Exchanged Through Secondary Public Offering - within 5 banking days from the date of collection
Tax Rates
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RELATED REVENUE ISSUANCES RR No. 4-95, RR No. 5-97, RR No. 2-98, RR No. 7-95, RR No. 6-2001, RR No. 12-2001, RR No. 4-2002, RR No. 26-2002
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CODAL REFERENCE Sections 116 to 128 of the National Internal Revenue Code top of the page
FREQUENTLY ASKED QUESTIONS 1) Who are required to file Percentage Tax returns? Any person who is not a VAT-registered person (persons exempt from VAT under Sec. 109z of the Tax Code) Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn two- wheeled vehicle Operators of international carriers doing business in the Philippines Franchise grantees of electric, gas or water utilities Franchise grantees of radio and/or television broadcasting companies whose gross annual receipts for the preceding year do not exceed Ten Million Pesos (P 10,000,000.00) and did not opt to register as VAT taxpayers Operators of communication equipment sending overseas dispatch, messages, or conversations from the Philippines, except on services involving the following: Government of the Philippines - for messages transmitted by the Government of the Republic of the Philippines or any of its political subdivisions and instrumentalities Diplomatic services - for messages transmitted by any embassy and consular offices of a foreign government International organizations - for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges and immunities pursuant to an international agreement News Services - for messages from any newspaper, press association, radio or television newspaper broadcasting agency, or newsticker services to any other newspaper, press association, radio or television newspaper broadcasting agency or newsticker services or to bonafide correspondents, which messages deal exclusively with the collection of news items for, or the dissemination of news items through public press, radio or television broadcasting or a newsticker service furnishing a general news service similar to that of the public press Banks and non-bank financial intermediaries and finance companies
Life insurance companies Agents of foreign insurance companies Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai and race tracks Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities A corporate issuer / stock broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO) seller in secondary public offering of shares of stock in closely held corporations 2) What are the procedures in the filing of the Percentage Tax returns and payment of the corresponding taxes? BIR Form 2551M -The return shall be filed with any Authorized Agent Bank (AAB) located within the Revenue District Office (RDO) where the taxpayer is registered. In places where there are no AABs, the return shall be filed with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located. The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer. BIR Form 2551Q -The return shall be filed with any Authorized Agent Bank (AAB) located within the Revenue District Office (RDO) where the taxpayer is registered. In places where there are no AABs, the return shall be filed with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located. The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer. BIR Form 2552 - The return shall be filed with any AAB of the RDO where the local stock exchange is located. The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer. All "no payment" returns shall be filed with the Revenue District Office (RDO) where the taxpayer is registered/local stock exchange is located (For BIR Form 2552). "No payment" returns filed late shall be imposed the necessary penalties by the RDO, which shall be paid at the concerned AAB/Revenue Collection Officer or duly Authorized City or Municipal Treasurer (in places where there are no AABs).
DESCRIPTION Value-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale of goods and services and on the imports of goods into the Philippines. It is an indirect tax, which can be passed on to the buyer.
WHO ARE REQUIRED TO FILE VAT RETURNS Every person or entity who in the course of his trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Five Hundred Fifty Thousand Pesos (P 550,000.00) for any twelve month period
A person required to register as VAT taxpayer but failed to register
A person who imports goods
Professional practitioners Professional Practitioners (PPs) are formerly classified as non-VAT taxpayers and were exempt from the Value-Added Tax and Percentage taxes under Section 109 of the National Internal Revenue Code (hereinafter referred to as the Code), until December 31, 2002. Prior to this date, they were subject only to Income Tax under Section 24 of the Code. Effective January 1, 2003, however, by virtue of Republic Act Nos. 7716 and 9010, which were implemented by Revenue Regulation Nos. 1-2003 and 3-2003, services of PPs are also subject to either VAT (if gross professional fees exceed P 550,000.00 for a 12-month period) or 3% Percentage Tax (if gross professional fees totals P 550,000 and below for a 12-month period), depending on their gross professional fee for a twelve (12) - month period. "Professional Practitioners" include the following: Certified Public Accountants Lawyers Doctors Insurance Agents (Life & Non-life) Other Professional Practitioners required to pass the government examination
Others
Monthly VAT Declarations
Tax Form BIR Form 2550 M - Monthly VAT Declarations
Documentary Requirements 1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable
2. Duly approved Tax Debit Memo, if applicable
3. Duly approved Tax Compliance Certificate, if applicable
4. Previously filed return and proof of payment, for amended return
Procedures 1. Fill-up BIR Form 2550 M in triplicate copies.
2. If there is payment: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register
and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no payment: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative
Deadline
Manual Filing
Not later than the 20th day following the end of each month
Filing Through eFPS
Group A - within twenty five (25) days following the end of the month Group B - within twenty four (24) days following the end of the month Group C - within twenty three (23) days following the end of the month Group D - within twenty two (22) days following the end of the month Group D - within twenty one (21) days following the end of the month
Quarterly VAT Returns
Tax Form BIR Form 2550 Q - Quarterly VAT Returns
Documentary Requirements 1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable
2. Duly approved Tax Debit Memo, if applicable
3. Duly approved Tax Compliance Certificate, if applicable
5. Summary List of Sales (if quarterly total Sales/Receipts (net of VAT) exceeds P 2,500,000) with the following information: a) BIR-registered name of the buyer who is engaged in business/exercise of profession; b) Taxpayer Identification Number (TIN) of the buyer (Only for sales that are subject to VAT); c) Exempt Sales; d) Zero-rates Sales; e) Sales subject to VAT (exclusive of VAT); and f) Output Tax (VAT on Sales)
6. Summary List of Purchases (if quarterly total purchases (net of VAT) exceeds P 1,000,000) with the following information: a) BIR-registered name of the seller/supplier/service-provider; b) Address of seller/supplier/service-provider; c) Taxpayer Identification Number (TIN) of seller/supplier/service-provider
d) Exempt purchases; e) Zero-rated purchases; f) Purchases subject to VAT (exclusive of VAT) - on services; g) Purchases subject to VAT (exclusive of VAT) - on capital goods; h) Purchases subject to VAT (exclusive of VAT) - on goods other than capital goods i) Creditable Input Tax j) Non-creditable Input Tax NOTE: Creditable input taxes and non-creditable input taxes are to be computed not on a per supplier basis but on a per month basis.
7. The Quarterly Summary List of Importation with the following information: a) Import Entry Declaration; b) Assessment/Release Date; c) Date of Importation; d) Name of the Seller; e) Country of Origin; f) Dutiable Value; g) All Charges Before Release from Customs Custody; h) Landed Cost: i) Exempt j) Taxable (Subject to VAT) k) VAT paid; l) Official Receipt (OR) Number of the Official Receipt evidencing payment of tax; and m) Date of VAT payment
Procedures
1. Fill-up BIR Form 2550 Q in triplicate copies.
2. If there is payment: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 Q with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no payment: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 Q, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.
NOTE: 1. For taxpayers with branches, only one consolidated return shall be filed for the principal place of business or head office and all the branches.
2. The Quarterly List of Sales and Purchases shall be submitted in magnetic form using 3.5-inch floppy diskette following the format provided under Section 4.110-4 (Subsection G) of RR 8-2002.
Deadline Within twenty five (25) days following the close of taxable quarter of the taxpayer (both for manual filing and filing through eFPS)
Tax Rates For output tax (0% or 10%) For input tax 1. 0% or 10%
2. Transitional input tax rates (8% or 10%)
3. Presumptive input tax rate (1-1/2%) and
4. Creditable VAT withheld by the Government and the licensee or lessee (3%, 6%, 8.5% and 10%)
RELATED REVENUE ISSUANCES RR No. 5-87-Regulations implementing the provisions of Title IV of the Tax Code imposing VAT on importation of goods and sales and services
RR No. 3-89 - Regulations governing the imposition of 10% VAT on deposits for returnable containers
RR No. 5-93 - Implementing guidelines requiring the monthly payment of VAT and amending thereby Section 110 of the Tax Code
RR No. 7-95 - Consolidated Value-Added Tax Regulations
RR No. 5-96 - Amendment to Sections 245 of the Tax Code in relation to Revenue Regulations No. 7716 - Export Services and Importation of Meat to WTO Member VAT exempt.
RR No. 6-97 - Implementing Republic Act. No. 2241 An Act Amending Republic Act no. 7716, otherwise known as the Expanded Value-Added Tax Law, and other pertinent provisions of the National Internal Revenue Code, as amended and further amending Revenue Regulations No. 7-95, as amended otherwise known as the Consolidated Value-Added Tax Regulations
RR No. 13-97 - Amending further Revenue Regulations No. 7-95 as last amended by Revenue Regulations No. 6-97
RR No. 7-99 - Amends further Revenue Regulations No. 7-95 relative to the submission of the Summary Lists of Sales and Purchases in magnetic form
RR No. 8-99 - Provides penalties for violation of the requirement that output tax on sale of goods and services should not be separately indicated in the sales invoice or official receipt
RR No. 18-99 - Prescribes the regulations relative to the imposition of VAT on services of banks, nonbank financial intermediaries and finance companies beginning January 1, 2000
RR No. 19-99 - Prescribes the regulations relative to the imposition of VAT beginning January 1, 2000 on the sale of services by persons engaged in the practice of profession or calling and professional services rendered by general professional partnerships; services rendered by actors, actresses, talents, singers, and emcees; radio and television broadcasters and choreographers; musical, radio, movie, televisions and stage directors; and professional athletes
RR No. 4-2000 - Prescribes the posting in place of business of a notice on the requirement for the issuance of sales/commercial invoices and/or official receipts by persons engaged in trade or business, including the exercise of profession
RR No. 6-2001 - Amends pertinent pro1visions of certain revenue issuances relative to the inclusion of additional taxpayers to be subject to Final Withholding Tax, revision of the Withholding Tax rates on certain income payments subject to Creditable Withholding Tax, time for the filing of various tax returns and payment of the taxes due thereon and others
RR No. 11-2003 - Extends further the deadline for registration and other compliance requirements during the transitory period of the imposition of Value-Added Tax (VAT) on sale of services by professionals and brokers
RR No. 12-2003 -Amends certain provisions of RR No. 18-99 which governs the imposition of VAT on services of banks, non-bank financial intermediaries and finance companies beginning January 1, 2003
RR No. 14-2003 - Amending Revenue Regulations No. 2-98, as amended, in order to simplify the collection of tax, through withholding at the source, on sales of goods or services subject to 3% percentage tax under Section 116 of the Code, and/or to the value-added tax (VAT) under Sections 106 and 108 of the same Code
CODAL REFERENCE Sections 105 to 115 of the National Internal Revenue Code
FREQUENTLY ASKED QUESTIONS I. General VAT Queries
1) Who are required to file VAT returns and/or pay VAT?
Every person or entity who in the course of his trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Five Hundred Fifty Thousand Pesos (P 550,000.00) for any twelve month period A person required to register as VAT taxpayer but failed to register A person who imports goods
2) Where are VAT returns filed?
The Monthly VAT Declaration (BIR Form 2550M) and Quarterly VAT Return (BIR Form 2550Q) shall be filed with any Authorized Agent Bank (AAB) in the place where the taxpayer is registered or required to be registered.
In cases of no-payment, the return shall be filed with the Revenue District Office (RDO)/LTDO and LTAD where the taxpayer is registered or required to be registered.
In places where there are no AABs, it shall be filed with and the tax paid to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the place where the RDO is located.
3) What is "output tax"?
Output tax means the VAT due on the sale, lease or exchange of taxable goods or properties or services by any person registered or required to register under section 236 of the Tax Code.
4) What is "input tax"?
Input tax means the VAT paid by a VAT-registered person in the course of his trade or business on importation of goods or local purchase of goods or services, including lease or use of property, from a VAT-registered person. It shall also include the transitional input tax determined in accordance with Section 111 of the Tax Code
5) What comprises "goods or properties"?
The term "goods or properties" shall mean all tangible and intangible objects, which are capable of pecuniary estimation and shall include:
a) Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business b) The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right c) The right or the privilege to use in the Philippines any industrial, commercial or scientific equipment d) The right or the privilege to use motion picture film, films, tapes and discs e) Radio, television, satellite transmission and cable television time
6) What comprises "sale or exchange of services"?
The term "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by the following:
a) Construction and service contractors b) Stock, real estate, commercial, customs and immigration brokers c) Lessors of property, whether personal or real d) Warehousing services e) Lessors or distributors of cinematographic films f) Persons engaged in milling, processing, manufacturing or repacking goods for others g) Proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts h) Proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers i) Dealers in securities j) Lending investors k) Transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land, air and water relative to their transport of goods or cargoes
l) Services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of the Tax Code m) Services of banks, non-bank financial intermediaries and finance companies n) Services of non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies o) Similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties
The phrase "sale or exchange of services" shall include:
a) The lease or the use of or the right or privilege to use any copyright, patent, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right b) The lease or the use of, or the right to use of any industrial, commercial or scientific equipment c) The supply of scientific, technical, industrial or commercial knowledge or information d) The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right or any such knowledge or information e) The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any brand, machinery or other apparatus purchased from such non-resident person f) The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme g) The lease of motion picture films, films, tapes and discs h) The lease or the use of or the right to use radio, television, satellite transmission and cable television time
7) What is a zero-rated sale?
It is a sale, barter or exchange of goods, properties and/or services subject to 0% VAT pursuant to Sections 106 (A) (2) and 108 (B) of the Tax Code.
8) What transactions are considered as zero-rated sales?
The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate:
a) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) b) Services other than those mentioned in the preceding paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) c) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate d) Services rendered to vessels engaged exclusively in international shipping e) Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceeds seventy percent (70%) of total annual production The following sales shall be subject to zero percent (0%) rate:
a) Sale of goods which are directly shipped by a VAT-registered resident to a place outside the Philippines b) Sale of goods which are considered as "deemed" export sales by a VAT-registered person to certain entities who are also residents of the Philippines: Sales to export-oriented enterprises which the Code considers as export sales at the level of the supplier of raw materials
Sales to entities, the exemption of which, under a special law or an international agreement with the Government of the Philippines, effectively zero rates such sales Sales of gold to the Bangko Sentral ng Pilipinas Foreign currency denominated sales of goods c) Sales considered as exportation of goods under a special law such as Executive Order No. 226 (Omnibus Investments Code of 1987) and Republic Act No. 7916 (PEZA Law)
9) Where will taxpayers file their applications for VAT zero-rating?
Taxpayers may file their application with the Audit Information, Tax Exemption and Incentives Division (AITEID) at the BIR National Office.
10) What is a Contractor's Final Payment Release Certificate and where should taxpayers file their application for this?
The Contractor's Final Payment Release Certificate is issued by the BIR before a government contractor is fully paid for his contract with the government. Taxpayers may file their application at the BIR National Office at the Audit Information, Tax Exemption and Incentives Division (AITEID)
11) What transactions are considered as deemed sales?
The following transactions are considered as deemed sales:
a) Transfer, use or consumption, not in the course of business, of goods or properties originally intended for sale or for use in the course of business b) Distribution or transfer to: Shareholders or investors as share in the profits of the VAT-registered person; or Creditors in payment of debt
c) Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned d) Retirement from or cessation of business, with respect to inventories of taxable goods existing as of such retirement or cessation
12) What is VAT-exempt sale?
