Index for Excise Tax

Concepts of Excise Tax
Excise Tax Rates
Related Revenue Issuances
Codal References


BASIC CONCEPT:

  • Excise Tax is a tax on the production, sale or consumption of a commodity in a country.

APPLICABILITY:

  • On goods manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition; and
  • On goods imported.

TYPES OF EXCISE TAX:

  • Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement
  • Ad Valorem Tax – refers to the excise tax which is based on selling price or other specified value of the goods/articles

MANNER OF COMPUTATION

  • Specific Tax = No. of Units/other measurements x Specific Tax Rate
  • Ad Valorem Tax = No. of Units/other measurements x Selling Price of any specific value per unit x Ad Valorem Tax Rate

MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED CODAL SECTION:

1. Alcohol Products (Sections 141-143)

a. Distilled Spirits (Section 141)
b. Wines (Section 142)
c. Fermented Liquors (Section 143)

2. Tobacco Products (Sections 144-146)

a. Tobacco Products (Section 144)
b. Cigars & Cigarettes (Section 145)
c. Inspection Fee (Section 146)

3. Petroleum Products (Section 148)

4. Miscellaneous Articles (Section 149-150)

a. Automobiles (Section 149)
b. Non-essential Goods (Section 150) 
c. Non-essential Service (Section 150-A) - RA 10963 [TRAIN Law))
d. Sweetened Beverages (Section 150-B)-(RA 10963 [TRAIN Law])

5. Mineral Products (Sections 151)

PERSONS LIABLE TO EXCISE TAX:

In General:

a. On Domestic or Local Articles

      • Manufacturer
      • Producer
      • Owner or person having possession of articles removed from the place of production without the payment of the tax

b. On Imported Articles

      • Importer
      • Owner
      • Person who is found in possession of articles which are exempt from excise taxes other than those legally entitled to exemption

Others:

On Indigenous Petroleum

      • Local Sale, Barter or Transfer
        • First buyer, purchaser or transferee
      • Exportation
        • Owner, lessee, concessionaire or operator of the mining claim

TIME OF PAYMENT:

In General

      • On domestic products
        • Before removal from the place of production
      • On imported products
        • Before release from the customs' custody

[return to index]


EXCISE TAX RATES:

A. ALCOHOL PRODUCTS

PARTICULARS NEW TAX RATES based on Republic Act No. 10351
Remarks
2018
onwards
2013
2014
2015
2016
2017
A. DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX

1) AD VALOREM TAX RATE - Based on the Net Retail Price (NRP) per proof (excluding the excise and value-added taxes);
and

15%
15%
20%
20%
20%
20%
2) SPECIFIC TAX - Per proof liter
Php20
Php20
Php20
Php20.80
Php21.63
Effective 1/1/2016, the specific tax rate shall be increased by 4% every year thereafter
B. WINES, per liter of volume capacity
1) Sparkling wines/ champagnes, where the NRP (excluding the excise and VAT) per bottle of 750ml volume capacity, regardless of proof is:          
Effective 1/1/2014, the specific tax rate shall be increased by 4% every year thereafter
Php500.00 or less
Php250
Php260
Php270.40
Php281.22
Php292.47
More than Php500.00
Php700
Php728
Php757.12
Php787.40
Php818.90
2) Still wines and carbonated wines containing 14% of alcohol by volume or less
Php30.00
Php31.20
Php32.45
Php33.75
Php35.10
3) Still wines and carbonated wines containing more than 14% (of alcohol by volume) but not more 25% of alcohol by volume
Php60.00
Php62.40
Php64.90
Php67.50
Php70.20
4) Fortified wines containing more than 25% of alcohol by volume
Taxed as distilled spirits
C. FERMENTED LIQUORS , per liter of volume capacity
1) If the NRP (excluding excise and VAT) per liter of volume capacity is:          
Effective 1/1/2018, the specific tax rate shall be increased by 4% every year thereafter
Php 50.60 and below
Php15.00
Php17.00
Php19.00
Php21.00
Php23.50
More than Php 50.60
Php20.00
Php21.00
Php22.00
Php23.00
Php23.50
2) If brewed and sold at microbreweries or small establishments such as pubs and restaurants, regardless of the NRP
Php28.00
Php29.12
Php30.28
Php31.50
Php32.76
Effective 1/1/2014, the specific tax rate shall be increased by 4% every year thereafter
NOTE:
IN CASE OF FERMENTED LIQUORS AFFECTED BY THE "NO DOWNWARD RECLASSIFICATION " PROVISION, THE 4% INCREASE SHALL APPLY TO THEIR RESPECTIVE APPLICABLE TAX RATES

