Index for Percentage Tax:


Description

      Percentage tax is a business tax imposed on persons or entities/transactions:

    1. Who sell or lease goods, properties or services in the course of trade or business and are exempt from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code, as amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who are not VAT-registered; and

    2. Engaged in the following industries/ transactions:

a.  Cars for rent or hire driven by the lessee, transportation contractors, including persons who transport passengers for hire, and other domestic carriers of
     passengers by land (except owners of animal-drawn two-wheeled vehicle) and keepers of garages

b.   International air/shipping carriers doing business in the Philippines on their gross receipts derived from transport of cargo from the Philippines to
      another country

c.   Franchise grantees of – 

        • radio and/or television broadcasting whose gross annual receipts for the preceding year do not exceed Php 10,000,000.00 and did not opt to register as VAT taxpayers
        • gas and water utilities

d. Overseas dispatch, message or conversation transmitted from the Philippines, except those transmitted by the Philippine government, any embassy
     and consular offices of a foreign government, public international organizations enjoying exemptions pursuant to an international agreement and new
     messages to a bona fide correspondent furnishing general news service

e. Banks and non-bank financial intermediaries performing quasi-banking functions

f.  Other non-bank financial intermediaries (including pawnshops)

g. Person, company or corporation (except purely cooperative companies or associations) doing life insurance business

h. Fire, marine or miscellaneous agents of foreign insurance companies

I.  Proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai and racetracks,
     including videoke bars, karaoke bars, karaoke televisions, karaoke boxes and music lounges

 j. Winnings in horse races

h. Sale, barter or exchange of shares of stock listed and traded through the local stock exchange or through initial public offering

 

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Who are required to file Percentage Tax Returns monthly?

Every person/entity subject to percentage tax as enumerated in items 1, 2.a, 2.b, 2.c, 2.e, 2.f, 2.g and 2.h above

Who are required to file Percentage Tax Returns quarterly?

    1. Operator, manager or person in charge of:
      • cockpits,
      • cabarets, day or night clubs, videoke bars, karaoke bars, karaoke televisions, karaoke boxes and music lounges
      • boxing exhibitions
      • professional basketball games
      • Jai-alai and race tracks
    2. Telephone and communication companies on their overseas dispatch, message or conversation originating and transmitted from the Philippines

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Monthly Percentage Tax 

Tax Form

BIR Form 2551M - 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. For amended return, proof of payment and the return previously filed

  4. Authorization letter, if filed by an authorized representative 

Procedures

  1. Fill-up BIR Form 2551M in triplicate copies
  2. If there is payment:

    • Proceed to any Authorized Agent Bank (AAB) located within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered and present the duly accomplished BIR Form 2551M, together with the required attachments and payment. The Percentage Tax shall be paid at the time the return is filed by the taxpayer.
    • In places where there are no AABs, the duly accomplished BIR Form 2551M, together with the required attachments and payment, shall be filed/paid with the Revenue Collection Officer (RCO) or duly authorized Treasurer of the city or municipality where said business or principal place is located.
    • Receive the taxpayer's copy of BIR Form 2551M duly validated/stamp-received by the AAB/RCO/authorized City or Municipal Treasurer.

       For eFPS filers, you may click this Job Aid in filling and payment thru said system.

  1. If there is no payment:

    • Proceed to the RDO where the taxpayer is registered or with the concerned RCO and present the duly accomplished BIR Form 2551M, together with the required attachments.
    • Receive the taxpayer's copy of BIR Form 2551M duly stamp-received by 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.

When to File/Pay

  • Manual Filing

Within twenty (20) days following the end of each month

  • Electronic Filing

For taxpayers enrolled with the Electronic Filing and Payment System (eFPS), in accordance with the schedule set forth in RR No. 26-2002 as follows:

  • 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 end the of the month
  • Group E : Twenty one (21) days following the end of the month

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Quarterly Percentage Tax

Tax Form

BIR Form 2551Q - 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. For amended return, proof of payment and the return previously filed
  4. Authorization letter, if filed by an authorized representative

Procedures

  1. Fill-up BIR Form 2551Q in triplicate copies.

  2. If there is payment:

    • Proceed to any AAB located within the territorial jurisdiction of the RDO where the taxpayer is registered and present the duly accomplished BIR Form 2551Q, together with the required attachments and payment.  The Percentage Tax shall be paid at the time the return is filed by the taxpayer.