It is a sale of goods, properties or service and the use or lease of properties which is not subject to output tax and whereby the buyer is not allowed any tax credit or input tax related to such exempt sale.
13) What are the VAT-exempt transactions?
a) Sale of non-food agricultural products, marine and forest products in their original state by the primary producer or owner of the land where the same were produced b) Sale of cotton and cotton seeds in their original state and copra c) Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption and breeding stock and generic materials thereof d) Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets) e) Sale or importation of coal and natural gas, in whatever form or estate, and petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to the Excise Taxes imposed under Title VI of the Tax Code f) Sale or importation of raw materials to be used by the buyer or importer himself in the manufacture of petroleum products subject to excise tax, except lubricating oil, processed gas, grease, wax and petrolatum g) Importation of passenger and/or cargo vessels of more than five thousand tons, whether coastwise or ocean-going, including engine and spare parts of said vessel to be used by the importer himself as operator thereof
h) Importation of personal and household effects belonging to residents of the Philippines returning from abroad and nonresident citizens coming to resettle in the Philippines; Provided, that such goods are exempt from customs duties under the Tariff and Customs Code of the Philippines i) Importation of professional instruments and implements, wearing apparel, domestic animals, and personal household effects (except any vehicle, vessel, aircraft, machinery, other goods for use in the manufacture and merchandise of any kind in commercial quantity) belonging to persons coming to settle in the Philippines, for their own use and not for sale, barter or exchange, accompanying such persons, or arriving within ninety (90) days before or after their arrival, upon the production of evidence satisfactory to the Commissioner of Internal Revenue, that such persons are actually coming to settle in the Philippines and that the change of residence is bona fide j) Services subject to percentage tax under Title V of the Code k) Services by the agricultural contract growers and milling for others of palay into rice, corn into grits, and sugar cane into raw cane sugar l) Medical, dental, hospital and veterinary services subject to the provisions of Sec. 17 of RA 7716, as amended m) Educational services rendered by private educational institutions, duly accredited by the Dept. of Education Culture and Sports (DECS), and Commission on Higher Education (CHED), and those rendered by the government educational institutions n) Sale by the artist himself of his works of art, literary works, musical compositions and similar creations, or his services performed for the production of such works o) Services rendered by individuals pursuant to an employer-employee relationship p) Services rendered by regional or area headquarters established in the Philippines by multinational corporations which act as supervisory communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific Region and do not earn or derive income from the Philippines q) Transactions which are exempt under international agreements to which the Philippines is a signatory, or under special laws, except those under the following laws: P.D. No. 66 - Export Processing Zone Authority (EPZA) registered firms P.D. No. 529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949 P.D. No. 1590 - Philippine Airlines (PAL) relative to domestic transport of goods or cargoes r) Sales by agricultural cooperatives duly registered with the Cooperative Development Authority (CDA) to their members as well as sale of their produce, whether in its original state or processed form, to non-members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production and/or processing of their produce
s) Sales by electric cooperatives duly registered with the Cooperative Development Authority (CDA) or National Electrification Administration (NEA), relative to the generation and distribution of electricity, as well as their importation of machineries and equipment, including spare parts, which shall be directly used in the generation and distribution of electricity t) Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered with the Cooperative Development Authority (CDA) whose lending operation is limited to their members u) Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with the Cooperative Development Authority: Provided, that the share capital contribution of each member does not exceed Fifteen Thousand Pesos (P 15,000) and regardless of the aggregate capital and net surplus ratably distributed among the members v) Export sales by persons who are not VAT-registered w) Lease of a residential unit with a monthly rental not exceeding Eight Thousand Pesos (P 8,000.00), regardless of the amount of aggregate rentals received by the lessor during the year, provided that the exemptions likewise applies to lease of residential units where the monthly rental per unit exceeds P 8,000.00 but the aggregate rentals of the lessor during the year do not exceed P 550,000.00. x) Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements y) Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales and/or receipts does not exceed the amount of P 550,000.00 z) Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business or real property utilized for low-cost and socialized housing as defined by Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992 and other related laws, house and lot and other residential dwelling valued at P 1,000,000 and below.
II. RELIEF-Related Queries
1) What is 'RELIEF"?
RELIEF means Reconciliation of Listings for Enforcement. It supports the third party information program of the Bureau through the cross referencing of third party information from the taxpayers' Summary Lists of Sales and Purchases prescribed to be submitted on a quarterly basis.
2) Who are required to submit Summary List of Sales?
VAT taxpayers with quarterly total sales/receipts (net of VAT) exceeding Two Million Five Hundred Thousand Pesos (P 2,500,000) are required to submit a Summary List of Sales.
3) Who are required to submit Summary List of Purchases?
VAT taxpayers with quarterly total purchases (net of VAT) exceeding One Million Pesos (P 1,000,000) are required to submit Summary List of Purchases.
4) What are the Summary Lists required to be submitted?
a) Quarterly Summary List of Sales to Regular Buyers/Customers and Casual Buyers/Customers and Output Tax; b) Quarterly Summary List of Local Purchases and Input tax; and c) Quarterly Summary List of Importation
5) Who are "Casual Buyers/Customers?"
Casual Buyers/Customers refer to buyers/customers who are engaged in business/ exercise of profession but did not qualify as regular buyers/customers, the amount of individual transaction is P 100,000 or more but did not qualify as regular buyers/customers.
6) Who are "Regular Buyers/Customers"?
They shall refer to buyers/customers who are engaged in business or exercise of profession with whom the taxpayer has transacted at least six (6) transactions in the previous year or current year, regardless of the amount of sale per transaction.
7) What are the contents of the Quarterly Summary List of Sales to Regular Buyers/Customers and Casual Buyers/Customers and Output Tax?
The Quarterly Summary List of Sales to regular buyers/customers and casual buyers/customers and output tax shall indicate the following:
a) BIR Registered Name of the Buyer who is engaged in business/exercise of profession b) TIN of the Buyer for sales subject to VAT c) Exempt Sales d) Zero-Rated Sales e) Sales Subject to VAT (exclusive of VAT) f) Output Tax (VAT on Sales)
8) What are the contents of the Quarterly Summary List of Local Purchases and Input Tax?
The Quarterly Summary List of Local Purchases and Input Tax shall indicate the following:
a) BIR Registered Name of the Seller/Supplier/Service Provider b) Address of Seller/Supplier/Service Provider c) Taxpayer Identification Number (TIN) of the Seller d) Exempt Purchases e) Zero-Rated Purchases f) Purchases Subject to VAT (Exclusive of VAT) -
On Services On Capital Goods On Goods and Other than Capital Goods g) Creditable Input Tax h) Non-Creditable Input Tax
9) What are the contents of the Quarterly Summary List of Importations?
The Quarterly Summary List of Importations shall indicate the following:
a) Import Entry Declaration Number b) Assessment /Release Date c) Date of importation d) Name of Seller e) Country of Origin f) Dutiable Value g) All Charges Before release from the Customs' Custody h) Landed Cost: Exempt Taxable (Subject to VAT) i) VAT Paid j) Official Receipt (OR) No. of the Official Receipt Evidencing Payment of the Tax k) Date of VAT Payment
10) When and where will taxpayers file/submit the Quarterly Summary List of Sales and Purchases?
The quarterly summary list of sales or purchases whichever is applicable shall be submitted to the RDO or LTDO or LTAD having jurisdiction over the taxpayer on or before the twenty-fifth (25th) day of the month following the close of each taxable quarter.
11) Can the VAT withheld and paid for the non-resident recipient, which VAT is passed on to the resident withholding agent by the non-resident recipient of the income, be claimed as an input tax?
Yes. It can be claimed as an input tax by the said VAT registered Withholding Agent upon filing his own VAT return, subject to the rules on allocation of input tax among taxable, zero-rated and exempt sales.
12) Are all Value Added Taxpayers required to mandatorily file the summary list in magnetic form using 3.5 inch floppy diskette?
Yes. Submission of the summary list in diskette form shall be required for the taxable quarter where the total sales (taxable net of VAT, zero-rated, exempt) exceed P 2,500,000 or total purchases (taxable net of VAT, zero-rated, exempt) exceed P 1,000,000.
13) What is the clear-cut rule on the mandatory submission of summary lists in diskette form?
The following are the rules in the submission of the said summary lists:
a) They are required to submit the said summary lists in diskette form for the taxable quarter where the total sales (taxable net of VAT, zero-rated, exempt) exceed P 2,500,000 or total purchases (taxable net of VAT, zero-rated, exempt) exceed P 1,000,000. b) Those who did not meet the threshold need not file summary lists; however, if there is a taxable quarter where aforesaid VAT taxpayers meet or exceed the threshold, they will be required to submit the prescribed electronic format on such taxable quarter and on the next three (3) succeeding taxable quarters, regardless of whether or NOT such succeeding taxable quarter sales and/or purchases meet/exceed the threshold.
14) What is the penalty for failure to submit the quarterly summary list in the prescribed manner?
Administrative Penalty
P 1,000 - For each failure to file, keep or supply the required documents Aggregate amount not to exceed P 25,000 for the taxable year
Criminal Penalty
Willful failure to keep any record or to supply the information at the time or times required shall be subject to the criminal penalty under the Tax Code of 1997. *Compromise on such violation SHALL NOT relieve the violating taxpayer from the obligation to submit the required documents.
III. RELIEF Technical Queries
1) What needs to be done to resolve errors occurring during the use of the RELIEF system?
Make sure that there is only one session of RELIEF active at all times. Close all RELIEFsessions and reactivate again. Make sure that a clean copy of the installer disk is on hand. Get the latest copy from a nearest Revenue District Office or Revenue Data Center or download from the BIR website at www.bir.gov.ph.
2) Is it possible to use the system for more than one company in a single PC? (For accounting and law firms taking charge of transactions of numerous companies)
Yes. Create new folder/s in your root directory. Rename the folder/s with the company name for identification purposes. Copy all the contents of the folder BIR_RLF and paste into each of the newly created folders. Then create shortcuts for the BIRRLF.EXE file found in each folder and paste them to
your desktop. It is also recommended to rename these files affixing them with the name of the company (for example: ABC Company_Data Entry). Make sure that Owner Information is changed/updated for newly created folders.
3) How can the user resolve the error "The Input Tax/Output Tax must be equivalent to 10% of the transaction" that occurs during validation?
If this is the only error, the user could ignore this error and proceed to submitting the summary lists since the RDO has the updated validation module. The user could also request for a copy of the URLFVALID.EXE file from the RDO to update their RELIEF Validation module. They only need to decompress the file in the root directory of their PC.
4) What is the prescribed screen resolution for the user to view all available options/buttons after selecting a type of transaction?
Check the settings of the screen display (desktop) by going to the Control Panel then go to Display and adjust the screen setting to 800x600 or 1024x768 resolution.
5) Can the user submit their summary list using their own extract program?
The user may use their own extract program provided that their system has the ability to convert the database files into comma delimited text files. Have their IT department develop a script within their database program to do this. Please refer to the prescribed templates / file formats available at RDO or they can download the technical annexes from the BIR website.
User can also submit using the excel format as long as it conforms with the BIR file format under RMC 24-2002. User can ask their RDO for a copy of the Excel templates for their guidance.
6) Where can the users get the RELIEF installer, technical annexes and job-aids?
They can get copies from the RDO or RDC. If they have access to the internet, they can access the BIR webpage (www.bir.gov.ph) then go to BIR FORMS. Click on the 2550Q form to go to the location of the downloadable installers, annexes and job-aids.
7) How can the user successfully validate a generated file (.DAT) if upon clicking the Validate File button, a BIR System Message stating "Command contains unrecognized phrase/keyword. Error Number: 36" appeared?
The user must make sure that the generated file is not located inside a folder where the foldername contains spaces. The user can rename the folder wherein blank spaces are replaced with underscores. The user can get the update patch from his RDO or from the web to update their Validation module.
8) How will the user remove or uninstall the RELIEF program from the computer?
Select RUN from the Taskbar Start Menu then type C:\BIR_RLF\SETUP\SETUP.EXE, press the Enter key and follow the prompts.
9) For users who will submit using the Excel format, what is the prescribed formula for computations?
Users always encounter the "Header not equal to total details" Error during validation. All computations in the Excel format must be rounded off to the nearest 2 decimal places. (For example: L3=J3*K3 - it must be L3=round(J3*K3,2))
10) In case of detailed explanations for questions, where can the user seek help?
User can get in touch with the Taxpayer Service Section of their RDO or contact the BIR Helpdesk at 926-9630, 981-7050 to 51, 925-2015-17 or email at hdeskno@bir.gov.ph.
IV. VAT on Professionals
1) How to compute the VAT on professionals
The general formula is:
Output Taxes - Input Taxes = VAT Payable
Fees and Expenses including VAT: (a)
Professional Fee with VAT x 1/11 Output Tax Less: Profession-related Expenses x 1/11 (with VAT Receipts) Input Tax Difference VAT Payable
Fees and Expenses excluding VAT: (b)
Professional Fee x 10% Output Tax Less: Profession-related Expenses x 10% (with VAT Receipts) Input Tax Difference VAT Payable
NOTE: (a) Computation is in accordance with Secs. 106D and 108C of the Code. (b) Computation per VAT Return presentation. VAT Payable in (a) and (b) computations should be the same.
2) What are the allowable Input VAT?
10% of purchase price, exclusive of VAT or 1/11 of total VAT invoice/OR amount on: Office Supplies / Equipment Rental of office Accountant's fees Other purchases of Goods and Services related to professional fees earned Note: 1) Supplier of goods/services must be VAT registered 2) Substantiated with VAT OR/invoice
3) Illustrations of VAT Computation
Assumption 1: PP absorbs the VAT
In CY 2002, Professional Fee for Services was P 1,000,000 In CY 2003, Professional Fee for Services is P 1,000,000 Treatment: CY 2002: Income is P 1,000,000.00 CY 2003: Income is 10/11 of P 1,000,000 P 909,091.00 Output VAT is 1/11 of P 1,000,000 90,909.00 Gross Receipt from Clients/Px + VAT P 1,000,000.00
Assumption 2: Payor absorbs the VAT
In CY 2002, Professional Fee for Services was P 1,000,000
In CY 2003, Professional Fee for Services is P 1,000,000, plus 10% VAT of P 100,000 Treatment: CY 2002: Income is P 1,000,000.00 CY 2003: Income P 1,000,000.00 Income P1M x 10% Output tax 100,000.00 Gross Receipt from Clients/ Px + VAT P1,100,000.000
4) How can I compute the 20% Withholding Tax using Assumptions 1 and 2?
CY 2002: Income P 1,000,000.00 20% Withholding Tax 200,000.00 Net Amount Received from Payor P 800,000.00
CY 2003: (PP absorbs the VAT) Income P 909,091.00 Add: 10% VAT 90,909.00 Gross Amount Rec'd. from Payor P 1,000,000.00 Less: 20% of P 909,091.00 181,818.00 Net Amount Received from Payor P 818,182.00
CY 2003: (Payor Absorbs the VAT)
Income P 1,000,000.00 Add: 10% VAT 100,000.00 Gross Amount Rec'd. from Payor P 1,100,000.00 Less: 20% of P 1,000,000 200,000.00 Net Amount Received from Payor P 900,000.00
5) How to record the professional fee in the Books of Accounts of the Professional Practitioner
Debit: Cash 900,000 Debit: Creditable W/Tax 200,000 Credit: Professional Fees 1,000,000 Credit: Output VAT Payable 100,000
6) How to record the professional fee in the Books of Accounts of the Clients/Patients
Debit: Expenses 1,000,000 Debit: Input VAT Credit 100,000 Credit: Cash 900,000 Credit: Withholding Tax Payable 200,000
7) How to issue a VAT Official Receipt by the Professional Practitioner
CLICK to View tthe Receipt
The invoice or official receipt of a VAT-registered PP must show his name, address, TIN, and professional fee, with VAT and other particulars.
8) Compliance Requirements for PPs
Payment of P 500 annual registration fee, and every year thereafter, on or before January 31. Printing and registration of VAT Official Receipts Registration and keeping of Books of Accounts Filing of monthly VAT declarations and quarterly VAT returns If applicable, submission of the Summary List of Sales and Purchases in softcopies (diskettes). Please use the BIR data entry module.
Registration as a VAT Taxpayer
File Form 1901 (Application for Registration) and Form 1925 (TIN Capture Form) for new taxpayers with the RDO having jurisdiction over PP's registered address. (By April 2003, TIN application was made available through the Internet, via the BIR Website at www.bir.gov.ph.) For old taxpayers registered as Non-VAT, file Form 1905 (Update Form) to change registration to VAT, or from NV-Exempt to NV-3%. Each registrant (for new or for change of registration) must indicate their specific profession (i.e., doctor, lawyer, CPA, etc.) in the appropriate registration form.
Registration of Official Receipts
Submit Inventory of Non-VAT unused receipts (as of December 31, 2002) - number of booklets and serial numbers not later than March 19, 2003. Stamp unused receipts with "VAT-registered as of ________" on ALL copies, and use only until June 30, 2003 For new Official Receipts, secure BIR Permit to Print