 

B. TOBACCO PRODUCTS

PARTICULARS
NEW TAX RATES based on Republic Act No. 10351
Remarks 2018 onwards
2013
2014
2015
2016
2017
A. TOBACCO PRODUCTS, per kilogram
1. Tobacco Products
(a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing;
Php1.75
Php1.82
Php1.89
Php1.97
Php2.05
Effective 1/1/2014, the specific tax rate shall be increased by 4% every year thereafter
(b) Tobacco prepared or partially prepared with or without the use of any machine or instrument or without being pressed or sweetened; and
Php1.75
Php1.82
Php1.89
Php1.97
Php2.05
(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems, midribs and sweepings of tobacco;
Php1.75
Php1.82
Php1.89
Php1.97
Php2.05
2. Chewing tobacco unsuitable for use in any other manner
Php1.50
Php1.56
Php1.62
Php1.68
Php1.75
 
B. CIGARS, per cigar
3. Cigars          
Effective 1/1/2014, the specific tax rate shall be increased by 4% every year thereafter
(a) Based on the NRP per cigar (excluding the excise and value-added taxes), and
20%
20%
20%
20%
20%
(b) Per cigar
Php5.00
Php5.20
Php5.41
Php5.62
Php5.85
C. CIGARETTES , per pack
PARTICULARS NEW TAX RATES based on RA No. 10963 (TRAIN Law)
January 1, 2018 until June 30, 2018 July 1, 2018 until December 31, 2019 January 1, 2020 until December 31, 2021 January 1, 2022 until December 31,2023 January 1, 2024 onwards
1. Cigarettes packed by hand
Php32.50
Php35.00
Php37.50
Php40.00
 
 
 
 
Effective 1/1/2024, the specific tax rate shall be increased by 4% every year thereafter
  
 
 
 
 
2. Cigarettes packed by machine
      Php32.50       Php35.00  Php37.50  Php40.00

 

INSPECTION FEE - There shall be collected inspection fees on leaf tobacco, scrap, cigars, Cigarettes and other manufactured tobacco and tobacco products as follows:

PRODUCT TYPE
INSPECTION FEE
(1) Cigars P 0.50 per thousand pieces or fraction thereof
(2) Cigarettes P 0.10 per thousand sticks or fraction thereof
(3) Leaf Tobacco P 0.02 per kilogram or fraction thereof
(4) Scrap and other manufactured tobacco P 0.03 per kilogram or fraction thereof

 

C. PETROLEUM PRODUCTS

 
PRODUCT TYPE
EFFECTIVITY (RA 10963-TRAIN Law)
January 1, 2018 January 1, 2019 January 1, 2020
(a) Lubricating oils and greases, including but not limited to base stock for lube oils and greases, high vacuum distillates, aromatic extracts and other similar preparations, and additives for lubricating oils and greases, whether such additives are petroleum based or not,per liter and kilogram respectively, of volume capacity or weight
 
 
 
 
 
 
 
Php8.00
 

Php9.00

Php10.00

(a.1) Locally produced or imported oils previously taxed but are subsequently reprocessed, re-refined or recycled, per liter and kilogram of volume capacity or weight.

(b)Processed gas, per liter of volume capacity
(c)Waxes and petrolatum, per kilogram
(d)Denatured alcohol to be used for motive power , per liter of volume capacity
(e)Asphalt, per kilogram
(f)Naphtha, regular gasoline, pyrolysis gasoline and other similar products of distillation, per liter of volume capacity
 
 
Php7.00
 

 Php9.00 

 Php10.00 

(g)Unleaded premium gasoline, per liter of volume capacity
(h)Kerosene, per liter of volume capacity  Php3.00  Php4.00  Php5.00
(i)Aviation turbo jet fuel,aviation gas, per liter of volume capacity

Php4.00  

  Php4.00

  Php4.00

(j)Kerosene when used as aviation fuel, per liter of volume capacity
(k)Diesel fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity
 
