Percentage Taxes notes

8/13/2019 Percentage Taxes notes

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PERCENTAGE TAX

Percentage tax are taxes imposed on the sale, barter, exchange, or

importation of goods or the sale of services, based upon the gross sales,

value in money or receipts desired by the manufacturers, producer,

importer or seller.

Sec. 116Tax on persons exempt from VATshall pay a tax equivalent

to 3% of his gross quarterly sales or receipts provided that Cooperativesis exempted.

Persons liable to Percentage tax1. Persons who sales or receipts are exempt from VAT a and non-

VAT registered for having annual gross or receipt not exceeding550,000

2. Domestic common carriers and keepers of garagesCars for rent or hire driven by the lessee; transportation

contractors, including persons who transport passengers for hire;

and other domestic carriers by land, air or water, for the transportof passengers; and keepers of garages.Except: a. owners of bancas

b. owners of animal-drawn two-wheeled vehiclesshall pay 3% of their quarterly gross receipts

>In computing 3% - minimum gross receiptsJeepney for hire

Manila and other cities 2,400Provincial 1,200

Public Utility BusNot exceeding 30 passengers 3,600Exceeding 30 but not 50 passengers 6,000Exceeding 50 passengers 7,200

TaxiManila and other cities 3,600Provincial 2,400

Car for hire (with chauffeur) 3,000Car for hire (without chauffeur) 1,800

3. International Carriersa. International air carriers doing business in the Philippines

3% of their quarterly gross receiptsb. International shipping carriers doing business in the

Philippines3% of their quarterly gross receipts

4. Tax on Franchisesa. Radio and TV broadcasting companies gross receipts

not exceed 10M 3% option to be registered as VAT

payer, once the option exercised, no revocationb. Electronic, gas and water utilities 2% on gross receipts

without option to register as VAT taxpayer

5. Tax on Overseas Dispatch, Message or Conversation Originatingfrom the Philippines

a. by telephoneb. wireless and other communication

Tax 10% on the amount paid for such services- person paying the service to the person rendering

the service- person rendering services required to pay and

collect the tax within 20 days after the end ofeach quarter

Exemptions:a. Governmentb. Diplomatic servicesEmbassy and Consular offices of

a foreign governmentc. International OrganizationsRed Cross, UNICEF,

OXFAM, MERLIN

d. News ServicesDZMM, GMA, ABSCBN

6. Banks and Non-Banks IntermediariesA. Interest, commissions and discounts from lending

activitiesa. Short term maturity (not exceed 2 years) 5%b. Medium Term (2 years not exceed 4 years) 3%c. Long Term maturity (over 4 years) 1%

B. Royalties, rentals of property, real or personal,profits from exchange and all other items 5%


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7. Tax on Finance Companies (same as above except royalties)

8. Tax on Life Insurance Premium 5% of the total premiumcollected

9. Tax on Agents of Foreign Insurance CompaniesFire, marine and other miscellaneous2 X 5% = 10% - total premium collected

10. Amusement TaxesShall be collected from thea. Proprietorb. Lessee or operator of,

Cabaret 18%Cockpit 18%Night or day club 18%Boxing exhibitions 10%Professional basketball games 15%Jai-alai 30%Race track 30%

11. Tax on Winningshorse races10%

12. Tax on (A) Sale, Barter or Exchange of Shares of Stock Listedand Traded through Local Stock exchange or (B) through LimitedPublic Hearing (Close held Corporations)

A of 1% = gross selling price of shares of stock soldBclose held corporations50% of the outstanding

capital owned by not more than 20 persons

25% of the shares of stock sold 4%Over 25% but not exceed 33 1/3% 2%Over 33 1/3% 1%

Paid by the corporation in primary offering or the sellerin secondary offering

Paymentwithin 5 banking days after collection- Public offering 30 days from the date of

listing of the shares of stock in the local stock

exchange

A. Returns of Gross Sales, Receipts and Payment of Tax1. Every person subject to percentage tax shall

pay within 25 days after the end of taxablequarter

2. Person retiring from business subject topercentage tax shall notify the nearest BIRwithin 20 days after closing the business;unless otherwise provided by the law

EXCISE TAX

Excise Taxtax imposed on certain specific goods or articlesmanufactured or produced in Philippines