Registration and Keeping of Books of Accounts
Journal Ledger Subsidiary Professional Income Book Subsidiary Purchases / Expenses Book
Filing and Payment of VAT
Forms to be used:
Form 2550M (Monthly VAT Declaration) Form 2550Q (Quarterly VAT Return)
Period/Form1st Month of the Quarter (Form 2550M) Due dates20th day of the next month 2nd Month of the Quarter (Form 2550M) 20th day of the next month 3rd Month, con-solidated for the Quarter (Form 2550Q) 25th day of the next month
Where to File and Pay the VAT
Pay to the Accredited Agent Bank (AAB) within the Revenue District Office (RDO) where the PP is registered. In areas where there are no AABs, pay to the Collection Agent in the municipality of the RDO where registered. If without VAT payment, file return with the RDO.
Other Transitional Requirements
Submit Billings for Uncollected Professional fee for Sale of Services Rendered on or before December 31, 2002, not later than March 19, 2003. Submit Inventory of Goods (other than Capital Goods), Materials, and Supplies, as of December 31, 2002, not later than March 19, 2003, to claim transitional (presumptive) input VAT.
V. VAT on Doctors
1) If a doctor has several clinics located in different districts, should he register and pay the corresponding fee for each of the clinics?
Yes, the doctor should register and pay the corresponding fee for each of the clinic located in different districts, as each clinic is considered a separate and distinct establishment.
2) What is the tax treatment for a doctor who has no clinic but is affiliated with several hospitals?
The doctor is considered a professional, subject to 10% VAT provided the gross professional fees is more than P= 550,000.00 and 3% Percentage Tax if P= 550,000.00 and below. He should register his clinic but not his affiliations.
3) A doctor operates a clinic and at the same time hires (as employees) several doctors as part of his staff. For the services provided to patients, the clinic issues the official receipt of the clinic. How will the VAT be charged when the clinic later gives to the individual doctors their professional fees?
If the hired doctors are employees receiving compensation income, they are not subject to VAT. If, however, they share in the professional fees, then there exists a professional partnership and their income/fee is subject to VAT. Any amount they receive from the clinic shall be considered as inclusive of VAT. But the clinic is exempt from VAT as far as medical services are concerned, but the professional fee received is subject to VAT.
4) Can a professional doctor claim input VAT? What are the sources of input taxes?
Yes, he can claim input VAT on his purchases that are related to the practice of profession and supported with a VAT invoice/official receipts issued in his name.
5) Is a doctor with a maximum of 10 consultations a year required to have his own receipts printed? Is this not too costly for him?
Yes, the determining factor is his practice of profession and not the number of transactions in a year. Section 237 of the Tax Code provides that all persons subject to internal revenue tax shall for each sale/transfer of merchandise or for services rendered valued at P= 25.00 or more must issue a duly registered receipt or sales invoice.
6) Are the fees of physical therapists, not a GPP, subject to VAT?
Yes, they are subject to 10% VAT if their gross receipt is more than P= 550,000.00. If their gross receipt is P= 550,000.00 or less they are subject to 3% Percentage Tax, unless they opt to register as VAT taxpayer.
VI. VAT on Lawyers
1) What constitute gross receipts of lawyers that is subject to VAT?
The gross receipts of lawyers may constitute of, but not limited to the following: retainers' fees, acceptance fees, appearance fees, consultation fees, notarial fees and the like
2) If a lawyer, employed in the government, provides/operates a notarial service, is he required to register as VAT taxpayer with regard to his notarial fees?
Yes, because his notarial fees is part of his professional income and not earned under an employeeemployer relationship.
VII. VAT on Insurance Agents
1) An agent of a life insurance company has been registered as a Non- VAT Taxpayer, is it necessary for him to register as VAT Taxpayer?
An agent is required to register as VAT taxpayer if he is earning more than P= 550,000.00 in any twelve-month period. If his expected income for the 12-month period is P= 550,000.00 or less, he is subject to 3% Percentage Tax, unless he opts to register as a VAT taxpayer.
2) Is the P= 500.00 registration fee a one-time payment only? Will it apply to the succeeding years?
The P= 500.00 is a registration fee payable annually on or before January 31 of each year.
3) What particular books of accounts are necessary for taxation purposes?
Generally, the books of accounts necessary for taxation purposes are Journals and Ledgers. Professional taxpayers however, are required to keep Subsidiary Professional Income Book and Subsidiary Purchases/Expense Book for their gross sales/gross receipts and purchases/expenses.
4) Are they required to issue Official Receipts?
Yes, Section 237 of the Tax Code provides that all persons subject to internal revenue tax shall for each sale/transfer of merchandise or for services rendered valued at P= 25.00 or more must issue a duly registered receipt or sales invoice. In addition, in order to claim Input VAT, the name, address and TIN of the purchaser/client must be indicated in the receipt/invoice.
VIII. Other Professional Practitioners
1) What about other individuals who practice certain calling but need not undergo government exam?
Said individuals are subject to VAT if their gross receipts/income is more than P= 550,000.00. They are subject to 3% Percentage Tax if their gross receipts/income is P= 550,000.00 or less, unless they opt to register as VAT taxpayer. However, if their service is rendered under an employee-employer relationship, then they are not subject to VAT nor to Percentage Tax.
Examples of individuals who practice certain calling are tourist guides, trainers, masseurs, brokers and other individuals who are paying occupational tax in the local or municipal government, and there exist No employer-employee relationship.
WITHHOLDING TAX
Description Monthly Remittance of Value-Added Taxes and Other Percentage Taxes Withheld Remittance of Percentage Tax on Winnings and Prizes Withheld By Race Track Operators Monthly Remittance of Income Taxes Withheld On Compensation Monthly Remittance of Income Taxes Withheld (Expanded) Monthly Remittance of Final Income Taxes Withheld Monthly Remittance of Final Income Taxes Withheld on Interest Paid and Yield on Deposit Substitutes, Trusts, Etc. Remittance of Final Income Taxes Withheld on Fringe Benefits Paid To Employees Other Than Rank and File Annual Information on Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt From Withholding Tax Annual Information on Income Taxes Withheld on Compensation and Final Withholding Taxes Withholding Tax Remittance For Onerous Transfer of Real Property Other Than Capital Asset (Including Taxable and Exempt) Related Revenue Issuances Codal Reference Frequently Asked Questions
DESCRIPTION -Withholding Tax on Compensation is the tax withheld from income payments to individuals receiving purely compensation income arising from an employer-employee relationship.
- Expanded Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable quarter year.
- Final Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is not creditable against the income tax due of the payee for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the said income.
- Withholding Tax on Government Money Payments (GMP) is a tax withheld by government bureaus, offices and instrumentalities, including government-owned or-controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations. -Withholding Tax on GMP Percentage Taxes - is the tax withheld by government bureaus, offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations from non-VAT taxpayers -Withholding Tax on GMP VAT Taxes - is the tax withheld by government bureaus, offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations who are VAT registered.
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Monthly Remittance Of Value-Added Taxes And Other Percentage Taxes Withheld Tax Form BIR Form1600 - Monthly Remittance Return of Value-Added Taxes and Other Percentage Taxes Withheld
Who Are Required To File - All government offices, bureaus, agencies or instrumentalities, local government units, government owned and controlled corporation on money payments made to private individual, corporations, partnerships, association and other judicial/artificial entities under RA Nos. 1051, 7649, 8241 and 8424
-Payors to non-residents receiving income subject to Value-Added Tax
Documentary Requirements 1. Alphabetical list of payees indicating the following: Month TIN of withholding agent Name of Withholding Agent TIN of Payee ATC Nature of Payment Name of Payee Amount of Payment Tax Rate Tax Required to be Withheld
2. Return previously filed and proof of tax payments, if amended return
Procedures 1. Fill-up BIR Form 1600 in triplicate copies.
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600, together with the required attachments and your payment.
Receive your copy of the duly stamped and validated form from the teller of the AAB's /Revenue Collection Officer/duly authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are registered and present the duly accomplished BIR Form 1600, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.
Deadline On or before the tenth (10th) day of the month following the month the withholding was made
Tax Rates (Click tax rates for th PDF file)
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Remittance Of Percentage Tax On Winnings And Prizes Withheld By Race Track Operators
Tax Form BIR Form 1600 WP - Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators
Who Are Required To File -Operators of race tracks
Documentary Requirements 1. Alphalist of Payees indicating the following: Month TIN of withholding agent Name of Withholding Agent TIN of Payee Name of Payee ATC Nature of Payment Amount of Payment Tax Rate Tax Required to be Withheld
2. Return previously filed and proof of tax payments, if amended return
Procedures 1. Fill-up BIR Form 1600 WP in triplicate copies.
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600 WP, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600 WP, together with the required attachments and your payment
Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600 WP, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative
Deadline Within twenty (20) days from the date the tax was deducted and withheld
Tax Rates
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Monthly Remittance Of Income Taxes Withheld On Compensation
Tax Form BIR Form 1601 C - Monthly Remittance Return of Income Taxes Withheld on Compensation
Who Are Required To File Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on compensation paid to employees
Documentary Requirements Return previously filed and proof of tax payments, if amended return
Procedures 1. Fill-up BIR Form 1601 C in triplicate copies.
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 C, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 C, together with the required attachments and your payment Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 C, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative
Deadline Filing Via EFPS
Group A - Fifteen (15) days following end of the month Group B - Fourteen (14) days following end of the month Group C - Thirteen (13) days following end of the month
Group D - Twelve (12) days following end of the month Group E - Eleven (11) days following end of the month
except for taxes withheld for the month of December which shall be filed on or before January 20th of the succeeding year
Manual Filing
On or before the tenth (10th) day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year
Tax Rates
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Monthly Remittance Of Income Taxes Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real Property Classified as Ordinary Asset]
Tax Form BIR Form 1601 E - Monthly Remittance Return of Income Taxes Withheld (Expanded) [Except for Transactions Involving Onerous Transfer of Real Property Classified as Ordinary Asset]
Who Are Required To File Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Expanded/Creditable Withholding Taxes
Documentary Requirements Return previously filed and proof of tax, if amended return
Procedures 1. Fill-up BIR Form 1601E in triplicate copies.
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 E, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 E, together with the required attachments and your payment Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are registered and present the duly accomplished BIR Form 1601 E, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.
Group A - Fifteen (15) days following end of the month Group B - Fourteen (14) days following end of the month Group C - Thirteen (13) days following end of the month Group D - Twelve (12) days following end of the month Group E - Eleven (11) days following end of the month
except for taxes withheld for the month of December which shall be filed on or before January 20th of the succeeding year
Manual Filing
Tax Rates
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Monthly Remittance Of Final Income Taxes Withheld
Tax Form BIR Form 1601 F - Monthly Remittance Return of Final Income Taxes Withheld
Who Are Required To File
Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Final Withholding Taxes
Documentary Requirements Return previously filed and proof of tax, if amended return
Procedures 1. Fill-up BIR Form 1601 F in triplicate copies. 2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 F, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 F, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1601 F, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.
Deadlines On or before the tenth (10th) day of the month following the month the withholding was made, except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year
Tax Rates
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Monthly Remittance Of Final Income Taxes Withheld On Interest Paid And Yield On Deposit Substitutes, Trust, Etc.
Tax Form BIR Form 1602 - Monthly Remittance Return of Final Income Taxes Withheld on Interest Paid and Yield on Deposit Substitutes/Trust/Etc.
Who Are Required To File Banks, non-bank financial intermediaries, finance corporations, investment and trust companies and similar institutions
Documentary Requirements Return previously filed and proof of tax payments, if amended return
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1602, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1602, together with the required attachments and your payment
Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1602, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.
Group A - Fifteen (15) days following end of the month Group B - Fourteen (14) days following end of the month Group C - Thirteen (13) days following end of the month Group D - Twelve (12) days following end of the month Group E - Eleven (11) days following end of the month
except for taxes withheld for the month of December which shall be filed on or before January 15 of the succeeding year
Manual Filing
Tax Rates
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G. Remittance Of Final Income Taxes Withheld On Fringe Benefits Paid To Employees Other Than Rank And File
Tax Form BIR Form 1603 - Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other than Rank and File
Who Are Required To File Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on fringe benefits furnished to employees other than rank and file subject to Final Withholding Tax
Documentary Requirements Return previously filed and proof of tax payments , if amended return
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1603, together with the required attachments and your payment.
In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1603, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1603, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative
Deadline Filing Via EFPS On or before the fifteenth (15th) day of the month following the end of the calendar quarter in which the fringe benefits were granted to the recipient.
Manual Filing On or before the tenth (10th) day of the month following the end of the calendar quarter in which the fringe benefits were granted to the recipient.
Tax Rates
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Annual Information On Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt From Withholding Tax
Tax Form BIR Form 1604 E - Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax
Who Are Required To File Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Expanded/Creditable Withholding Taxes
Documentary Requirements 1. Alphalist of Payees subjected to Expanded Withholding Tax
2. Alphalist of Other Payees Whose Income Payments Are Exempt form Withholding Tax but subject to Income Tax
3. Return previously filed and proof of tax payment for amended return Note: Above alpahalist are to be submitted in diskette format when total number of payees exceed 10 (RR 3- 2002).
Procedures 1. Fill-up BIR Form 1604 E in triplicate copies.
2. Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1604 E, together with the required attachments.
3. Receive your copy of the duly stamped and validated form from the RDO representative
Deadline On or before March 1 of the year following the calendar year in which the income payments subjected to expanded withholding taxes or exempt from withholding tax were paid.
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Annual Information On Income Taxes Withheld On Compensation And Final Withholding Taxes
Tax Form BIR Form 1604 CF - Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes
Who Are Required To File Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on: compensation paid to employees income payments subject to Final Withholding Taxes
Documentary Requirements 1. Alphalist of Employees as of December 31 With no Previous Employer within the year
2. Alphalist of Employees as of December 31 with Previous Employer within the year
3. Alphalist of Employees Terminated Before December 31
4. Alphalist of Employees Whose Compensation Income Are Exempt from Withholding Tax But Subject to Income Tax
5. Alphalist of Employees other than Rank and File Who Were Given Fringe Benefits During the Year
6. Alphalist of Payees Subjected to Final Withholding Tax
7. Return previously filed and proof of tax payment for amended return Note: Above alpahalist are to be submitted in Diskette format when total number of payees exceed 10 (RR 3-2002)
Procedures 1. Fill-up BIR Form 1604 CF in triplicate copies.
2. Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1604 CF, together with the required attachments.
3. Receive your copy of the duly stamped and validated form from the RDO representative.
Deadline On or before January 31 of the year following the calendar year in which the compensation payment and other income payments subjected to final withholding taxes were paid or accrued.
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Withholding Tax Remittance For Onerous Transfer Of Real Property Other Than Capital Asset (Including Taxable And Exempt)