 
 
 
Php2.50
 

  Php4.50 

  Php6.00 

(l)Liquified petroleum gas used for motive power, per kilogram
(m)Bunker fuel oil, and on similar oils having more or less the same generating power, per liter of volume capacity
(n)Petroleum coke, per metric ton
(o)Liquified petroleum gas, per kilogram
Php1.00
 Php2.00  Php3.00
(p)Naphtha and pyrolysis gasoline, when used as raw material in the production of petrochemical products or in the refining of petroleum products, or as replacement fuel for natural-gas-fired-combined cycle power plant, in lieu of lacally-extracted natural gas during the non-availability thereof, per liter of volume capacity
 
 
 
 
 Php0.00
 

   Php0.00

   Php0.00

(q)Liquified petroleum gas, when used as raw material in the production of petrochemical products, per kilogram
(r)Petroleum coke when used as feedstock to any power generating facility, per metric ton

 

D. MINERALS AND MINERAL PRODUCTS

PRODUCT TYPE
TAX RATES (RA 10963-TRAIN Law)
 
Coal and coke (Domestic and Imported)
January 1, 2018 - Php50.00
January 1, 2019 - Php100.00
January 1, 2020 - Php150.00
   and onwards
Nonmetallic Minerals and Quarry Reources (Locally extracted or produced)  Four percent (4%) based on the actual market value of the gross output thereof at the time of removal
Nonmetallic Minerals and Quarry Resources (Imported) Four percent (4%) based on the value used by the Bureau of Customs (BOC) in determining tariff and customs duties, net of excise tax and value-added tax
Locally-extracted natural gas and liquefied natural gas Exempt
All Metallic Minerals (locally extracted or produced copper, gold, chromite and other metallic minerals) Four percent (4%) based on the actual market value of the gross output thereof at the time of removal
Imported copper, gold, chromite and other metallic minerals Four percent (4%) based on the value used by BOC in determining tariff and customs duties, net of excise tax and value added tax
On indigenous petroleum

Six percent (6%) of the fair international market price thereof, on the first taxable sale, barter, exchange or such similar transaction, such tax to be paid by the buyer or purchaser before removal from the place of production. The phrase “first taxable sales, barter, exchange or similar transaction’' means the transfer of indigenous petroleum in its original, state to a first taxable transferee. The fair international market price shall be determined in consultation with appropriate government agency.

          For the purpose of this Subsection, “indigenous petroleum” shall include 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 stratified mineral deposits."
NOTE:
In the case of mineral concentrates not traded in commodity exchanges in the Philippines or abroad, such as copper concentrate, the actual market value shall be the world price quotations of the refined mineral products content thereof prevailing in the said commodity exchanges, after deducting the smelting, refining and other charges incurred in the process of converting the mineral concentrates into refined metal traded in those commodity exchanges.
 
On minerals and mineral products sold or consigned abroad, the actual cost of ocean freight and insurance shall be deducted from the tax base.

 

E. AUTOMOBILES AND OTHER MOTOR VEHICLES

NET MANUFACTURER'S PRICE/IMPORTER'S SELLING PRICE TAX RATES (RA 10963 (TRAIN Law)
OVER
UP TO
RATE
0
Php600,000
4%
Php600,000
Php1,000,000
10%
Php1,100,000
Php4,000,000
20%
Php4,000,000
over
50%

 

F. NON-ESSENTIAL GOODS

    • Twenty percent (20%) based on the wholesale price or the value of importation used by the Bureau of Customs in determining Tariff and Customs Duties, net of Excise and Value-Added taxes

 

G. SWEETENED BEVERAGES (RA 10963-TRAIN Law) 

PRODUCT
TAX RATE
Per Liter of Volume Capacity
Using purely caloric sweeteners, and purely non-caloric sweeteners, or a mix of caloric and non-caloric sweeteners
Php6.00
Using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener
Php12.00
Using purely coconut sap sugar and purely steviol glycosides
Exempt

 

H. INVASIVE COSMETIC PROCEDURES - (RA 10963-TRAIN Law)

SERVICE Tax Rate
Performance of Services on Invasive Cosmetic Procedures 5%

 


[return to index]


