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:

  1. 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

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

  3. Franchise grantees of – 

  4. 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
  5. gas and water utilities
    • 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

  6. 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 news messages to a bona fide correspondent furnishing general news service

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

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

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

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

  11. 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

  12. Winnings in horse races

  13. 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 of business 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 filing and payment thru said system.

  3. 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

Electronic Filing

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 Sec. 116
Gross Sales or Receipts
3%
Domestic carriers and keepers of garages
Gross Receipts
3%
International Carriers:                                                                                        
International air/shipping carriers doing business in the Philippines
Gross Receipts
3%
Franchise Grantees:
Electric , 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 asVAT taxpayer
Gross Receipts
3%
Banks and non-bank financing intermediaries
Interest, commissions and discounts from lending activities as well as income from leasing on the basis of remaining maturities of instruments:
 
 
•  Short term maturity (not over 2 years)
5%
 
•  Medium term maturity (over 2 years but not over 4 years)
3%
 
•  Long term maturity
 
 

ο  Over 4 years but not over 7 years

1%
 

ο  Over 7 years

0%
 
On Dividends
0%
On royalties, rentals of properties, real or personal, profits from exchange and all other items treated as gross income under Sec. 32 of the Code
5%
Finance Companies
On interest, discounts and other items of gross income paid to finance companies and other financial intermediaries not performing quasi banking functions
5%
 
Interest, commissions and discounts paid from their loan transactions from finance companies as well as income from financial leasing shall be taxed based on the remaining maturities of instruments:
 
 
•  Short term maturity (not over 2 years)
5%
 
•  Medium term (over 2 years but not over 4 years)
3%
 
•  Long Term Maturity
 
 
ο  Over 4 years but not over 7 years
1%
 
ο  Over 7 years
0%
Life Insurance Companies (except purely cooperative companies or associations)
Total premiums collected
5%
Agents of foreign insurance companies: (except reinsurance premium)
 
 
 
Total premium collected
10%
 
Total premium collected
5%
Proprietors, lessee or operator of the following:
 
 
Cockpits
Gross receipts
18%
Cabarets, Night or Day Clubs
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%
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
Gross selling price or gross value in money of shares of stocks sold, bartered, exchanged or otherwise disposed
½ of 1%
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
Gross selling price or gross value of in money of shares of stocks sold, bartered, exchanged or otherwise disposed in accordance with  the proportion of stocks sold, bartered or exchanged or after listing in the 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

RR No. 4-95, RR 7-95, 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, RR No. 14-2003, RR No. 9-2004, RR No. 10-2004, RMC No. 6-2003, RMC No. 73-2004

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Codal Reference

Sections 116 to 128 of the National Internal Revenue Code

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