Tax Form BIR Form 1606 - Withholding Tax Remittance Return (For Onerous Transfer of Real Property Other Than Capital Asset Including Taxable and Exempt) Who Are Required To File Every withholding agent/buyer on the sale, transfer or exchange of real property classified as ordinary assets. One return should be filed for every property (including portion of a property) purchased
Documentary Requirements 1. A copy of Notarized Deed of Sale or Exchange
2. Photocopy of Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) or Condominium Certificate of Title (CCT)
3. Certified True Copy of the latest Tax Declaration (lot and/or improvement)
4. Copy of BIR Ruling for tax exemption confirmed by the BIR, if applicable
5. Proof of Registration with HULRB or HUDCC, if applicable
2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office having jurisdiction over the place where the property being transferred is located and present the duly accomplished BIR Form 1606, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office having jurisdiction over the place where the property being transferred is located and present the duly accomplished BIR Form 1606, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer.
3. If there is no tax required to be remitted: Proceed to the Revenue District Office having jurisdiction over the place where the property being transferred is located and present the duly accomplished BIR Form 1606, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.
Tax Rates
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RELATED REVENUE ISSUANCES RR No. 2-98, RR No. 8-98, RR No. 12-98, RR No. 3-99, RR No. 8-2000, RR No. 10-2000, RR No. 9-2001, RR No. 3-2002, RR No. 4-2002, RR No. 14-2002, RR No. 19-2002, RR No. 14-2003, RR No. 16-2003, RR No. 17-2003
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CODAL REFERENCE Sections 78 to 83 of the National Internal Revenue Code
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FREQUENTLY ASKED QUESTIONS
1) What are the types of Withholding Taxes?
There are four types of withholding taxes, namely: a. Withholding Tax on Compensation b. Expanded Withholding Tax
c. Final Withholding Tax d. Withholding Tax on Government Money Payments - Withholding Tax on Vat - Withholding Tax on Percentage Taxes
2) What is compensation?
It means any remuneration received for services performed by an employee from his employer under an employee-employer relationship.
3) What are the different kinds of compensation?
Regular compensation - includes basic salary, fixed allowances for representation, transportation and others paid to an employee Supplemental compensation - includes payments to an employee in addition to the regular compensation such as but not limited to the following: - Overtime Pay - Fees, including director's fees - Commission - Profit Sharing - Monetized Vacation and Sick Leave - Fringe benefits received by rank & file employees - Hazard Pay - Taxable 13th month pay and other benefits - Other remunerations received from an employee-employer relationship
4) What are exempted from Withholding Tax on Compensation?
Remuneration as an incident of employment Retirement benefits received under RA 7641 Any amount received by an official or employee or by his heirs from the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee such as retrenchment, redundancy or cessation of business Social security benefits, retirement gratuities, pensions and other similar benefits Payment of benefits due or to become due to any person residing in the Philippines under the law of the US administered US Veterans Administration Payment of benefits made under the SSS Act of 1954, as amended Benefits received from the GSIS Act of 1937, as amended, and the retirement gratuity received by the government employee Remuneration paid for agricultural labor Remuneration for domestic services Remuneration for casual labor not in the course of an employer's trade or business Compensation for services by a citizen or resident of the Philippines for a foreign government or an international organization Payment for damages Proceeds of Life Insurance Amount received by the insured as a return of premium Compensation for injuries or sickness Income exempt under Treaty Thirteenth (13th) month pay and other benefits (not to exceed P 30,000) GSIS, SSS, Medicare and other contributions
5) Who are not subject to Withholding Tax on Compensation?
Any employee whose total compensation income does not exceed the statutory minimum wage of Five Thousand (P 5,000.00) Pesos a month or Sixty Thousand (P 60,000.00) Pesos a year is not subject to Withholding Tax on Compensation.
NOTE: Employee whose total annual compensation does not exceed P 60,000 shall be given two options with which to pay his income tax due as follows:
His compensation income shall be subjected to withholding tax, but he shall not be required to file the income return prescribed in Section 51 of the Code (filing of an individual return) except when covered by any of the situations enumerated in Sec. 2.83.4 of Revenue Regulations No. 2-98, or
His compensation income shall not be subject to withholding tax but he shall file his annual income tax return and pay the tax due thereon, annually.
When the employee has opted to have his compensation income subjected to Withholding tax so as to be relieved of the obligation of filing an annual Income Tax return and paying his tax due on a lump sum basis, he shall execute a waiver in a prescribed BIR Form of his exemption(s) from withholding, which shall constitute the authority for the employers to apply the withholding tax table provided under Revenue Regulations No. 2-98.
6) What income payments are subject to Expanded Withholding Tax?
a) Professional fees / talent fees for services rendered by the following: Those individually engaged in the practice of profession or callings Professional entertainers such as but not limited to actors and actresses, singers and emcees Professional athletes including basketball players, pelotaris and jockeys Directors involved in movies, stage, radio, television and musical directors Insurance agents and insurance adjusters
Management and technical consultants Bookkeeping agents and agencies Other recipient of talent fees Fees of directors who are not employees of the company paying such fees whose duties are confined to attendance art and participation in the meetings of the Board of Directors b) Professional fees, talent fees, etc for services of taxable judicial persons c) Rental of real property (in excess of P 10,000) used in business d) Rental of personal properties in excess of P 10,000 annually e) Rental of poles, satellites and transmission facilities f) Rental of billboards g) Cinematographic film rentals and other payments h) Income payments to certain contractors General engineering contractors General building contractors Specialty contractors Other contractors like: - Transportation contractors - Filling, demolition and salvage work contractors and operators of mine drilling apparatus - Operators of dockyards - Persons engaged in the installation of water system, and gas or electric light, hear or power - Operators of stevedoring, warehousing or forwarding establishments - Printers, bookbinders, lithographers and publishers, except those principally engaged in the publication or printing of any newspaper, magazine, review or bulletin which appears at regular intervals, with fixed prices for subscription and sale - Advertising agencies, exclusive of payments to media - Independent producers of television, radio and stage performances or shows - Independent producers of "jingles"
- Labor recruiting agencies - Persons engaged in the installation of elevators, central air conditioning units, computer machines and other equipment and machineries and the maintenance services thereon - Messengerial, janitorial, security, private detective and other business agencies - Persons engaged in landscaping services - Persons engaged in the collection and disposal of garbage - TV and radio station operators on sale of TV and radio airtime, and - TV and radio blocktimers on sale of TV and radio commercial spots - Persons engaged in the sale of computer services, computer programmers, software developer/designer, etc. i) Income distribution to the beneficiaries of estates and trusts j) Gross commission or service fees of customs, insurance, stock, real estate, immigration and commercial brokers and fees of agents of professional entertainers k) Commission, rebates, discounts and other similar considerations paid/granted to independent and exclusive distributors, medical/technical and sales representatives and marketing agents and sub-agents of multi level marketing companies l) Income payments to partners of general professional partnerships m) Payments made to medical practitioners through a duly registered professional partnership n) Payments for medical/dental/veterinary services thru hospitals/clinics/health maintenance organizations, including direct payments to service providers o) Gross selling price or total amount of consideration or its equivalent paid to the seller/owner for the sale, exchange or transfer of real property p) Additional income payments to government personnel from importers, shipping and airline companies or their agents q) Certain income payments made by credit card companies r) Income payments made by the top 10,000 private corporations to their purchase of goods and services from their local/resident suppliers other than those covered by other rates of withholding s) Income payments by government offices on their purchase of goods and services, from local/resident suppliers
t) Tolling fees paid to refineries u) Payments made by pre-need companies to funeral parlors v) Payments made to embalmers by funeral parlors w) Income payments made to suppliers of agricultural products x) Income payments on purchases of mineral, mineral products and quarry resources
7) What income payments are subject to Final Withholding Tax?
a) Income Payments to a Citizen or to a Resident Alien Individual: Interest on any peso bank deposit Royalties Prizes (except prizes amounting to P10,000 or less which is subject to tax under Sec. 25(A)(1) of the Tax Code Winnings (except from Philippine Charity Sweepstake Office and Lotto) Interest income on foreign currency deposit Interest income from long term deposit Cash and/or property dividends Capital Gains presumed to have been realized from the sale, exchange or other disposition of real property b) Income Payments to a Non-Resident Alien Engaged in Trade or Business in the Philippines On Certain Passive Income - cash and/or property dividend - Share in the distributable net income of a partnership - Interest on any bank deposits - Royalties - Prizes (except prizes amounting to P10,000 or less which is subject to tax under Sec. 25(A)(1) of the Tax Code.
- Winnings (except from Philippine Charity Sweepstake Office and Lotto) Interest on Long Term Deposits Capital Gains presumed to have been realized from the sale, exchange or other disposition of real property c) Income Derived from All Sources Within the Philippines by a Non-Resident Alien Individual Not Engaged in Trade or Business On gross amount of income derived from all sources within the Philippines On Capital Gains presumed to have been realized from the sale, exchange or disposition of real property located in the Philippines d) Income Derived by Alien Individual Employed by a Regional or Area Headquarters and Regional Operating Headquarters of Multinational Companies e) Income Derived by Alien Individual Employed by Offshore Banking Units f) Income of Aliens Employed by Foreign Petroleum Service Contractors and Subcontractors g) Income Payment to a Domestic Corporation Interest from any currency bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements derived from sources within the Philippines Royalties derived from sources within the Philippines Interest income derived from a depository bank under the Expanded Foreign Currency Deposit (FCDU) System Income derived by a depository bank under the FCDU from foreign transactions with local commercial banks On capital gains presumed to have been realized from the sale, exchange or other disposition of real property located in the Philippines classified as capital assets, including pacto de retro sales and other forms of conditional sales based on the gross selling price or fair market value as determined in accordance with Sec. 6(E) of the NIRC, whichever is higher h) Income Payments to a Resident Foreign Corporation Offshore Banking Units Tax on branch Profit Remittances
Interest on any currency bank deposits and yield or any other monetary benefit from deposit substitute and from trust funds and similar arrangements and royalties derived from sources within the Philippines Interest income on FCDU Income derived by a depository bank under the expanded foreign currency deposits system from foreign currency transactions with local commercial banks i) Income Derived from all Sources Within the Philippines by a Non-Resident Foreign Corporation Gross income from all sources within the Philippines such as interest, dividends, rents, royalties, salaries, premiums (except re-insurance premiums), annuities, emoluments or other fixed determinable annual, periodic or casual gains, profits and income or capital gains; Gross income from all sources within the Philippines derived by a non-resident cinematographic film owner, lessor and distributor On the gross rentals, lease and charter fees derived by a non-resident owner or lessor of vessels from leases or charters to Filipino citizens or corporations as approved by the Maritime Industry Authority On the gross rentals, charter and other fees derived by a non-resident lessor of aircraft, machineries and other equipment Interest on foreign loans contracted on or after August 1, 1986 j) Fringe Benefits Granted to the Employee (except Rank and File) Goods, services or other benefits furnished or granted in cash or in kind by an employer to an individual employee (except rank and file) such as but not limited to the following: - Housing - Vehicle of any kind - Interest on loans - Expenses for foreign travel - Holiday and vacation expenses - Educational assistance to employees or his dependents - Membership fees, dues and other expense in social and athletic clubs or other - similar organizations - Health insurance
- Informers Reward
8) What are the types of withholding tax on government money payments?
a) Withholding of Creditable Value Added Tax On gross payments for the purchase of goods On gross payments for the purchase of services Payments made to government public works contractors Payments for lease or use of property or property rights to non-resident owners b) Withholding of Percentage Tax Payments to the following: Any person engaged in business whose gross sales or receipts do not exceed P 550,000 and who are not VAT-registered persons. (Persons exempt from VAT under Sec. 109z of the Tax Code) Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn two wheeled vehicle Operators of international carriers doing business in the Philippines. Franchise grantees of electric, gas or water utilities Franchise grantees of radio and/or television broadcasting companies whose gross annual receipts of the preceding year do not exceed Ten Million (P10,000,000.00) Pesos and did not opt to register as VAT Taxpayers Banks and non-bank financial intermediaries and finance companies Life insurance companies Agents of foreign insurance companies Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai and race tracks Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities
A corporate issuer/stock broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO) /secondary public offering of shares of stock in closely held corporations
9) Who is a withholding agent?
A withholding agent is any person or entity who is required to deduct and remit the taxes withheld to the government.
10) What are the duties and obligations of the withholding agent?
The following are the duties and obligations of the withholding agent: a) To Register - withholding agent is required to register within ten (10) days after acquiring such status with the Revenue District office having jurisdiction where the business is located b) To Deduct and Withhold - withholding agent is required to deduct tax from all money payments subject to withholding tax c) To Remit the Tax Withheld - withholding agent is required to remit tax withheld at the time prescribed by law and regulations d) To File Annual Return - withholding agent is required to file the corresponding Annual Information Return at the time prescribed by law and regulations e) To Issue Withholding Tax Certificates - withholding agent shall furnish Withholding Tax Certificates to recipient of income payments subject to withholding
11) Who are required to file Withholding Tax returns?
a) For BIR Form 1600 - Monthly Remittance of Value-Added Tax and Other Percentage Tax - All government offices, bureaus, agencies or instrumentalities, local government units, government owned and controlled corporation on money payments made to private individual, corporations, partnerships, association and other judicial/artificial entities required under RA Nos. 1051, 7649, 8241 and 8424
- Payors to non-residents receiving income subject to Value-Added Tax b) For BIR Form 1600WP - Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Racetrack Operators - Operators of race tracks c) For BIR Form 1601C- Monthly Remittance Return of Income Tax Withheld on Compensation - Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on compensation paid to employees d) For BIR Form 1601E - Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded) - Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Expanded/Creditable Withholding Taxes e) For BIR Form 1601 F - Monthly Return of Final Income Taxes Withheld - Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Final Withholding Taxes f) For BIR Form 1602 -Monthly Remittance Return of Final Income Taxes Withheld (On Interest Paid on Deposits and Yield on Deposit Substitutes/Trusts/Etc.) - Banks, non-bank financial intermediaries, finance corporations, investment and trust companies and similar institutions g) For BIR Form 1603 - Quarterly Remittance Return of Final Income Taxes Withheld (On Fringe Benefits Paid to Employees Other than Rank and File) - Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on fringe benefits furnished to employees other than rank and file subject to Final Withholding Tax h) For BIR Form 1604CF - Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Tax - Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on compensation paid to employees - Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Final Withholding Taxes i) For BIR Form 1604E - Annual Information Return of Creditable Income Taxes Withheld (Expanded) Income Payments Exempt from Withholding Tax
- Every withholding agent/payor who is either an individual or non-individual required to deduct and withhold taxes on income payments subject to Expanded/Creditable Withholding Taxes j) For BIR Form 1606 - Withholding Tax Remittance Return (For Onerous Transfer of Real Property Other than Capital Assets (Including Taxable and Exempt) - Every withholding agent/buyer on the sale, transfer or exchange of real property classified as ordinary assets. One return should be filed for every property (including portion of a property) purchased.
EXCISE TAX
Contents Description Codal Reference Procedures and Compliance Requirements Tax Tables Tax Deadlines Tax Forms Related Revenue Issuances Frequently Asked Questions Description
Excise Tax is a tax imposed on goods manufactured or produced in the Philippines for domestic sale or consumption or any other disposition. It is also imposed on things that are imported.
Codal Reference Alcohol Products - Secs. 141 to 143