REVENUE ISSUANCES ON EXCISE TAXES

A. ALCOHOLPRODUCTS

RMO No. 1-2016
Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RMO NO. 14-2014
Guidelines and procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes
RMC NO. 18-2013
Further Clarifying the Taxability of Distilled Spirits Provided under Revenue Memorandum Circular No. 3-2013
RMC NO. 10-2013
Transition Procedures for all Electronic Filing and Payment System (eFPS) Filers in Filing Tax returns Affected by the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the provisions of Republic Act No. 10351, “An Act Restructuring the Excise Tax on Alcohol and Tobacco Products by Amending Sections 141, 142, 143, 144, 145, 8, 131 and 288 of Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code of 1997, as Amended by republic Act No. 9334, and for Other Purposes
RMC NO. 3-2013
Clarifying Certain Provisions of Revenue Regulations No. 17-2012 Implementing the Provisions of Republic Act No. 10351 as well as the Provisions of Revenue Memorandum Circular No. 90-2012 Providing the Initial Tax Classifications of Alcohol and Tobacco Products
 RMC NO. 90-2012
Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act No. 10351
 RR NO. 17-2012
Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the Provisions of Existing Revenue Regulations
RMC NO. 26-2006
Clarifying Certain Provisions of Revenue Regulations (RR) No. 3- 2006, More Particularly on the Printing Requirements of Section 23 thereof.
RR NO. 3-2006
Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products pursuant to the Provisions of Republic Act No. 9334, and Clarifying Certain Provisions of Existing Revenue Regulations Relative Thereto
RMO NO. 38-2003
Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO NO. 35-2002
Prescribing the Guidelines and procedures in the Processing and Issuance of Authority to Release Imported Goods (ATRIG) for Excise and Value-Added Tax Purposes
RR NO. 2-97
Revenue Regulations Governing Excise Taxation on Distilled Spirits, Wines and Fermented Liquors

 B. TOBACCO PRODUCTS

RR NO. 3-2018
Providing for the Revised Tax Rates on Tobacco Products Pursuant to the Provisions of Republic Act No. 10963, otherwise known as "Tax Reform for Acceleration and Inclusion (TRAIN) Law"', Amending for the Purpose Revenue Regulations No. 17-2012
RR NO. 6-2017
Amending Certain Provisions of Revenue Regulations No. 7-2014 Prescribing the Affixture of Internal Revenue Stamps on Imported and Locally Manufactured Cigarettes and the Use of the Internal Revenue Stamp Integrated System (IRSIS) for the Ordering, Distribution and Monitoring Thereof.
RMC NO. 1-2017
Clarification on Section 2(c) of Revenue Regulations (RR) No.7-2014 On the Colors of Cigarette Tax Stamps Relative to the Implementation of the Unitary Excise Tax Rate under RR No. 17-2012
RMO No. 33-2016
Prescribes the uniform procedures for the implementation of Internal Revenue Stamp Integrated System (IRSIS)
RMO No. 30-2016
Prescribes the guidelines, policies and procedures for replacement of spoiled/bad order and factory defected internal revenue stamps under the Internal Revenue Stamps Integrated System (IRSIS)
RMC NO. 51-2016
Availability of Mobile Application to Authenticate Internal Revenue Stamps on Cigarettes
RMC No. 23-2016
Publishes the full text of Implementing Rules and Regulations of Republic Act No. 10643 entitled "An Act to Effectively Instill Health Consciousness Through Graphic Health Warnings on Tobacco Products"
RMC No. 68-2016
Informs all taxpayers and others concerned of the new and upgraded internal revenue stamp design for cigarette products
RMO No. 1-2016
Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RR No. 9-2015
Amends Section 9 of RR No. 7-2014 relative to the affixture of internal revenue stamps on imported and locally-manufactured cigarettes and the use of the Internal Revenue Stamp Integrated System (IRSIS)
RMO NO. 14-2014
Guidelines and procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes
RMC No. 89-2014
Clarifies the implementation of the increase in Excise Tax rates on locally-manufactured cigarettes effective January 1, 2015 in relation to the new Internal Revenue Stamps
RR NO. No. 9-2014
Further amends the provisions of RR No. 7-2014, specifically the deadlines prescribed under Section 13 thereof
RR No. 8-2014
Amends the provisions of RR No. 7-2014, specifically the deadlines prescribed under Section 13 thereof
RR No. 7-2014
Prescribes the affixture of Internal Revenue Stamps on imported and locally manufactured cigarettes and the use of the Internal Revenue Stamp Integrated System (IRSIS) for the ordering, distribution and monitoring thereof
RMO NO. 23-2013
Guidelines and Procedures for the Implementation of the Electronic Official Register Book (eORB) System
RMC NO. 10-2013
Transition Procedures for all Electronic Filing and Payment System (eFPS) Filers in Filing Tax returns Affected by the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the provisions of Republic Act No. 10351, “An Act Restructuring the Excise Tax on Alcohol and Tobacco Products by Amending Sections 141, 142, 143, 144, 145, 8, 131 and 288 of Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code of 1997, as Amended by republic Act No. 9334, and for Other Purposes
RR NO. 3-2013
Prescribing the Use of Electronic Official Register Book for Manufacturers of Tobacco Products and Regulated Raw Materials
RMC NO. 3-2013
Clarifying Certain Provisions of Revenue Regulations No. 17-2012 Implementing the Provisions of Republic Act No. 10351 as well as the Provisions of Revenue Memorandum Circular No. 90-2012 Providing the Initial Tax Classifications of Alcohol and Tobacco Products
RMCNO.  90-2012
Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act No. 10351
RR NO. 17-2012
Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the Provisions of Republic Act No. 10351 and to Clarify Certain Provisions of Existing Revenue Regulations.
RMC NO. 26-2006
Clarifying Certain Provisions of Revenue Regulations (RR) No. 3- 2006, More Particularly on the Printing Requirements of Section 23 thereof.
RR NO. 3-2006
Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products pursuant to the Provisions of Republic Act No. 9334, and clarifying certain provisions of existing Revenue Regulations thereto.
RMO NO. 38-2003
Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO NO. 35-2002
Prescribing the Guidelines and Procedures in the Processing and Issuance of Authority to Release Imported Goods (ATRIG) for Excise and Value-Added Tax Purposes
RR NO. 1-97
Revenue Regulations governing the Excise Taxation of Cigars and Cigarettes