    • In places where there are no AABs, the duly accomplished BIR Form 2551Q, together with the required attachments and payment, shall be filed/paid with the RCO or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located.

    • Receive the taxpayer's copy of BIR Form 2551Q duly validated/stamp-received by the AAB/RCO/authorized City or Municipal Treasurer.

       For eFPS filers, you may click this Job Aid in filing and payment thru said system

  3. If there is no payment: 
    • Proceed to the Revenue District Office where the taxpayer is registered or with the concerned RCO and present the duly accomplished BIR Form 2551Q, together with the required attachments.
    • Receive the taxpayer's copy of BIR Form 2551Q duly stamp-received by 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.

When to File/Pay

  • Manual Filing

Within twenty (20) days after the end of each taxable quarter

  • Electronic Filing

Within twenty (20) days after the end of each taxable quarter

 

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Percentage Tax Return For Transactions Involving Shares of Stocks Listed and Traded Through the Local Stocks 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 Stocks Exchange or Through Initial and/or Secondary Public 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.  For amended return, proof of payment and the return previously filed

5.  Authorization letter, if filed by an authorized representative

Procedures

1.  Fill-up BIR Form 2552 in triplicate copies.

2.  If there is payment:

    • Proceed to any AAB located within the territorial jurisdiction of the RDO 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 shall be paid at the time the return is filed by the taxpayer.

    • Receive the BIR Form 2552 taxpayer's copy duly validated and stamp-received by the teller of the AAB

  •    For eFPS filers, you may click this Job Aid in filing and payment thru said system.

3.  If there is no payment:

    • Proceed to the RDO having jurisdiction over the local stock exchange and present the duly accomplished BIR Form 2552, together with the required attachments.

    • Receive the BIR Form 2552 taxpayer's copy duly stamp received by 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.

When to File/Pay

  • For tax on sale of shares of stocks listed and traded through the local stock exchange (LSE) – within five (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 five (5) banking days from the date of collection

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Tax Rates

Coverage
Basis
Tax Rate
Persons exempt from VAT under Section 109 (W)
Gross Receipts on sale or lease of goods, properties or services
3%
Domestic carriers and keepers of garages
Gross Receipts on transport of passengers by land (except those thru animal drawn two-wheeled vehicles)
3%
International Carriers:                                                                                        
International air/shipping carriers doing business in the Philippines
Gross Receipts from transpot of cargo from the Philippines to another country
3%
Franchise Grantees:
Gas and water utilities
Gross Receipts
2%
Radio and television broadcasting companies whose annual gross receipts of the preceding year do not exceed P 10,000,000 and did not opt to register as VAT taxpayer
Gross Receipts
3%
Overseas dispatch, message or conversation originating from the Philippines Gross Receipts 10%
Banks and non-bank financing intermediaries performing quasi-banking functions
 
 
 
On interest, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments maturities of instruments from which recipts are derived:
•  Maturity period is five years or less
5%
•  Maturity period is more than five years
1%
On dividends and equity shares and net income of subsidiaries
0%
On royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under Sec. 32 of the Tax Code, as amended
7%
On net trading gains within the taxable year of foreign currency, debt securities, derivatives and other similar financial instruments 7%
Other non-bank financial intermediaries
 
 
 
Interest, commissions and discounts and all other items treated as gross income under the Tax Code, as amended
5%
Interest, commissions and discounts  from lending activities, as well as income from financial leasing on the basis of remaining maturities of instruments:
•  Maturity period is five years or less
5%
•  Maturity period is more than five years
1%
Life Insurance Companies (except purely cooperative companies or associations)
Total premiums collected
2%
Agents of foreign insurance companies (except reinsurance premium):
Insurance agents authorized under the Insurance Code to procure policies of insurance for companies not authorized to transact business in the Philippines
Total premiums collected
4%
Owners of property obtaining insurance directly with foreign insurance companies
Total premiums paid
5%
Proprietor, lessee or operator of the following:
Cockpits
Gross receipts
18%
Cabarets, Night or Day Clubs videoke bars, karaoke bars, karaoke televisions, karaoke boxes and music lounges
Gross receipts
18%
Boxing exhibitions
Gross receipts
10%
Professional basketball games
Gross receipts
15%
Jai-alai and race track (operators shall withheld tax on winnings)
Gross receipts
30%
Winnings on horse races
 