Tobacco Products - Secs. 144 to 147 Petroleum Products - Sec. 148 Mineral Products - Sec. 151 Miscellaneous Articles - Secs. 149 - 150
Procedures and Compliance Requirements How to Accomplish BIR Forms

a) BIR Form 2200-A Excise Tax Return for Alcohol Products NOTE: a) Computation of tax and explanations thereto are based on the items/numbers provided in the above-mentioned form b) Items 1 to 14 refer to the background information of the taxpayer c) Item 15 refers to manner of payment Unapplied Payment per Immediately Preceding Return Indicate the balance of advanced payment per return prior to this return Excise Tax Due on Actual Removals/Application 17A to 17B Indicate the inclusive date of removal 17D to 17E Indicate the inclusive date of removal 17G to 17H Indicate the inclusive date of removal 17J to 17K Indicate the inclusive date of removal 17M to 17N Indicate the inclusive date of removal 17C Indicate the excise tax due on actual removals (refer to Schedule I) 17F Indicate the excise tax due on actual removals (refer to Schedule I) 17I Indicate the excise tax due on actual removals (refer to Schedule I) 17L Indicate the excise tax due on actual removals (refer to Schedule I) 17Q Indicate the excise tax due on actual removals (refer to Schedule I) Item 18. Total Excise Tax Due Add Items 17C, 17F, 17I, 17L and 17Q
Item 16. Items 17.
Item 19.
Balance Unapplied/(Overapplied) Item 16 minus Item 18 Penalties Additional penalties are imposed in the following cases: 20A 1) A surcharge of twenty five percent (25%) of the amount due is imposed on the following cases: a) Failure to file any return and pay the tax or installment due thereon on or before due date; b) Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is required to be filed; c) Failure to pay the full or partial amount of tax shown on the return, or the full amount of tax due for which no return Is required to be filed on or before the due date; or d) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment. 2. A surcharge of fifty percent (50%) of the tax or of the deficiency tax,In case any payment has been made on the basis of such return Before the discovery of the falsity or fraud, for each of the following Violations: a) Willful neglect to file the return within the period prescribed by the Code or by the rules and regulations; or b) In case a false or fraudulent return is willfully made. 20B. Interest for late payment is computed at twenty percent (20%) per annum from the date the payment is due up to the date of full payment based on the basic tax payable in Item 19 20C. Please do not fill up this portion. You will be properly notified if any compromise penalty will be imposed. 20D. To get the total penalties, add Items 20A to 20C Balance Unapplied/(Deficiency) To get this, deduct Item 20D from Item 20 Payment Made Today Indicate payment made per this return Balance to be Applied Against Subsequent Removals To get this, add Items 21 and 22 Schedule I - Excise Tax Due on Actual Removals of Alcohol Products Chargeable Against Payments Column I - Refer to Applicable Alphanumeric Tax Code Column 2 - Refer to Description of the Product/Articles Subject to Excise Tax Column 3 - Refer to unit of measurement Column 4 - Refer to Applicable Excise Tax Rate Column 5 - Refer to Applicable Tax Base of the Products/Articles Column 6 - Refer to Excise Tax Due (Excise Tax Rate x Tax Base )
Item 20.
Item 21.
Item 22.
Item 23.
BIR Form 2200-AN-Excise Tax Return for Automobiles and Non-Essentials NOTE: a) Computation of tax and explanations thereto are based on the items/numbers provided in the above mentioned form b) Items 1 to 14 refer to the background information of the taxpayer.
Item 16. Item 17.
c) Item 15 refers to manner of payment Unapplied Payment per Immediately Preceding Return Indicate the balance of advanced payment per return prior to this return Excise Tax Due on Actual Removals/application 17A to 17B Indicate the inclusive date of removal 17D to 17E Indicate the inclusive date of removal 17G to 17H Indicate the inclusive date of removal 17J to 17K Indicate the inclusive date of removal 17M to 17N Indicate the inclusive date of removal 17C Indicate the excise tax due on actual removals (refer to Schedule I) 17F Indicate the excise tax due on actual removals (refer to Schedule I) 17I Indicate the excise tax due on actual removals (refer to Schedule I) 17L Indicate the excise tax due on actual removals (refer to Schedule I) 17Q Indicate the excise tax due on actual removals (refer to Schedule I) Total Excise Tax Due Add Items 17C, 17F, 17I, 17L and 17Q Balance Unapplied/(Overapplied) Item 16 minus Item 18 Penalties Additional penalties are imposed in the following cases: 20A 1) A surcharge of twenty five percent (25%) of the amount due is imposed in the following cases: a) Failure to file any return and pay the tax or installment due thereon on or before due date; b) Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is required to be filed; c) Failure to pay the full or partial amount of tax shown on the return, or the full amount of tax due for which no return is required to be filed on or before the due date; or d) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment. 2. A surcharge of fifty percent (50%) of the tax or of the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, for each of the following violations: a) Willful neglect to file the return within the period prescribed by the Code or by the rules and regulations; or b) In case of false or fraudulent return is willfully made. 20B. Interest for late payment is computed at twenty percent (20%) per annum from the date the payment is due up to the date of full payment based on the basic tax payable in Item 19 20C. Please do not fill up this portion. You will be properly notified if any compromise penalty will be imposed. 20D. To get the total penalties, add Items 20A to 20C
Item 18. Item 19. Item 20.
Item 21. Item 22.
Balance Unapplied/(Deficiency) To get this, deduct Item 20D from Item 20 Payment Made Today Indicate payment made per this return
Item 23.
Balance to be Applied Against Subsequent Removals To get this, add Items 21 and 22 Schedule I - Excise Tax Due on Actual Removals of Non-Essential Products Chargeable Against Payments Column 1 - Refer to Applicable Alphanumeric Tax Code Column 2 - Refer to Description of the Product/Articles Subject to Excise Tax Column 3 - Refer to unit of measurement Column 4 - Refer to Applicable Excise Tax Rate Column 5 - Refer to Applicable Tax Base of the Products/Articles Column 6 - Refer to Excise Tax Due (Excise Tax Rate x Tax Base )
BIR Form 2200-M Excise Tax Return for Mineral Products NOTES: a) Computation of tax and explanations thereto are based On the items/numbers provided in the above mentioned Form b) Items 1 to 14 refer to the background information of the taxpayer c) Item 15 refers to manner of payment Item 16. Unapplied Payment per Immediately Preceding Return Indicate the balance of advanced payment per return prior to this return Item 17. Excise Tax Due on Actual Removals/Application 17A to 17B Indicate the inclusive date of removal 17D to 17E Indicate the inclusive date of removal 17G to 17H Indicate the inclusive date of removal 17J to 17K Indicate the inclusive date of removal 17M to 17N Indicate the inclusive date of removal 17C Indicate the excise tax due on actual removals (refer to Schedule I) 17F Indicate the excise tax due on actual removals (refer to Schedule I) 17I Indicate the excise tax due on actual removals (refer to Schedule I) 17L Indicate the excise tax due on actual removals (refer to Schedule I) 17Q Indicate the excise tax due on actual removals (refer to Schedule I) Total Excise Tax Due Add Items 17C, 17F, 17I, 17L and 17Q Balance Unapplied/(Overapplied) Item 16 minus Item 18 Penalties Additional Penalties Additional penalties are imposed in the following cases: 20A 1) A surcharge of twenty five percent (25%) of the amount due is imposed in the following cases: a) Failure to file any return and pay the tax or installment due thereon on or before due date; b) Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is required to be filed; c) Failure to pay the full or partial amount of tax shown on thereturn, or the full amount of tax due for which no return is required to be filed on or before the due date; or d) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment. 2. A surcharge of fifty percent (50%) of the tax or of the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, for each of the following violations:a) Willful neglect to file the return within the period prescribed by the Code
or by the rules and regulations; orb) In case a false or fraudulent return is willfully made. 20B. Interest for late payment is computed at twenty percent (20%) per annum from the date the payment is due up to the date of full payment based on the basic tax payable in Item 19 20C. Please do not fill up this portion. You will be properly notified if any compromise penalty will be imposed. 20D. To get the total penalties, add Items 20A to 20C Balance Unapplied/(Deficiency) To get this, deduct Item 20D from Item 20 Payment Made Today Indicate payment made per this return Balance to be Applied Against Subsequent Removals To get this, add Items 21 and 22 Schedule I - Excise Tax Due on Actual Removals of Mineral Products Chargeable Against Payments Column I - Refer to Applicable Alphanumeric Tax Code Column 2 - Refer to Description of the Product/Articles Subject to Excise Tax Column 3 - Refer to Unit of Measurement Column 4 - Refer to Applicable Excise Tax Rate Column 5 - Refer to Applicable Tax Base of the Products/Articles Column 6 - Refer to Excise Tax Due (Excise Tax Rate x Tax Base ) BIR Form 2200-P Excise Tax Return for Petroleum Products NOTES: a) Computation of tax and explanations thereto are based on the items/numbers provided in the abovementioned form b) Items 1 to 14 refer to the background information of the taxpayer c) Item 15 refers to manner of payment Item 16. Item 17. Unapplied Payment per Immediately Preceding Return Indicate the balance of advanced payment per return prior to this return Excise Tax Due on Actual Removals/application 17A to 17B Indicate the inclusive date of removal 17D to 17E Indicate the inclusive date of removal 17G to 17H Indicate the inclusive date of removal 17J to 17K Indicate the inclusive date of removal 17M to 17N Indicate the inclusive date of removal 17C Indicate the excise tax due on actual removals (refer to Schedule I) 17F Indicate the excise tax due on actual removals (refer to Schedule I) 17I Indicate the excise tax due on actual removals (refer to Schedule I) 17L Indicate the excise tax due on actual removals (refer to Schedule I) 17Q Indicate the excise tax due on actual removals (refer to Schedule I) Total Excise Tax Due Add Items 17C, 17F, 17I, 17L and 17Q Balance Unapplied/(Overapplied) Item 16 minus Item 18
Item 18. Item 19.
Items 20.
Penalties Additional penalties are imposed in the following cases: 20 A 1) A surcharge of twenty five percent (25%) of the amount due is imposed in the following cases: a) Failure to file any return and pay the tax or installment due thereon on or before due date; b) Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is required to be filed; c) Failure to pay the full or partial amount of tax shown on the Return, or the full amount of tax due for which no return is required to be filed on or before the due date; or d) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment. 2) A surcharge of fifty percent (50%) of the tax or of the deficiency tax, in caseAny payment has been made on the basis of such return before the Discovery of the falsity or fraud, for each of the following violations: a) Willful neglect to file the return within the period prescribed by theCode or by the rules and regulations; or b) In case a false or fraudulent return is willfully made. 20B. Interest for late payment is computed at twenty percent (20%) per annum from the date the payment is due up to the date of full payment based on the basic tax payable in Item 19 20C. Please do not fill up this portion. You will be properly notified if any compromise penalty will be imposed. 20D. To get the total penalties, add Items 20A to 20C
Balance Unapplied/(Deficiency) To get this, deduct Item 20D from Item 20 Payment Made Today Indicate payment made per this return Balance to be Applied Against Subsequent Removals To get this, add Items 21 and 22 Schedule I Excise Tax Due on Actual Removals of Petroleum Products Chargeable Against Payments Column I - Refer to Applicable Alphanumeric Tax Code Column 2 - Refer to Description of the Product/Articles Subject to Excise Tax Column 3 - Refer to Unit of Measurement Column 4 - Refer to Applicable Excise Tax Rate Column 5 - Refer to Applicable Tax Base of the Products/Articles Column 6 - Refer to Excise Tax Due (Excise Tax Rate x Tax Base )
BIR Form 2200-T Excise Tax Return for Tobacco Products NOTES: a) Computation of tax and explanations thereto are based On the items/numbers provided in the abovementioned Form b) Items 1 to 14 refer to the background information of the taxpayer c) Item 15 refers to manner of payment
Item 16. Item 17.
Unapplied Payment per Immediately Preceding Return Indicate the balance of advanced payment per return prior to this return Excise Tax Due on Actual Removals/application 17A to 17B Indicate the inclusive date of removal 17D to 17E Indicate the inclusive date of removal 17G to 17H Indicate the inclusive date of removal 17J to 17K Indicate the inclusive date of removal 17M to 17N Indicate the inclusive date of removal 17C Indicate the excise tax due on actual removals (refer to Schedule I) 17F Indicate the excise tax due on actual removals (refer to Schedule I) 17I Indicate the excise tax due on actual removals (refer to Schedule I) 17L Indicate the excise tax due on actual removals (refer to Schedule I) 17Q Indicate the excise tax due on actual removals (refer to Schedule I) Total Excise Tax Due Add Items 17C, 17F, 17I, 17L and 17Q Balance Unapplied/(Overapplied) Item 16 minus Item 18 Penalties Additional penalties are imposed in the following cases: 20A 1) A surcharge of twenty five percent (25%) of the amount due is imposed in the following cases: a) Failure to file any return and pay the tax or installment due thereon on or before due date; b) Unless otherwise authorized by the Commissioner, filing a return with a person or office other than those with whom it is required to be filed; c) Failure to pay the full or partial amount of tax shown on the return,or the full amount of tax due for which no return Is required to be filed on or before the due date; or d) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment. 2) A surcharge of fifty (50%) percent of the tax or of the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, for each of the following violations: a) Willful neglect to file the return within the period prescribed by the Code or by the rules and regulations; or b) In case a false or fraudulent return is willfully made. 20B. Interest for late payment is computed at twenty percent (20%) per annum from the date the payment is due up to the date of full payment based on the basic tax payable in Item 19 20C. Please do not fill up this portion. You will be properly notified if any compromise penalty will be imposed. 20D. To get the total penalties, add Items 20A to 20C
Item 18.
Item 19.
Item 20.
Item 21. Item 22.
Balance Unapplied/(Deficiency) To get this, deduct Item 20D from Item 20 Payment Made Today Indicate payment made per this return
Item 23.
Balance to be Applied Against Subsequent Removals To get this, add Items 21 and 22 Schedule I Excise Tax Due on Actual Removals of Tobacco Products Chargeable Against Payments Column I - Refer to Applicable Alphanumeric Tax Code Column 2 - Refer to Description of the Product/Articles Subject to Excise Tax Column 3 - Refer to Unit of Measurement Column 4 - Refer to Applicable Excise Tax Rate Column 5 - Refer to Applicable Tax Base of the Products/Articles Column 6 - Refer to Excise Tax Due (Excise Tax Rate x Tax Base )
Tax Tables BIR Form 2200-A Alcohol Products DISTILLED SPIRITS ATC XA010 XA020 XA031 Description Produced from sap of coconut, nipa, cassava, camote, buri palm or sugarcane Product in a pot still by small distillers (up to 100 liters/day and 50% alcohol volume) Produced from raw materials other than aboveNet Retail Price per bottle of 750 ml volume capacity (excluding VAT and Excise Tax) is less than P250.00 Net Retail Price per bottle of 750 ml volume capacity (excluding VAT and Excise Tax) is P250.00 up to P675.00 Net Retail Price per bottle of 750 ml volume capacity (excluding VAT andExcise Tax) is more than P675.00 Medicinal preparations, flavoring extracts and all other preparations, except toilet preparations, of which, excluding water, distilled spirits form the chief ingredient Tax Rate P 8.96 P 4.48 Tax Base Proof Liter Proof Liter
P 84.00 Proof Liter P168.00 Proof Liter P338.00 Proof Liter
XA032 XA033 XA040
WINES Sparkling Wines/Champagne, regardless of proof ATC XA061 XA062 XA070 XA080 XA090 Description Tax Rate Tax Base Per Liter Per Liter Per Liter Per Liter Proof Liter
Net Retail Price per bottle (excluding VAT and Excise Tax) P112.00 is P500.00 or less Net Retail Price per bottle (excluding VAT andExcise Tax) is more than P500.00 Still wines containing 14% or less alcohol Still wines containing over 14% but not over 25% alcohol Fortified wines containing more than 25% alcohol by volume (taxed as distilled spirits) P336.00 P 13.44 P 26.88
FERMENTED LIQUORS
Beer, lager beer, ale, porter and other fermented liquors ATC XA051 XA052 XA053 Description Tax Rate Tax Base Per Liter Per Liter Per Liter
Net Retail Price per liter (excluding VAT and Excise Tax) is P 6.89 less than P14.50 Net Retail Price per liter (excluding VAT and Excise Tax) is P 10.25 less than P14.50 Net Retail Price per liter (excluding VAT and Excise Tax) is P 13.61 less than P14.50
BIR Form 2200-AN Non-Essential Products AUTOMOBILE - Per Engine Displacement Gasoline ATC XG020 XG030 XG040 XG050 Description Up to 1600 cc Up to 2000 cc Up to 2700 cc 2701 cc or over Tax Rate Tax Base 15% 35% 50% 100% Manufacturer's or Importers Selling Price* Manufacturer's or Importers Selling Price* Manufacturer's or Importers Selling Price* Manufacturer's or Importers Selling Price*
* Note : Manufacturer's or Importers Selling Price* excludes VAT and Excise Tax AUTOMOBILE - Per Engine Displacement Diesel ATC XG060 XG070 XG080 XG090 Description Up to 1800 cc Up to 2300 cc Up to 3000 cc 3001 cc or over Tax Rate Tax Base 15% 35% 50% 100% Manufacturer's or Importers Selling Price* Manufacturer's or Importers Selling Price* Manufacturer's or Importers Selling Price* Manufacturer's or Importers Selling Price*
* Note : Manufacturer's or Importers Selling Price* excludes VAT and Excise Tax Non-Essential Products
ATC XG100 XG110 XG120
Description Jewelry, pearls, precious and semiprecious, whether real or imitation Perfumes and Toilet Waters Yachts and other Vessels for Pleasure or Sports
Tax Rate Tax Base 20% 20% 20% Wholesale PriceOr Value of Importations* Wholesale PriceOr Value of Importations* Wholesale PriceOr Value of Importations*
*Note: Wholesale Price or Value of Importation excludes VAT and Excise Tax BIR Form 2200-M Mineral Products ATC Description Tax Rate Tax Base Actual Market Value of gross Output Value of Importation Actual Market Value of gross Output Value of Importation Actual Market Value of gross Output Value of Importation Fair International price Actual Market Value of gross Output Per metric ton
XM020 Non-metallic minerals and quarry resources a) Locally extracted or produced 2% b) Imported XM030 Gold and Chromite a) Locally extracted or produced b) Imported XM040 Copper a) Locally extracted or produced b) Imported XM050 Indigenous Petroleum XM051 Natural Gas or Liquefied Natural Gas (locally extracted) XM101 Coal and Coke 2% 2% 2% 2% 2% 3% 2% P10.00
BIR Form 2200-P Petroleum Products
ATC XP010 XP020 XP030 XP040 XP050 XP060 XP070 XP080 XP090 XP100 XP110 XP120 XP130 XP131 XP140 XP150 XP160 XP170 XP180 XP190
Description Lubricating Oils Greases Processed Gas Waxes and Petrolatum Denatured alcohol used for motive power Unleaded Premium Gasoline Leaded Premium Gasoline Regular Gasoline Naptha Naptha to be used for petro-chemicals Aviation Gasoline Aviation Turbo Jet Fuel Kerosene Kerosene used as aviation fuel Diesel Fuel Oil LPG used as Motive Power Liquefied petroleum gas Asphalt Bunker Fuel Oil and similar fuel Base stocks for lub, oils and greases, HVD, aromatic extracts, etc
Tax Rate Tax Base P 4.50 P 4.50 P 0.05 P 3.50 P 0.05 P 4.35 P 5.35 P 4.80 P 4.80 P 0.00 P 4.80 P 3.67 P 0.60 P 3.67 P 1.63 P 1.63 P 0.00 P 0.56 P 0.30 P 4.50 Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter Per Liter or Kg
BIR Form 2200-T Tobacco Products
ATC XT010
Description Smoking tobacco and other partially manufactured tobacco, except cigars and cigarettes Chewing tobacco Cigars Cigarettes packed by hand Cigarettes packed by machines
Tax Rate Tax Base P 0.75 Per kilo
XT020 XT030 XT040
P 0.60 P 1.12 P 0.40
Per kilo Per cigar Per pack
XT050 XT060 XT070 XT130
Net Retail Price (excluding VAT & Excise) exceeds P 10.00 per pack
P13.44
Per pack Per pack Per pack Per pack
Net Retail Price (excluding VAT & Excise) is P 8.96 P6.51 up to P 10.00 per pack Net Retail Price (excluding VAT & Excise) is P 5.60 P 5.00 up to P 6.50 per pack Net Retail Price (excluding VAT & Excise) is P 1.12 below P 5.00 per pack Tobacco Inspection Fees
XT080 XT090 XT100 XT110
a) For Cigars b) For Cigarettes c) For leaf tobacco d) For scraps and other manufactured tobacco products
P 0.50 P 0.10 P 0.02 P 0.03
Per 1000 pcs. or fraction thereof Per 1000 pcs. Or fraction thereof Per kilo or fraction thereof Per kilo or fraction thereof
Tax Deadlines For all Excise Tax Returns (BIR Form 2200-A Excise Tax Return for Alcohol Products; BIR Form 2200-AN Excise Tax Return for Automobiles and Non-Essentials; BIR Form 2200-M Excise Tax Return for Mineral Products; BIR Form 2200-P Excise Tax Return for Petroleum Products and BIR Form 2200-T Excise Tax Return for Tobacco Products) Producer or manufacturer - Before removal from place of production Importer - Before removal from customs custody Person in possession of untaxed articles -Upon discovery (with penalties) Note: For each place of production, a separate return shall be filed. Identified excise taxpayers duly informed in writing as such by the Commissioner of Internal Revenue, or his duly authorized representative, shall file a consolidated excise tax return. For Transcript Sheets of Excise Taxpayers
BIR Form No. Tobacco Products 31.02
Description
Date of Submission
Transcript sheets of BIR Form No. 31.01 - record of On or before 8th day raw materials for manufacturers of any class of of the month tobacco products (L7) Transcript sheets of BIR Form No. 31.18 - Official Registry Book (ORB) used manufacturers of cigars Transcript sheets of BIR Form 31.27 - ORB used in removal and manufacturing Virginia cigarettes On or before 8th day of the month On or before 8th day of the month
31.19 31.28 31.47 38.02
Transcript sheets of BIR Form No. 31.46 -Auxiliary On or before 8th day Register Book (l-7/12) of the month Transcript sheets of BIR Form No. 38.01 - ORB used in cigarette paper On or before 8th day of the month
Leaf Tobacco 31.47 Transcript sheets of BIR Form No. 31.46 - ORB used in leaf tobacco received and removed On or before 8th day of the month