 C. PETROLEUM PRODUCTS 

RR NO. 2-2018
Providing for the Revised Tax Rates and other Implementing Guidelines on Petroleum Products Pursuant to Republic Act. No. 10963, otherwise known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law”
RMC NO. 38-2017
Circularizing the Full Text of the Decision of the Supreme Court dated November 29, 2016 in the case of Secretary of Finance Cesar B. Purisima and Commissioner of Internal Revenue Kim S. Jacinto-Henares Vs. Representative Carmelo F. Lazatin and Ecozone Plastic Enterprises Corporation with G.R. No. 210588
RMO No. 1-2016
Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RMC NO. 50-2014
Reiteration and Clarification on the Requirement of Issuance of Withdrawal Certificate for Every Removal of Petroleum or Petroleum Products
RMO NO.14-2014
Guidelines and procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes
RR NO. 2-2012
Tax Administration Treatment of Petroleum and Petroleum Products Imported into the Philippines Including those Coming in Through Freeport Zones and Economic Zones and Registration of All Storage Tanks, Facilities, Depots and Terminals
RR NO. 3-2008
Amending Certain Provisions of Existing Revenue Regulations on the Granting of Outright Excise Tax Exemption on Removal of Excisable Articles Intended for Export or Sale/Delivery to International Carriers or to Tax-Exempt Entities/Agencies and Prescribing the Provisions for Availing Claims for Product Replenishment
RR NO. 8-2006
Prescribing the Implementing Guidelines on the Taxation and Monitoring of the Raw Materials Used and the Bioethanol-Blended Gasoline (E-Gasoline) Produced under the Fuel Bioethanol Program of the Department of Energy (DOE)
RMO 38-2003
Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO 35-2002
Prescribing the Guidelines and procedures in the Processing and Issuance of Authority to Release Imported Goods (ATRIG) for Excise and Value-Added Tax Purposes
RR NO. 8-96
An Act Restructuring the Excise Tax on Petroleum Products, Reclassifying Natural Gas and Liquefied Natural Gas under Non-Metallic Mineral and Quarry Resources and Reducing the Excise Tax on Indigenous Petroleum
RR NO. 13-77
Petroleum Products Regulations