 
  • Winnings or 'dividends'
10%
  • Winnings from double forecast/quinella and trifecta bets
4%
  • Prizes of owners of winning race horses
10%
Sale, Barter, Exchange of Shares of Stock Listed and Trased through the Local Stock Exchange or Through Initial Public Offering  
Sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange other than the sale by a dealer of securities [Sec. 127 (A)] Gross selling price or gross value in money ½ of 1%
Sale, barter or exchange or other disposition through initial public offering (IPO) of shares of stock in closely-held corporations [Sec. 127 (B)]   

Gross selling price or gross value in money

Proportion of disposed shares to total outstanding shares after the listing in the local stock exchange:

  • Up to 25%
4%
  • Over 25% but not over 33 1/3%
2%
  • Over 33 1/3%
1%

 

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Related Revenue Issuances

 REVENUE REGULATIONS (RRs)  
 Issuance No.  Subject  Date of Issue
RR No. 8-2008 Supplementing Revenue Regulations No. 9-2004, as Amended by Revenue Regulations No. 10-2004, Clarifying that the Transactions of the Bangko Sentral ng Pilipinas (BSP) Entered into the Exercise of its Governmental/Regulatory Authority are outside of the Coverage of the Gross Receipts Tax Imposed Under Sections 121 and 122 of the 1997 National Internal Revenue Code, as Last Amended by Republic Act No. 9337
(published in Philippine Star on August 30, 2008)
Digest | Full Text

 August 29, 2008 
RR No. 6-2008 Consolidated Regulations Prescribing the Rules on the Taxation of Sale, Barter, Exchange or Other Disposition of Shares of Stock Held as Capital Assets
(published in Manila Bulletin on May 5, 2008)
Digest | Full Text

May 2, 2008
RR No. 13-2007 Prescribing the Rules on the Advance Payment of Value-Added Tax/Percentage Tax  on the Transport of Naturally Grown Planted Timber Products
(published in Philippine Daily Inquirer on Dec. 7, 2007)
Digest | Full Text | Annex A

December 5, 2007
RR No. 9-2007 Prescribing the Updated Minimum Monthly/Quarterly Gross Receipts in Computing the Percentage Tax of Domestic Carriers and Keepers of Garages
(published in Philippine Daily inquirer on August 3, 2007)
Digest | Full Text

 August 1, 2007
RR No 4-2007 Amending Certain Provisions of Revenue Regulations No. 16-2005, As Amended, Otherwise Known as the Consolidated Value-Added Tax Regulations of 2005
(published in Manila Bulletin on March 22, 2007)
Digest | Full Text

March 20, 2007
RR No. 10-2004 To Further Implement the Provisions of Section 4 of Republic Act No. 9238 Re-Imposing the Gross Receipts Tax on Other Non-Bank Financial Intermediaries Beginning January 1, 2004 and hereby Amending for the Purpose of Section 4 of Revenue Regulations No. 9-2004 by Including Pawnshops under the Classification of Other Non-Bank Financial Intermediaries
(published in Manila Standardon Nov. 25, 2004)
Digest | Full Text

 November 23, 2004
RR No. 9-2004 Implementing Certain Provisions of Republic Act No. 9238, Re-Imposing the Gross Receipts Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions and Other Non-Bank Financial Intermediaries Beginning January 1, 2004
(published in Manila Standard on July 1, 2004)
Digest | Full Text

June 25, 2004
RR No. 20-2003 Amending Certain Provisions of Revenue Regulations No. 18-99, as amended by RR No. 12-2003, Implementing Section 5 of Republic Act No. 8424, Otherwise Known as the Tax Reform Act of 1997, and Other Pertinent Provisions of the National Internal Revenue Code of 1997 Imposing VAT in Services of Banks, Non-Bank Financial Intermediaries and Finance Companies Beginning January 1, 2003 Pursuant to Section 1 of Republic Act No. 9010
(published in Manila Bulletin on June 28, 2003)
Digest | Full Text
 