Alcohol Products 2.08A 2.12 Transcript sheets of BIR Form No. 2.08 - ORB used On or before 5th day in distilled spirits of the month Transcript sheets of BIR Form No. 2.11 - ORB used On or before 5th day for crude spirits (Single Account for small of the month distilleries) Transcript sheets of BIR Form No. 2.14 - ORB used On or before 5th day for rectified spirits (Single Account for small of the month distilleries) Transcript sheets of BIR Form No. 2.17 - ORB used On or before 5th day by compounders of liquors of the month Transcript sheets of BIR Form No. 2.17A - ORB used in imitation of wines A7-A On or before 5th day of the month
2.15
2.18 2.18A 2.21
Transcript sheets of BIR Form No. 2.20 - ORB used On or before 5th day by Alcohol Plants/Rectifiers in Sales Account {also of the month the ORB used in Compound Sales Account (for compounders)} Transcript sheets of BIR Form No. 2.36 - ORB for repackers of distilled spirits and wines On or before 5th day of the month
2.37 2.44 2.68A 2.69A 2.69-a A-19
Transcript sheets of BIR Form No. 2.43 - ORB used On or before 5th day in fermented liquors of the month Transcript sheets of BIR Form No. 2.68 - ORB used On or before 5th day by denaturer for denatured alcohol of the month Transcript sheets of BIR Form No. 2.69 - ORB used On or before 5th day by manufacturer of denatured alcohol of the month Transcript sheets of BIR Form No. 2.69A-19 - ORB On or before 5th day used by denaturer of alcohol motive power of the month
2.70-a 2.08A
Transcript sheets of BIR Form No. 2.70 - ORB used On or before 5th day by repackers of denatured alcohol of the month Transcript sheets of BIR Form No. 2.08 - ORB used On or before 5th day in distilled spirits (single account for small of the month distilleries)
Mineral Products 2223 Transcript sheets of BIR Form No. 2222 - ORB used On or before 10th in mineral products day of the month
Petroleum Products 2.83A Transcript sheets of BIR Form No. 2.83 - ORB used On or before 8th day by manufacturer of lubricating oil (for blended of the month manufactured lube oil) Transcript sheets of BIR Form No. 2.61 - ORB used On or before 8th day in oil manufacturing operations of the month
2.61T
Automobiles Transcript sheets of ORB - used by importers, manufacturers/assemblers and wholesalers of automobiles On or before 8th day of the month
Other Documents On Automobiles Manufacturer's/producer's/importer's sworn statements On Jewelry (for Qualified Jewelry Enterprises under RA 8502) Manufacturer's/producer's/importer's sworn statements Every January 15 and July 15 of each year On or before the end of each calendar semester
On Minerals and Mineral Product Sworn statement by every lessee, concessionaire, owner or operator of mines or quarry, processor of minerals, producer or manufacturer of mineral products Excise Tax Returns (Form No. 2200) to be filed by producers or manufacturer of metallic minerals and mineral products who posted a surety bond for the purpose of filing and payment of excise tax on a quarterly basis. On Fermented Liquor Brewers' or importers' sworn statement of the volume of sales of each particular brand of fermented liquor On Tobacco Products Manufacturer's and importers' sworn statement of the Within the first five volume of sales of each particular brand of cigars (5) days of every and/or cigarettes sold. month Manufacturer's sworn statement to be filed by manufacturers of cigarettes, cigars and other products of tobacco On or before the tenth (10th) day of the month Within the first five (5) days of every month On or before the last working day of January of each year and every six months thereafter Within fifteen (15) days after the end of each calendar quarter
Tax Forms BIR Form 2200-A Excise Tax Return for Alcohol Products BIR Form 2200-AN Excise Tax Return for Automobiles and Non-Essentials BIR Form 2200-M Excise Tax Return for Mineral Products BIR Form 2200-P Excise Tax Return for Petroleum Products BIR Form 2200-T Excise Tax Return for Tobacco Products Related Revenue Issuances Revenue Regulation No. 14-97, 14-99, 17-99 and 2-2000 Frequently Asked Questions
What are the kinds of Excise Taxes? Specific Tax - Excise taxes imposed on goods or articles based on weight or volume capacity or any other physical unit of measurements. Ex. Greases - per kilogram Leaded premium gasoline - per liter Ad Valorem Tax - Excise taxes imposed on goods or articles based on selling price or other specified value of the goods. Ex. Fermented Liquor - net retail price Automobiles - manufacturer's or importer's selling price What goods/articles are subject to Excise Tax? Alcohol Products Distilled Spirits (produced from sap of nipa, coconut, cassava, camote, buri palm or sugarcane and other raw materials) Wines (sparkling wine, champagne, still wines, fortified wines) Fermented Liquors ( beer, lager beer, ale, porter, and other fermented liquors except tuba, basi, tapuy and similar fermented liquors) Automobiles ( whether engine or gasoline fed , 1600 cc up to over 3001 cc engine displacement) Non Essential Products Jewelry, pearls, precious and semi-precious, whether real or immitation Perfumes and toilet waters Yachts and other vessels for pleasure or sports Mineral products Non-metallic minerals or quarry resources Gold and Chromite Copper
Indigenous Petroleum Natural Gas or Liquefied Natural Gas (locally extracted) Coal and Coke Petroleum Products Lubricating Oils Greases Processed Gas Waxes and Petrolatum Denatured alcohol used for motive power Unleaded Premium Gasoline Leaded Premium Gasoline Regular Gasoline Naptha Aviation Gasoline Aviation Turbo Jet Fuel Kerosene Diesel Fuel Oil Liquefied Petroleum Gas (LPG) Asphalt Bunker Fuel Oil and similar fuel Base stocks for lube, oils and greases, HVD, aromatic, extracts Tobacco Products Smoking tobacco and other partially manufactured tobacco except cigar and cigarette Chewing tobacco Cigars Cigarettes, whether packed by hand or by machine Tobacco Inspection Fees Who are required to register with the BIR? For Alcohol Products Any person or entity may engage in business as distiller, manufacturer, producer, repacker, denaturer, wholesale dealer, or importer of distilled spirits and wines and must be duly registered with the Bureau of Internal Revenue as such. For Fermented Liquor Any person or entity may engage in business as brewer, operator of micro- brewery or micro brew pub, wholesale dealer, wholesale peddler or importer and must be duly registered with the Bureau of Internal Revenue as such. For Tobacco Products Any person or entity who wants to engage in manufacturing, importing or selling at wholesale cigar and cigarettes, smoking and chewing tobacco and other manufactured tobacco and tobacco products must first secure the necessary permit to operate as such from the Commissioner of Internal Revenue. For Petroleum Products Any person or entity desiring to engage in business as manufacturer, importer or repacker of
petroleum products should apply in writing with the Commissioner, through the Revenue District Officer having jurisdiction over his place of production, by filing application for registration. For Minerals and Mineral Products On Locally extracted Minerals, mineral products and quarry resources All lessees, concessionaires, owners or operators of mines, processors of minerals, licensees or permittees of quarry/mines, producers or manufacturers of mineral products, whether natural or juridical persons must register with the Bureau of Internal Revenue. For Automobiles Any person or entity desiring to engage in business as manufacturer/assembler importer of automobiles for resale should apply in writing with the Commissioner of Internal Revenue, through the Revenue District Officer having jurisdiction over his place of production, by filing application for registration (1901 or 1903) as the case may be. For Non-Essential Goods Any person or entity who wants to engage in the business as manufacturer or importer of nonessential goods must first secure the necessary permit to operate as such from the Commissioner of Internal Revenue. Who are required to file Excise Tax Return? BIR Form 2200-A Excise Tax Return for Alcohol Products Manufacturer or producer of locally manufactured or produced alcohol products Owner or person having possession of the alcohol products which were removed from the place of production without the payment of excise tax Importers of alcohol products BIR Form 2200-AN Excise Tax Return for Automobiles and Non-Essentials Products Manufacturer, producer or assembler of locally manufactured products/ assembled automobiles Manufacturer or producer of locally manufactured or produced jewelries, perfumes, toilet water, yachts, and other vessels intended for pleasure or sports (non-essentials) Buyer or transferee of automobile not previously taxed and subsequently sold or transferred by the tax-exempt entity-seller Owner or person having possession of the above articles which were removed from the place of production without the payment of excise tax Importers of any of articles considered as automobiles and non-essentials
BIR Form 2200-M Excise Tax Return for Mineral Products Owner, lessee, concessionaire or operator of mining claims First buyer, purchaser or transferee for local sale, barter, transfer or exchange of indigenous petroleum, natural gas or liquefied natural gas Owner or person having possession of the mineral and mineral products which were mined, extracted or quarried without the payment of excise tax Importer of minerals and mineral products BIR Form 2200-P Excise Tax Return for Petroleum Products
Manufacturer or producer of locally manufactured or produced petroleum products Any person engaged in reprocessing, re-refining or recycling of petroleum products previously taxed Importer or purchaser who resells or uses kerosene as aviation fuel Any person using denatured alcohol for motive power Owner or person having possession of petroleum products which were removed from the place of production without the payment of excise tax Importer of petroleum products BIR Form 2200-T Excise Tax Return for Tobacco Products Manufacturer or producer of locally manufactured or produced tobacco products Wholesaler, manufacturer, producer, owner or operator of the redrying plant, as the case maybe, with respect to the payment of inspection fee on leaf tobacco, scrap, cigars, cigarettes and other tobacco products Owner or person having possession of tobacco products which were removed from the place of production without the payment of excise tax Importer of tobacco products What are the procedures in the filing of Excise Tax Returns? BIR Form 2200-A; 2200AN; 2200M; 2200P and 2200T - File in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) of the place where the taxpayer is registered or required to be registered. In places where there are no AABs, the return will be filed directly with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality wherein a person has his legal residence or principal place of business, or if there is none, with the office of the Commissioner Note: Identified excise taxpayers duly informed in writing as such by the Commissioner of Internal Revenue, or his duly authorized representatives, will file a consolidated Excise Tax Return and pay the Excise Tax due with the Authorized Agent Bank located in the BIR National Office, Diliman, Quezon City. What do the following words/phrases mean? For Excise Tax purposes, the following words and phrases shall mean: For Distilled Spirits Distilled Spirits or Spirits - refer to the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilutions, purification and mixture thereof from whatever source by whatever process produced and shall include whisky, brandy, rum, gin, vodka and other similar products or mixtures. Whisky - an alcoholic distillate from cereals such as rye, corn barkley malt and wheat. Brandy - a distillate or a mixture of distillates obtained solely from fermented juice or mash of fruits. Rum - distilled alcohol beverages prepared by fermentation, distillation and aging of sugar cane products (i.e. sugar cane juices, molasses). Gin - an alcoholic liquid obtained by redistilling pure spirits over juniper berries and other aromatics, such as orange and lemon peels, sweet almond and cinnamon barks, etc. Vodka - spirit obtained from potato by distillation. Compounded Liquor - refers to any intoxicating beverages produced by the mixture of distilled spirits with other substances such as flavoring extracts or essences, coloring materials, water, juice, or any kind of liquor, wine or other ingredient. Denatured Alcohol - refers to ethyl alcohol mixed with denaturing materials or substances to render such alcohol unfit for human consumption or oral intake. Duly registered or existing brands of alcohol products - refer to existing or active brands of alcohol products that are duly registered with the BIR prior to January 1, 1997. Fortified wines - refer to natural wines to which distilled spirits are added to increase their alcohol strength. Gauge Liter (GL) - refers to the actual volume of the liquor measured express in liter
consisting of 1,000 milliliters (ml.) or 1,000 cubic centimeter (cc). Liquor - refers to a generic term embracing all intoxicating drinks or alcoholic beverages. Medicinal Preparations - refer to distilled spirits or substances prepared as a medicine for curing, alleviating or palliating or preventing some disease or infection of the human body. Metro Manila and Regions - refer to the political sub-divisions of Metro Manila and other Regions as provided for by the Local Government Code. Net Retail Price - refers to the price at which alcohol products are sold on retail excluding the excise tax and value added tax imposed on such products. Current Net Retail Price - the net retail price at which the distilled spirits and wines are sold on retail in ten (10) major supermarkets or retail outlets in Metro Manila are marketed nationally; and for brands which are marketed outside Metro Manila, the price at which the same are sold on retail in five (5) major super markets or retail outlets in the region. Suggested Net Retail Price - the net retail price at which new brands of locally manufactured or imported distilled spirits and wines are intended by manufacturer or importer to be sold on retail in major supermarkets or retail outlets in Metro Manila (for those marketed nationwide), and in other regions (for those with regional markets). New Brands - refer to any brand of distilled spirits and wines introduced in the market on or after January 1, 1997, and shall include previously registered but inactive brands of distilled spirits and wines. Proof Liter - refers to equivalent in a liter of proof spirits of the liquor measured. Proof spirits - refer to liquor containing fifty percent (50%) alcohol by its volume with a specific gravity of seven thousand nine hundred thirty nine ten thousandth (0.7939) at fifteen degrees centigrade (15C). Rectified Alcohol - refers to ethyl alcohol that has undergone refining, purifications through distillation by fractional or repeated distillations. Sparkling Wine - refers to an effervescent table wine which is carbonated by either secondary fermentation or carbonation usually white but occasionally red in color, containing an average of 12% alcohol by volume which is carbonated by secondary fermentation. This includes champagne. Still wine - refers to a wine that is not effervescent (bubbling) or wine that is not carbonated and bottled after fermentation has been completed. Variant of Brands - refers to any brand of alcohol products on which a modifier is prefixed and/or suffixed to the root name of a brand and/or different brand which carries the same logo or design of the existing branch, such as the following: Modifier is Prefixed - Example: A registered existing "ABC" brand manufactured as "Premium ABC" or "Top ABC" Modifier is Suffixed - Example: A registered existing "ABC" brand manufactured as " ABC Dry" or "ABC Supreme" A different branch which carries the same logo or design of the existing brand - Example: A registered existing "ABC" brand carrying the logo, badge, emblem, or mark in the shape of horseshoe is manufactured as "XYZ" brand carrying the same shape of horseshoe logo, badge, emblem or mark or a registered and existing "XYS" brand carrying two (2) horizontal stripes with red and white colors is manufactured as a new "ABC" brand carrying the same set of stripes and colors Volume of Sales - refer to the total quantity or volume of removals of distilled spirits and wines sold to wholesaler or retail customers. Wines - refer to all alcoholic beverages produced by fermentation without distillation from the juice of any kind of fruit. Primary Raw Materials - refer to the major or primary parts or components used in the production of the finished product. Place of Production - refers to an area designated by a manufacturer as depicted in the factory plot and plan submitted to and approved by the Commissioner of Internal Revenue or his duly authorized representative wherein the process of producing or manufacturing distilled spirits and wines are done until the same shall have been produced and ready for sale. Toilet Preparations - refer to scented alcoholic or non-alcoholic preparations primarily used as
body fragrance containing essential oils. This includes perfumes and toilet waters which are considered non-essential articles subject to Excise Tax under Section 150 of the Tax Code. For Fermented Liquor Fermented Liquor - brewed preparations from infusion of grains that have undergone sprouting (malting) and the fermenting of the sugar solution by yeast into alcohol and carbon dioxide such as beer, lager beer, ale, porter and other fermented liquor such as draft beer, and other similar products. Lager Beer - stored beer which is rather high in alcohol content. Ale - pale in color, tart in taste, high in alcohol content and contains more hops than beer. Porter - dark ale, high in extract and sweeter than the usual ale in taste. The flavor of the hops is less distinct than that in normal ale. Basi - an alcoholic beverage produced by the fermentation of sugar cane juice with usual alcohol content from 8% to 14% in accordance with variety, maturity of the cane and other conditions. Tapuy - fermented wine from rice. Tuba - a product of natural fermentation of unfermented coconut palm juice or toddy. Manufacturer - refers to natural or juridical persons engaged in the production and/or persons for whom fermented liquor is produced. Owner/Possessor - refers to natural or juridical persons who owned and/or in possession of the goods. (In case of Imported Fermented Liquor, owner/ possessor means the importer and/or consignee designated in the bill of lading, or the person to whom the bill of lading has been duly assigned or indorsed. In short, the importer is the owner of the goods at the time of withdrawal thereof from the custom house.) Gauge Liter (GL) - refers to the actual volume of the liquor measured expressed in liter consisting of 1,000 milliliters (ml.) or 1,000 cubic centimeter (cc). Wholesale Dealer - embraces every person who, for himself or on commission, sells or offers for sale foreign or domestic fermented liquors in large quantities of more than five liters at any one time, or who, for himself or on commission, sells or offers for sale foreign or domestic fermented liquors to other persons for the purpose of resale, irrespective of the quantity of the fermented liquors sold. Retail Dealer - includes every person except retail dealers in tuba, basi and tapuy, who for himself or on commission sells or offers for sale foreign or domestic fermented liquors in quantities of five liters or less at any one time and not for sale. Wholesale Peddler - includes every person who either, for himself or on commission, travels from place to place in town or country and sells or offers for sale and delivery foreign or domestic fermented liquors in large quantities of more than five liters at any time, or who, for himself or on commission, sells or offers for sale and delivery foreign or domestic fermented liquors to other person for purposes of resale, irrespective of the quantity of the fermented liquors sold. Retail Peddler - embraces every person either for himself or on commission who travels from place to place in town or country and sells or offers for sale and delivery foreign or domestic fermented liquors in quantities of vie liters or less any one time and not for resale. Duly registered or existing brands - refer to existing or active brands of fermented liquors that are duly registered with the BIR prior to January 1, 1997. Metro Manila and Regions - refer to the political sub-divisions of Metro Manila and other Regions as provided for by the Local Government Code. Net Retail Price - refers to the price at which alcohol products are sold on retail excluding the Excise Tax and Value-Added Tax imposed on such products. Current Net Retail Price - the net retail price at which the fermented liquors are sold in retail in twenty (20) major supermarkets or retail outlets in Metro Manila which are marketed nationally, and for brands which are marketed outside Metro Manila, the price at which it is sold on retail in five (5) major super markets or retail outlets in the region. Suggested Net Retail Price - the net retail price at which new brands of locally-manufactured or imported fermented liquors are intended by manufacturer or importer to be sold on retail in
major supermarkets or retail outlets in Metro Manila (for those marketed nationwide), and in other regions (for those with regional markets). New Brands - refer to any brand of distilled spirits and wines introduced in the market on or after January 1, 1997 which include previously registered but inactive brands of fermented liquors. Variant of Brands - refers to any brand on which a modifier is prefixed and/or suffixed to the root name of a brand and/or different brand which carries the same logo or design of the existing branch, such as the following: Modifier is Prefixed - Example: A registered existing "ABC" brand manufactured as "Premium ABC" or "Top ABC" Modifier is Suffixed - Example: A registered existing "ABC" brand manufactured as " ABC Dry" or "ABC Supreme". A different branch which carries the same logo or design of the existing brand - Example: A registered existing "ABC" brand carrying the logo, badge, emblem, or mark in the shape of horseshoe is manufactured as "XYZ" brand carrying the same shape of horseshoe logo, badge, emblem or mark or a registered and existing "XYS" brand carrying two (2) horizontal stripes with red and white colors is manufactured as a new "ABC" brand carrying the same set of stripes and colors Volume of Sales - refer to the total quantity or volume of removals of distilled spirits and wines sold to wholesaler or retail customers. Removal From the Place of Production - removal from the company premises as indicated in the approved plot and plan where the brewery is located. Brewer - includes all persons who manufacture or reconstitute fermented liquors of any description for sale or delivery to others, but does not include manufacturers of tuba, basi, or tapuy or similar domestic fermented liquors. Micro-Brewery - a beer production facility smaller than the regular brewery equipped with fermentation and brewing tanks capable of producing beer from malt, hops and other ingredients. Its production output are sold to customers either in bottles, cans or placed in keg barrels. Micro-Brew Pub- a delineated area in a Pub House equipped with beer production facilities such as fermentation and brew tanks capable of producing beer directly from raw malt, hops and other ingredients, which are sold directly to the customers through a dispenser connected directly to the sales counter. Brand of Product - a name or trademark used to identify a product or group of products of a particular manufacturer and duly registered with the BIR. For Tobacco Products Bar Code - symbol consisting of article numbers represented by a machine readable print to define its specifications. The bar code consists of a series of light and dark parallel "bars". Chewing tobacco - all treated cake or pressed flattened tobacco intended for chewing only. Cigarette paper - any paper of whatever color, brand, texture, length, breath in bobbins or rolls used or intended to be used in the manufacture of cigarettes, but does not include paper cut into convenient sizes, ion ads or booklets or similar forms intended to be used for making cigarette by the hand. Cigarettes - all rolls of tobacco or any substitute therefor, wrapped with cigarette paper. Cigars - all rolls of tobacco or any substitute therefor wrapped with tobacco. Duly registered or existing brands - refer to existing or active brands of cigarettes that are duly registered with the BIR prior to January 1, 1997. Fuson stamp - means a custom-printed multi-colored decal heat-fused to the receiving surface, such as cellophane or polypropylene of each cigar and cigarette package. Importer - any person bringing in from a foreign country cigars, cigarettes and other tobacco products which are intended for sale, for personal use or for use in business. Leaf tobacco - means a whole leaf of tobacco or leaf tobacco in its complete form. Manufactured products of tobacco - include cigars, cigarettes, smoking tobacco, chewing tobacco, snuff and all other forms of manufactured products of tobacco. Manufacturer of tobacco products - every person whose business is to manufacture tobacco