D. MISCELLANEOUS ARTICLES

D.1   AUTOMOBILES

RR  NO. 24-2018
Further Amending Section 9 of Revenue Regulations No. 25-2003 Relative to the Determination by the Department of Energy Whether the Automobiles Subject to Excise Tax Exemption are Hybrid or Purely Electric Vehicles pursuant to the Provisions of Republic Act No. 10963, Otherwise known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law
RR  NO. 5-2018
Revenue Regulations Implementing the Adjustment of Rates on the Excise Tax on Automobiles pursuant to the Provisions of Republic Act No. 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law" Amending for the Purpose Revenue Regulations No. 25-2003
RR NO. 4-2017
Amending Certain Provisions of Revenue Regulations No. 2-2016
RR No. 2-2016
Prescribes the guidelines and procedures in the issuance of Authority to Release Imported Goods (ATRIGs) for imported automobiles already released from customs custody
RR No. 4-2016
Extends the deadline for the issuance of Authority to Release Imported Goods (ATRIGs) for automobiles already released from customs custody until April 30, 2016
RMO No. 12-2016
Prescribes the policies, guidelines and procedures in the manual issuance of Authority to Release Imported Goods (ATRIG) for imported automobiles already released from the custody of Bureau of Customs pursuant to RR No. 2-2016 
RMO No. 1-2016
Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RMO NO. 14-2014
Guidelines and Procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes
RMO NO. 21-2013
Amending the Provisions of Revenue Memorandum Order (RMO) No. 35-2002, as Amended by RMO No. 20-2006 Prescribing the Guidelines and Procedures in the Processing and Issuance of Authority to Release Imported Goods (ATRIG) for Excise Tax Purposes
RMO NO. 20-2006
Amendment to Certain Sections of RMO No. 35-2002
RMC NO. 60-2003
Clarifying Certain Issues Raised Relative to the Implementation of Revenue Regulations No. 25-2003 Governing the Imposition of Excise Tax on Automobiles Pursuant to Republic Act No. 9224
RR NO. 25-2003
Amended Revenue Regulations Governing the Imposition of Excise Tax on Automobiles pursuant to the Provisions of Republic Act No. 9224, an Act Rationalizing the Excise Tax on Automobiles, Amending for the Purpose the NIRC of 1997, and for Other Purposes
RR NO. 4-2003
Amending Certain Section of Revenue Regulations No. 14-97, as Amended by Revenue Regulations No. 14-99, Otherwise Known as the Revenue Regulations Governing the Imposition of Excise Tax on Automobiles
RMO NO. 38-2003
Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO NO. 35-2002
Prescribing the Guidelines and Procedures in the Processing and Issuance of AUTHORITY TO RELEASE IMPORTED GOODS (ATRIG) for Excise and Value-Added Tax Purposes
RR NO. 14-99
Amending Section 2 of Revenue Regulations No. 14-97 Otherwise known as Revenue Regulations Governing the Imposition of Excise Taxes on Automobiles and Other Motor Vehicles
RR NO. 14-97
Revenue Regulations Governing the Imposition of Excise Tax on Automobiles and Other Motor Vehicles

D2. NON ESSENTIAL GOODS (Jewelries, Perfumes and Toilet Waters, Yachts and Other Vessels for Pleasure and Sports

RMO No. 1-2016
Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RMO NO. 14-2014
Guidelines and Procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes
RMC NO. 33-2004
Revised Rules and Regulations Implementing Republic Act No. 8502, Otherwise Known As, The “Jewelry Industry Development Act Of 1998”
RMO NO. 38-2003
Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO NO. 35-2002
Prescribing the Guidelines and Procedures in the Processing and Issuance of Authority to Release Imported Goods (ATRIG) for excise and Value-Added Tax Purposes
RMC NO. 17-2002
Green Cross Baby Cologne and all Other Cologne Products
RR NO. 1-99
Rules and Regulations implementing the Tax Incentives Provided under Section 3 (b) and (d) of Republic Act No. 8502 otherwise known as the “Jewelry Industry Development Act of 1998”
RR NO. 8-84
Cosmetic Products Regulations

 

D.3  SWEETENED BEVERAGES

RR NO. 20-2018

Prescribing the Implementing Rules and Guidelines on the Imposition of Excise Tax on Sweetened Beverages Pursuant to Section 47 of Republic Act No. 10963 otherwise known as the “Tax Reform  Acceleration and Inclusion (TRAIN) Law”.