June 27, 2003
RR No. 16-2003

Implementing the Provisions of Sections 6, 244 and 245 in Relation to Sections 24, 25, 27, 28, 51, 52, 106, 108, 114, 116 and 128 of the National Internal Revenue Code of 1997 (Tax Code), Imposing Advance Payment of Value-Added Tax or Percentage Tax and of Income Tax on "Privilege-Store" and Prescribing and Reiterating the Obligations of Organizer or Exhibitor of Space of the Operation of "Privilege-Store", as well as of the "Privilege-Store" Operators
(published in Philippine Star on April 30, 2003)
Digest | Full Text

April 29, 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 the 3% Percentage Tax Under Section 116 of the Code, and/or to the Value-Added Tax (VAT) Under Sections 106 and 108 of the Tax Code
(published in Manila Bulletin on April 4, 2003)
Digest | Full Text | Annex A | Annex B | Annex C | Annex D | Annex E | Annex F

April 3, 2003
RR No. 12-2003 Amending Certain Provisions of Revenue Regulation No. 18-99 Implementing Section 5 of Republic Act No. 8424, Otherwise Known as the Tax Reform Act of 1997, and Other Pertinent Provisions of the National Internal Revenue Code of 1997 Imposing VAT on Services of Banks, Non-Bank Financial Intermediaries and Finance Companies, Beginning January 1, 2003 Pursuant to Section 1 of Republic Act No. 9010
(published in Manila Bulletin on March 12, 2003)
Digest | Full Text

March 11, 2003
RR No. 26-2002 Amending Further Revenue Regulations No. 9-2001, as Amended by Revenue Regulations No. 2-2002 and Revenue Regulations No. 9-2002, Providing for the Staggered Filing of Returns of Taxpayers Enrolled in the Electronic Filing and Payment System (eFPS) Based on Industry Classification
(published in Manila Bulletin on Dec. 20, 2002)
Digest | Full Text

 December 19, 2002
RR No. 15-2002 Revenue Regulations Governing the Imposition of Income Tax on the Gross Philippine Billings, other income of International Air Carriers and Common Carrier's Tas, as well as the Manner of Claiming Deductions on Travel Expenses and Freight Charges Incurred
(published in Manila Bulletin on Oct. 11, 2002)
Digest | Full Text

October 7, 2002
RR No. 4-2002 Amending the Due Dates for the Filing/Issuance of Certain BIR Tax Returns/Forms, Clarifying the Form type to be Used on Certain Transactions and Prescribing Certain Attachments to Returns Filed
(published in Manila Bulletin on April 7, 2002)
DigestFull Text

April 5, 2002
RR No. 12-2001

Amendment to the Pertinent Provisions of Revenue Regulations No. 1-98, as Amended, Revenue Regulations No. 2-98, as Amended, and Revenue Regulations No. 6-2001, Relative to the Revision of Withholding Tax Rates on Certain Income Payments Subject to withholding Tax, the Deferment of the New Deadline Dates for Filing Selected Tax Returns, the Reporting Requirements for Recipients of Talent Fees, and for Other Purposes
Full Text

September 10, 2001
RR No. 6-2001

Amending Pertinent Provisions of Revenue Regulations Nos. 1-98, 2-98, as Amended and 7-95, as Amended, and Revenue Memorandum Circular No. 1-98 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 Filing of Various Tax Returns and Payment of the Taxes Due Thereon and Others
Full Text

August 1, 2001
RR No. 2-1998 Implementing Republic Act No. 8424, "An Act Amending the National Internal Revenue Code (NIRC), as Amended" Relative to the Withholding on Income Subject to the Expanded Withholding Tax and Final Withholding Tax, Withholding of Income Tax on Compensation, Withholding of Creditable VAT and Other Percentage Taxes
Digest

 May 17, 1998
REVENUE MEMORANDUM CIRCULARS (RMCs)
RMC No. 49-2010 Further Amending Certain Protions of RMC No. 30-2008, as Amended by RMC No. 59-2008, on the Subject of the Taxability of Insurance Companies for Minimum Corporate Income Tax (MCIT), Business Tax and Documentary Stamp Tax Purposes
Digest | Full Text