products or snuff or one who employs others to manufacture tobacco products or snuff in its behalf, whether such manufacture is by cutting, pressing (not balancing), grinding, or rubbing (grating) any raw or leaf tobacco or otherwise preparing raw or leaf tobacco, or manufactured tobacco and snuff, or putting up for consumption scraps, refuse or stems of tobacco resulting from any process of handling tobacco stems, scraps, clippings or waste by sifting, twisting, screening or by any other process. Net Retail Price - refers to the price at which cigarettes are sold excluding the Excise Tax and Value-Added Tax imposed on such products. Current Net Retail Price - the net retail price at which the cigarettes are sold in retail in twenty (20) major supermarkets or retail outlets in Metro Manila which are marketed nationally; and for brands which are marketed only outside Metro Manila, the price at which it is sold on retail in five (5) major super markets or retail outlets in the region. Suggested Net Retail Price - the net retail price at which new brands of locally manufactured or imported cigarettes are intended by manufacturer or importer to be sold on retail in major supermarkets or retail outlets in Metro Manila (for those marketed nationwide), and in other regions (for those with regional markets). Partially manufactured tobacco shall include the following: Stemmed leaf (standard) - hand stripped tobacco of clean, good unbroken leaf only, free from mold and dust. Long filer (standard) - hand stripped tobacco or good long pieces of broken leaf usable as filler for cigars without further preparation and free from mold, dust, stems and cigar cuttings Short filer (standard) - hand stripped or machine stripped tobacco clean good short pieces or broken leaf which will not pass through a screen of two- inch (2") mesh. Cigar-cuttings - cuttings or clippings from cigars, unmixed with any other form of tobacco. Machine-scrap tobacco - machine threshed clean good tobacco not included in any of the above terms usable in the manufacture of products. Stem - midribs of leaf tobacco. Waste tobacco - fine cut shorts, scraps, refuse, powder, or dust, or sweeping of tobacco unfit for human consumption or discarded materials in the manufacture of tobacco products and manufactured products of tobacco, which may include stems. Smoking tobacco - any fine or rough-cut tobacco not rolled or wrapped and ready for smoking Snuff tobacco - any specially prepared powdered tobacco Stemmed leaf tobacco - means leaf tobacco which has had the stem or midrib removed. The term does not include broken leaf tobacco. Tobacco products - raw or leaf tobacco that has undergone processing such as pressing and drying without distorting its original form and partially manufactured tobacco. It shall also include recycled or homogenized tobacco ready for use as raw materials in the production of cigars, cigarettes and other manufactured products of tobacco. Variant of Brands - refers to any brand on which a modifier is prefixed and/or suffixed to the root name of a brand and/or different brand which carries the same logo or design of the existing brand such as the following: Modifier is Prefixed - Example: A registered existing "ABC" brand manufactured as "Premium ABC" or "Top ABC" Modifier is Suffixed - Example: A registered existing "ABC" brand manufactured as " ABC Dry" or "ABC Supreme" A different branch which carries the same logo or design of the existing brand - Example: A registered existing "ABC" brand carrying the logo, badge, emblem, or mark in the shape of horseshoe is manufactured as "XYZ" brand carrying the same shape of horseshoe logo, badge, emblem or mark or a registered and existing "XYS" brand carrying two (2) horizontal stripes with red and white colors is manufactured as a new "ABC" brand carrying the same set of stripes and colors
Volume of Sales - means the volume and value of sales per brand locally manufactured or imported cigars and cigarettes that are sold, transferred or exchanged by manufacturers or importers of such articles to wholesalers, dealers or consumers. Wholesale dealer of manufactured tobacco products - refer to a person who, for himself, sells or offers for sale, cigars, cigarettes or other manufactured tobacco products in quantities of not less than two hundred (200) cigars, eight hundred (800) sticks of cigarettes or five (5) kilos of manufactured tobacco at any one time or who sells or offers the same for the purpose of resale, regardless of quantity. For Petroleum Products Petroleum Products - products formed in the course of refining crude petroleum through distillation, cracking, solvent refining and chemical treatment coming out as refinery stocks from the refinery such as but not limited to LPG, Naptha, gasoline, solvent, kerosene, aviation fuels, diesel oils, fuel oils, waxes and petrolatums, asphalts, bitumens, coke and refinery sludges, or such refinery petroleum fractions which have not undergone any process or treatment as to produce separate chemically-defined compounds in a pure or commercially pure state and to which various substances may have been added to make them suitable for particular uses; Provided, that the resultant product contains not less than fifty percent (50%) by weight of such petroleum products. Repacker - one who regularly buys petroleum products in bulk or in original containers and transfers or places them into small containers "as is" for resale, without undergoing any processing, alterations or changes in any manner. Reprocessing - synonymous to "manufacturing" which refers to the physical or chemical process which alters the exterior texture of form or inner substance of any raw material or manufactured or partially manufactured product in such a manner as to prepare it for a special use or uses to which it could not have been put in its original condition, or any such process which alters the quality of any such raw materials or manufactured or partially manufactured product as to reduce it to marketable state or prepare it for any of the use of industry, or by any such process which combines or blends any such raw materials or manufactured or partially manufactured products with other materials or products of the same or different kinds and in such manner that the finished product of such process or manufacture can be put to a special use to which such raw materials or manufactured or partially manufactured products, or combines the same to others and not for his own use or consumption. Asphalt - a dark brown to black cementation material (solid, semi-solid or liquid in consistency) in which the predominating constituents are bitumens. Petroleum asphalt, as distinguished from asphalt occurring as such in nature, is refined from crude petroleum into commercial grades of widely varying consistency. Asphalt is a natural constituent of asphaltic-base crude oils, some of which are refined primarily for its recovery. Aviation turbo jet fuel - kerosene-type fuels or blends of gasoline, distillate and residual oils which are used as fuels for gas turbine powered aircraft. Basetock - a residue left from distillation or refining or the bottom products derived from distillation. Diesel fuel oil - fuel used in diesel engines, generally a gas oil or a gas-oil base. Three classifications are recognized in ASTM D 975 based on the type of engine and service, ranging from kerosene through light, intermediate and viscous gas oils including blends of the last-named residual fuels. Downgrading of petroleum products - a reclassification of contaminated or "off-spec" product to a product subject to a lower rate of Excise Tax without undergoing any reprocessing or blending. Fuel oils - any liquid or liquifiable petroleum product burned for the generation of heat in a furnace or firebox or for the generation of power in an engine, exclusive of oils with a flash point below 100 degrees Fahrenheit (tag-closed tester) and oils burned in cotton or wool-wick burners. Five grades of fuel oil for various types of oil-burning equipment are classified in ASTM D 396. Gasoline - volatile mixture of liquid hydrocarbons generally containing small amount of additives suitable for use as fuel in spark ignition internal combustion engines. Grease, Lubricating - a solid or semi-solid lubricant consisting of a thickening agent in a fluid
lubricant. The liquid is generally a petroleum lubricating oil. The thickening agent may be soap or other materials. Kerosene - a refined petroleum distillate suitable in properties for use as an illuminant when burned in a wick lamp with a required flash point higher than 73 degrees Fahrenheit by the standard test for flash point, ASTM D 56. Synonymous terms are lamp oil, burning oil, illuminating oil and range oil when the product is used in space heaters. Leaded premium gasoline - a gasoline containing a maximum of 0.150 gram per liter lead additive and minimum octane number of 93 Research Octane Number (RON). Liquified petroleum gas - industry terms for any material composed predominantly of the following hydrocarbons or mixtures of them: propane, propylene, butanes (normal or isobutane), and butylenes recovered from natural and refinery gases and kept under pressure in a liquid state, they are marketed in liquid form for industrial and domestic use as gas. For Minerals and Mineral Products Minerals - all naturally occurring inorganic substance in solid, gas, liquid or any intermediate state excluding energy materials such as coal, petroleum, natural gas, radioactive materials and geothermal energy. Mineral products - things produced and prepared in a marketable state by simple treatment processes such as washing or drying, but without undergoing any chemical change or process or manufacturing by the lessee, concessionaire or owner of mineral lands. Mineral lands - lands in which minerals exist in sufficient quantity and grade to justify the necessary expenditures in extracting and utilizing such minerals. Mineral concentrates - the product obtained by concentrating disseminated or lean ores by mechanical means, without altering their original chemical composition, to separate the undesirable minerals and/or other constituents. Lessee - may include a lease holder, claim owner or operator, quarry licensee or permittee. Quarry resources - any common rock or other mineral substances as the Director of Mines and Geo-Sciences Bureau may declare to be quarry resources such as, but not limited to, andesite, basalt, conglomerate, coral sand, diatomaceous earth, diorite, decorative stones, gabbro, granite, limestone, marble, marl, red burning clays for potteries and bricks, rhyolite, rock phospate, sandstone, serpentine, shale, tuff, volcanic cinders and volcanic glass; Provided, that such quarry resources do not contain metals or metallic constituents and/or other valuable minerals in economically workable quantities: Provided further, that non-metallic minerals such as kaolin, feldspar, bull quartz or silica, sand and pebbles, bentonite, talc, asbestos, barite, gypsum, bauxite, magnesite, dolomite, mica, precious and semi-precious stones and other non-metallic minerals that may later be discovered and which the Director of Mines and Geosciences Bureau declares the same to be economically workable quantities shall be classified under the category of quarry resources. Gross Output - shall be interpreted as the actual market value of minerals or mineral products, or of bullion from each mine or mineral lands operated as a separate entity without any deduction from mining, milling, refining (including all expenses incurred to prepare the said minerals or mineral products in a marketable state) as well as transporting, handling, marketing, or any other expenses, except as provided by the Tax Code, as amended. Indigenous petroleum - includes locally extracted mineral oil, hydrocarbon gas, bitumen, crude asphalt, mineral gas and all other similar or naturally associated substances, with the exception of coal, peat, bituminous shale and/or scratified mineral deposits. Natural Gas - refers to a mixture of naturally occurring hydrocarbon gases of the paraffin series, at varying proportions with methane predominating. It may exist in isolation or associated with crude oil. Liquefied Natural Gas - refers to a natural gas which has been liquefied by compression and/or cooling to an extremely low temperature. Integrated Operations - interpreted as operations of an establishment or company engaged in the manufacture of products or articles such as cement, ceramic, glass products/ware, bottles, concrete products, iron or steel or any products using minerals or quarry resources as raw materials extracted or quarried from the mine or quarry owned, leased or operated by the same establishment or company.
Quarry Cost - includes all costs and expenses involved in the extraction of the minerals. Cost of Goods Sold - the cost of production of finished goods sold in a given period. Fair International Market Price - refers to the price quotations posted in accordance with regulations promulgated by the Department of Finance, upon recommendation of the Commissioner of Internal Revenue in consultation with an appropriate government agency. World Price Quotation - refers to the price quotations posted in a foreign metal exchange considered by majority of metal traders, producers and consumers as the main terminal market of the world metal industry. Average Selling Price - refers to the average price based on the number of fluctuations during a given period. First Taxable Sale, Barter, Exchange or Similar Transaction - means the transfer of indigenous petroleum in its original state to a first taxable transferee. For Automobiles and other Motor Vehicles Automobile - defined as a four (4) or more wheeled vehicle other than trucks, as defined Under RA 1188, which is propelled by gasoline, diesel, or any other motive power specially designed for the transport of persons and not used primarily for carrying freight and merchandise. Provided, that its seating capacity shall be less than ten (10) adult passengers including the driver. Provided further, that the sizes of the passenger seats shall not be less than 35 centimeters wide and 60 centimeters long. It shall include utility or light commercial vehicles designed for passenger use with seating capacity of less than ten (10) adult passengers, including the driver. Light Commercial Vehicle (LCV) - motor vehicle other than an AUV that may be classified as a light truck such as commuter van or any other four-wheeled drive vehicle with gross vehicle weight of up to three (3) tons which are used primarily for carrying passengers. Asian Utility Vehicle (AUV) - an originally Philippine designed low-cost utility vehicle with a higher-local content than an LCV and a gross vehicle weight of up to three (3) tons. Special Purpose Vehicle - refers to vehicle for specific applications such as cement mixer, fire truck, ambulance and/or medical unit, armored military vehicle, crane truck, off-road vehicle, luxury tourist bus with specialized body, etc. Completely Knocked Down (CKD) - refers to parts and components for assembly purposes that are imported in disassembled condition. The CKD pack, however, may include not only parts and components but also sub-assembled and assemblies such as engine, transmission, axle assemblies, chassis and body assemblies. Semi-Knocked Down (SKD) - refers to parts and components for assembly purposes that imported in partially assembled conditions. SKDs include semi-assembled vehicles. Completely Built-Up (CBU) - refers to vehicles imported in completely assembled form and ready for use by the consumers. Manufacturers/assemblers (in case of locally manufactured/assembled automobiles) - refer to the person who combines body frame/chassis, engine, drive train, suspension and other automotive parts or one who alters any part of a vehicle to render it fit for the transport of passengers or vehicles that meet the specifications of an automobile ready for use as defined herein in such a manner as to render a vehicle fit for registration with the Land Transportation Office. Importer (in case of imported vehicles) - refers to any person bringing in from a foreign country automobiles which are intended for sale, for personal use, or for use in business. Non-tax exempt persons found in possession of the untaxed or tax-exempt automobiles any person, natural or juridical, with whom or in which the manufacturer or importer has no proprietary interest, directly or indirectly, who purchases from the manufacturer or importer for purposes of sale or subsequent distribution to the end-user or ultimate consumer. Place of Production - refers to an area designated by a manufacturer or assembler as depicted in the factory plot and plan submitted to and approved by the Commissioner of Internal Revenue or his duly authorized representative, wherein the process of manufacturing or assembling the motor vehicles are done until the same shall have been completely finished and ready for sale. For Non Essential Goods
Non-essential goods - include goods commonly or commercially known as jewelry, pearls, precious and semi-precious stones and imitations thereof, opera glasses, lorgnettes, perfume and toilet waters, yacht and other vessels intended for pleasure or sports. Precious metals - include platinum, gold, silver and other metals of similar or greater value. Imitations thereof - includes platings and alloys of such precious metals. Perfumes - refer to finished products consisting of fragrant materials, such as concentrates (pastry essential oil) or absolutes (residual pleasantly odorous substance after extraction) dissolved in alcohol or in any other appropriate solvent with adjuvant and fixatives (retardant to rate of evaporation of the pleasantly odorous constituents) as stabilizers. Toilet waters - refer to scented alcoholic or non-alcoholic preparations primarily used as body fragrance containing essential oils (examples: Lavender Water, Eau de Cologne, Eau de Toilette). Yacht - refers to a boat propelled by a sail or motor used for pleasure trips, private cruising, racing and the like. Intended for pleasure or sports (for purposes of classifying yachts and other vessels) - refer to the primary purpose for which the yacht or vessel was manufactured based on the manufacturer's product description, specification or design such as cabin cruisers, sloops, speed boats, racing yawls and the like. Opera Glass - refers to a binocular telescope of small size, suitable for use at the theater in order to have a better view of the performers and the stage play being presented. Lorgnette - refers to long-handled opera glass or a pair of eyeglasses with an ornamental handle into which they may be folded when not in use. Spectacles - refer to a pair of eyeglasses with hinged bows to secure them before the eyes, used to correct defects in vision, or to protect the eyes as from glare. Eyeglasses - refer to any pair of lenses or lens usually in a frame that is used to help or correct faulty vision. Silverplated wares - refer to any manufactured articles or products, such as tableware, glassware and the like, plated or coated with a thin layer of silver. Brand of product - refers to a name or trademark used to identify a product or group of products of a particular manufacturer and duly registered with the BIR. Wholesaler/distributor - refers to any person, natural or juridical, with whom or in which the manufacturer or importer has no proprietary interest, directly or indirectly, who purchases goods or products from the manufacturer or importer for purposes of sale or subsequent distribution or resale. Retailer - refers to any one who purchases goods for purposes of selling the same in small quantities directly to the end user or ultimate consumer. Wholesale price - refers to the price, net of Excise Tax and Value-Added Tax, at which the goods are sold to the public at wholesale in the place of production or through their sales agents. If the manufacturer also sells or allows such goods to be sold at wholesale in another establishment of which he is the owner or the profits of which he has an interest thereto, the wholesale price in such establishments shall constitute the gross selling price. Should such price be less than the cost of manufacture plus expenses incurred until the goods are finally sold, then a proportionate margin of profit, not less than 10% of such manufacturing cost and expenses shall be added to constitute the gross selling price. Model - refers to the manufacturer's given nomenclature of the non-essential good(s) more specifically that of yachts and other vessels intended for pleasure or sports. It shall also refer to the name used to identify a product or group of products of a particular manufacturer or importer and duly registered with the BIR. Primary Raw Materials - refer to the major or primary components of the finished product. Place of production - refers to an area designated by a manufacturer as depicted in the factory plat and plan submitted to and approved by the Commissioner of Internal Revenue or his duly authorized representative, wherein the processes of producing or manufacturing the non-essential goods are done until the same shall have been completely finished and ready for sale. Importer - refers to any person bringing in from a foreign country non-essential goods which are intended for sale, for personal use, or for use in business. Off-spec product - refers to a product below or outside the standard specifications set forth by the manufacturer.