 

 D.4   NON-ESSENTIAL SERVICES

RR No. 2-2019 Rules and Regulations Implementing the Imposition of Excise Tax on Non-Essential Services Introduced by Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law

 

E. MINERAL PRODUCTS

RMC No. 6-2019
Clarifying the Provisions of Revenue Memorandum Circular No. 105-2018 Pertaining to the submission of Alphabetical List of First Buyer/Possessor of Locally Produced Coal from Whom Excise Taxes Due on Coal Were Collected by the Producer Acting as Collecting Agent For Remittance to the Bureau of lnternal Revenue (BlR)
RR NO. 1-2018
Providing for the Revised Tax Rates on Mineral Products pursuant to the Provisions of Republic Act No. 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law" Amending for the Purpose Revenue Regulations No. 13-94
RMO No. 1-2016
Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RMO NO. 14-2014
Guidelines and Procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes
RR NO. 7-2008
Taxation on the Sale to the Bangko Sentral ng Pilipinas of Gold and Other Metallic Mineral Products Extracted or Produced by Small-scale Miners and further Amending Section 2.57.2 (t) of Revenue Regulations No. 2-98, as amended
RMO NO. 38-2003
Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO NO. 35-2002
Prescribing the Guidelines and Procedures in the Processing and Issuance of Authority to Release Imported Goods (ATRIG) for excise and Value-Added Tax Purposes
RR NO. 8-96
An Act Restructuring the Excise Tax on Petroleum Products, Reclassifying Natural Gas and Liquefied Natural Gas under Non-Metallic Mineral and Quarry Resources and Reducing the Excise Tax on Indigenous Petroleum
RR NO. 13-94
Revenue Regulations Governing the Imposition of Excise Tax on Minerals and Mineral Products

 F. OTHER ISSUANCES FOR EXCISABLE PRODUCTS

RMO No. 4-2019 Creation of Alphanumeric Tax Code (ATC) for Selected Excise Taxes on Exports Paid through Payment Form – BIR Form No. 0605
OM2018-01-03/Annex A/Annex B1/Annex B2/Annex B3/Annex C1/Annex C2/Annex C3/Annex D Transitory guidelines relative to the implementation of TRAIN Law governing Excise Tax on petroleum products, automobiles and sweetened beverages, pending the issuance of the Implementing Rules and Regulations.
RMO NO. 16-2018 Modification of Alphanumeric Tax Code (ATC) for Sweetened Beverages
RMO NO. 1-2018 Creation of Alphanumeric Tax Code (ATC) for Sweetened Beverages
RMC NO. 4-2018 Transition Procedures for All Electronic Filing and Payment System (eFPS) Filers in Filing Tax Return Affected by the Revised Tax Rates on Excisable Articles Pursuant to the Provisions of Republic Act (RA) No. 10963, Otherwise Known as the Tax Reform for Acceleration and Inclusion (TRAIN), specifically Sections 42,43, 45, 46, 47, and 48 thereof, governing excise tax on Cigars and Cigarettes, Petroleum Products, Automobiles, Non-essential Services (Invasive Cosmetics Procedures), Sweetened Beverages, and Mineral Products, respectively
 RMC No. 104-2017 Circularizes the copy of RA No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Act) and President Duterte's VETO message to the TRAIN ACT
 RMO No. 16-2017 Amends certain provisions of RMO No. 5-2004 particularly on the application, processing and issuance of ATRIG on importation of wheat by millers and traders relative to the advance payment of Value-Added Tax on the sale of flour
 RMC No. 2-2015 Informs taxpayers relative to the availability of certain Annual Income Tax and Excise Tax Returns in Offline eBIRForms Package, which could be submitted thru the eFPS
 RMC No. 74-2014 Announces the availability of BIR Form Nos. 2200-A (Excise Tax Return for Alcohol Products) and 2200-T (Excise Tax Return for Tobacco Products) in Electronic Filing and Payment System and Electronic Bureau of Internal Revenue Forms Offline Package
 RR No. 10-2014 Amends further Section 3 of RR No. 9-2001, as amended, expanding the coverage of taxpayers required to file and pay taxes through the Electronic Filing and Payment System (eFPS)
 RMO No. 17-2013 Creates, modifies and drops Alphanumeric Tax Code on Excise Tax pursuant to Republic Act No. 10351, “An Act Restructuring the Excise Tax on Alcohol and Tobacco Products” as Implemented by Revenue Regulations No. 17-2012 