June 7, 2010
RMC No. 18-2010 Clarifies the Coverage and Taxability of Amusement Places under Section 125(b) of the National Internal Revenue Code of 1997, as Amended
Digest | Full Text

March 8, 2010
RMC No. 16-2009 Clarifying the Instruments Embraced by the Term "Deposit Substitutes" Under Revenue Regulations No. 8-2008
Digest | Full Text

March 17, 2009
RMC No. 59-2008 Amends Certain Portions of RMC No. 30-2008 on the Taxability of Insurance Companies for Minimum Corporate Income Tax, Business Tax and Documentary Stamp Tax Purposes
Digest | Full Text
 
August 27, 2008
RMC No. 46-2008 Clarification of Issues Concerning Common Carriers by Air and Their Agents Relative to the Revenu and Receipt from Transport of Passengers, Goods/Cargoes and Mail, and From Excess Baggage
Digest | Full Text

June 20, 2008
RMC No. 30-2008 Clarifies the Taxability of Insurance companies for Minimum Corporate Income Tax, Business Tas and Documentary Stamp Tax Purposes
Digest | Full Text

April 8, 2008
RMC No. 73-2004  Guidelines and Policies Applicable to the Business Tax Applicable to Pawnshops as a Result of the Issuance of Revenue Regulations No. 10-2004, Including Pawnshops Under the Classification of Other Non-Bank Financial Intermediaries in Accordance with the Power Granted the Commissioner of Internal Revenue Under Section 4 of Republic Act No. 9238
Digest | Full Text

 November 26, 2004
RMC No. 37-2004 Settlement of the Value-Added Tax Liabilities of Pawnshops for Taxable Years 1996 to 2002
Digest | Full Text | Annex A | Annex 1 | Annex 2

June 16, 2004

RMC No. 10-2004 Guidelines and Policies to Supplement RMC No. 9-2004 issued in Relation to the Implementation of Republic Act No. 9238 for Banks and Non-Bank Financial Intermediaries, Specifically for the Re-imposition of Gross Receipts Tax 
Digest | Full Text 

February 23, 2004
RMC No. 9-2004

Guidelines and Policies Applicable to the Business Tax Applicable to Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions and other Non-Bank Financial Intermediaries as a Result of the Enactment and Effectivity of Republic Act No. 9238, An Act Amending Certain Provisions of the National Internal Revenue Code of 1997, as amended, by Excluding Several Services from the Coverage of the Value-Added Tax and Re-Imposing the Gross Receipts Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions and Other Non-Bank Financial Intermediaries Beginning January 1, 2004

Digest | Full Text | RA No. 9238

 February 19, 2004
RMO No. 69-2003 Clarifying the Tax Base for Purposes of the Percentage (Gross Receipts ) Tax Imposed under Sections 121 and 122 of the Tax Code
Digest | Full Text

 October 22, 2003
RMC No. 14-2003

Waiver of Penalties on 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, Television and Stage Directors, and Professional Athletes; and, Services Rendered by Customs, Real Estate, Stock, Immigration and Commercial Brokers Becoming Liable to VAT or Percentage Tax, Whichever is Applicable, Beginning January 1, 2003 Who Failed to File Their VAT/Percentage Tax Returns for the Months of January and February on the Due Dates Specified Under Revenue Regulations No. 1-2003, as amended by Revenue Regulations Nos. 3-2003 and 11-2003
Digest | Full Text

March 26, 2003
RMC No. 6-2003

Clarifying Certain Issues Relative to the Services Rendered by Individual Professional Practitioners, General Professional Partnerships, Entertainers, and Professional Athletes Who are Subject to the Value-Added Tax or Percentage Tax, Whichever is Applicable, Beginning January 1, 2003
Digest | Full Text | Annex A

January 22, 2003
RMC No. 51-2002

Imposition of the Gross Receipts Tax Under Sections 121 and 122 of the Tax Code on Items of Gross Income Subject to Final Withholding Tax and Clarifying the Tax Base thereof
Digest

November 15, 2002

 

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Codal Reference

Sections 116 to 128 of the National Internal Revenue Code

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