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Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from the

CAPITAL GAINS TAX

3) What is meant by real property?

BIR Form 2000 (Documentary Stamp Tax Declaration Return)

Par value of such due-bills, certificate of obligation or stocks

Par value of such bonds, debentures or Certificate of Stocks

Face value of such certificate / memorandum

Face value of the instrument/document

Cost of the ticket

Mortgages First 5,000 Pledges of lands, estate, or On each

Amount Secured Amount Secured

property and Deeds of Trust

1,001 to 10,000 tons 197 Charter parties and Similar Instruments

Tonnage and duration of the contract

thereof in excess of 6 months

TAX FORM BIR Form 1800 Donors Tax Return

RELATED REVENUE ISSUANCES RR No. 2-2003 and RMO No. 1-98

Of the Excess Over P 200,000.00 500,000.00 2,000,000.00 5,000,000.00 10,000,000.00

P 15,000.00 135,000.00 495,000.00 1,545,000.00

P P 10,000.00 50,000.00 75,000.00 100,000.00 150,000.00 200,000.00 300,000.00 400,000.00 500,000.00

4% 5% 10% 15 % 20% 25% 30% 35%

625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00

750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00

134,700.00 184,700.00 240,950.00 303,450.00 833,450.00 1,393,450.00

40% 45% 50% 53% 56% 60%

625,000.00 750,000.00 875,000.00 1,000,000.00 2,000,000.00 3,000,000.00

3,000.00 10,000.00 30,000.00 50,000.00 80,000.00 110,000.00 150,000.00 190,000.00

10,000.00 30,000.00 50,000.00 80,000.00 110,000.00 150,000.00 190,000.00 240,000.00

1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5.0%

CODAL REFERENCE Sec. 84 to Sec. 97 of the National Internal Revenue Code

5) What will be used as basis in the valuation of property?

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Account Information Form For Corporations and Partnerships

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P 10,000 30,000 70,000 140,000 250,000 500,000

30,000 70,000 140,000 250,000 500,000

Improperly Accumulated Taxable Income

Taxable income from all sources

Taxable income from all sources

Taxable income from all sources Gross Income

Improperly Accumulated Taxable Income

Taxable income from all sources Gross Income

Taxable income from all sources

Improperly Accumulated Taxable Income

Taxable income from all sources

Improperly Accumulated Taxable Income

32% 14. Foreign Currency Deposit Units (FCDU)

P 500 + 10% of the Excess over P 10,000

P 2,500 + 15% of the Excess over P 30,000

5% 12% 20% 6% 8% 10% 6%

0% 32% Rate specified under the respective special laws

8) Corporation covered by Special Laws

4) Corporation Covered by Special Laws

5) Offshore Banking Units (OBUs) 6) Foreign Currency Deposit Units (FCDU)

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Quarterly Percentage Tax

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A person required to register as VAT taxpayer but failed to register