1. for domestic sale or consumption or for any otherdisposition

2. things imported into the Philippines

Nature of Excise TaxSince they are LEVIES on certain product or good therefore they

are tax on property

Kinds of Excise Tax1. Specific taxtax imposed and based on:

a. weight; orb. volume capacity; orc. any other physical unit or measurement

2. Ad Valorem taxtax imposed and based on:a. selling price; orb. specified value of the good

>In case of importations in addition there:1. custom duties2. excise tax also subject to VAT

Goods/Articles subject to Excise Taxes1. Alcohol products

a. Distilled SpiritsSTb. WinesSTc. Fermented LiquorsAV

2. Tobacco Products

a. TobaccoSTb. Cigars and CigarettesAV


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3. Petroleum ProductsST

4. Miscellaneous Articlesa. AutomobilesAVb. Non-essential goodsAV

>jewelry, precious and semis-precious stones>yachts and other vessels intended for pleasure or

Sports

5. Mineral ProductsCoalSTNon-metallic minerals and quarry resources

Rate1. Volume2. Length3. Weight

>Ad Valorem taxamount fluctuates as the price of the articles move upand down

>cigarson number

Payment of Excise TaxesThey shall be paid:

A. In the case of Domestic ProductsManufacturers/Producers

a. before removal from the place of productionexceptotherwise provided by the law

b. locally manufactured petroleum products15 days fromthe date of removal

B. In the case of imported articles

a. before the release from the custom house

>No deadline of filing and payment of excise taxunlike VAT, estate tax,donor tax and other percentage tax

Specific Tax on Wines1. Retail price + VAT

a. P500 or less P100b. more than P500 P300

2. Wines containing 14% of alcohol by

Volume or less P 12

3. Wines over 14% but not more than25% of alcohol P 24

Example100 cases of wine12 bottles/case at 1 literRetail price = P625/bottleExcise tax = 100 X 12 = 1,200

1,200 X 1 = 1,200 (total quantity/liter)X 300 (tax rate) =

Tax due = P360,000

Specific Tax on Cigars and CigarettesTax per pack

Retail price1. above P10/pack P12.002. above P6.50 but does not exceed P10

per pack P 8.003. P5.00 but does not exceed P6.50 P 5.004. below P5.00 P 1.00

>ST = 12/8/5/1 X No. of packs =

Automobile

Ad-valoremGasoline/DieselSelling PriceP400,000

Engine Displacement (in cc)

Gasoline Diesel Tax rate

Up to 1600 Up to 1800 15%16012000 18012300 35%20012700 23013000 50%2701over 3001over 100%

Ex: Selling PriceP400,0001600 X 400,000 = P60,000tax

Manufactured Oils and Other Fuels(Per liter of volume capacity)

Lubricating oil and greases P 4.50

Ex. 4.50 X no. of liters =


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DOCUMENTARY STAMP TAXMeaning of DST

Documentary stamp tax is a tax on documents, instruments, loanagreements and papers, and upon acceptances, assignments, salesand transfers of the obligation, right or property incident thereto -there shall be levied, collected and paid for corresponding stamptaxes

1. By whom payable by the person making, signing, issuing,

accepting and transferring such obligations, right or propertyIn other words Both the person who issued the document and

the person to whom it is issuedliable for the taxunless otherwiseprovided by the law (one party to the taxable document isexemptedthe other partynot exempted will pay the tax)

2. When payablea. at the time the act is doneb. transaction is held or accomplishedc. the time of execution; ord. issuance of document

3. How payable by purchasing and affixing the required documentarystamp to the document or instrument and subsequently cancelling thesame in the prescribed manner > thru the use of tax-meter no needto cancelled

4. How documentary stamp cancelleda.b.c.

>within 10 days Filed when the taxable documents were made, paythe tax at the time the return is filed

>Where to file1. authorized Agent Bank2. BIR District Office3. authorized treasurer of the city or municipality in which the

taxpayer has his legal residence or principal place of business

Document subject to tax:>Sec. 174 198 various kinds of evidence of debt issues and

acceptances

Sec. 174

(Paki-check din po ung mga nakalagay, BANGAG po kasi ang nag-type)

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Documents

Percentage Taxes notes