G. TAX ADVISORIES ON EXCISE TAXES

DATE PARTICULARS
May 18, 2018 Please be advised that starting May 18,2018, all concerned excise taxpayers who will be paying excise tax on Invasive Cosmetic Procedures shall use BIR Form No. 0605 - Payment Form indicating therein-ATC Code "XC010" and Tax Type “XC". Accordingly, the BIR Form No. 1620-XC - Final Withholding of Excise Tax on Invasive Cosmetic Procedures together with the assigned Alphanumeric Tax Code (ATC) of "WI800" for individual and "WC800" for corporate as prescribed under Revenue Memorandum Order No. 9-2018 dated January 4, 2018 will be replaced with BIR Form No. 2200-C - Excise Tax on Invasive Cosmetic Procedures. A separate advisory on this effect shall be issued as soon as BIR Form No. 2200-C - Excise Tax on Cosmetic Procedures is available for use.This Advisory is being issued to amend Memorandum dated January 5, 2018 and Revenue Memorandum Circular No. 4-2018 dated January 8,2018 on the use of BIR Form No. 1620-XC - Final Withholding of Excise Tax on Invasive Cosmetic Procedures.
  Advisory on dedicated e-mail account for attachment to Excise Tax Return BIR Form No. 2200-S (for sweetened beverages) and BIR Form No. 1620-XC (for cosmetic procedures)
OM No. 2018-01-01 Taxpayers subject to Excise Tax and using eFPS are mandated to e-file and e-pay the corresponding Excise Taxes due on removals, effective January 1, 2018.
OM No. 2017-12-06 Payment Form for Excise Tax due on sweetened beverages.
RMO No. 29-2018 Creation of Alphanumeric Tax Code (ATC) for Selected Excise Taxes under Republic Act (RA) No. 10963, otherwise known as Tax Reform for Acceleration and Inclusion (TRAIN) Act

 


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 H. CODAL REFERENCE:

PARTICULAR
SECTION IN THE NIRC OF 1997, AS AMENDED
ALCOHOL PRODUCTS
141-143
TOBACCO PRODUCTS
144-147
PETROLEUM PRODUCTS
148
MISCELLANEOUS ARTICLES
149-150
MINERAL PRODUCTS
151
SWEETENED BEVERAGES
150(B)-TRAIN LAW
INVASIVE COSMETIC PROCEDURES
150(A)-TRAIN LAW


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Index for Withholding Tax

 


CODAL REFERENCE AND RELATED ISSUANCES

Republic Act Nos. 8424, 9337, 9442, 9504, 10963

Sections 57 to 58 and 78 to 83 of the National Internal Revenue Code (NIRC)

Revenue Regulation Nos. 2-98, 17-2003, 30-2003, 10-2008, 11-2018

Revenue Memorandum Circular Nos. 72-2004, 91-2010, 50-2018, 51-2018


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IMPORTANCE OF WITHHOLDING TAX SYSTEM

It is considered as an effective tool in the collection of taxes for the following reasons:

  • It encourages voluntary compliance;
  • It reduces cost of collection effort;
  • It prevents delinquencies and revenue loss; and
  • It prevents dry spell in the fiscal conditions of the government by providing revenues throughout the taxable year.

 


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PERSONS REQUIRED TO WITHHOLD WITHHOLDING TAXES

  • Individuals engaged in business or practiced of profession
  • Non-individuals (corporations, associations, partnertship, cooperatives) whether engaged in business or not
  • Government agencies and its instrumentalities (National Government Agentcies (NGAs), Government-owned or Controlled Corporations (GOCCs), Local Government Units including Baranggays (LGUs

A WITHHOLDING AGENT - is any person or entity who is in control of the payment subject to withholding tax and therefore is required to deduct and remit taxes withheld to the government.

 


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CLASSIFICATION OF WITHHOLDING TAXES

  • Creditable withholding tax   
  1. Compensation - is the tax withheld from income payments to individuals arising from an employer-employee relationship.
  2. Expanded - is a kind of withholding tax which is prescribed on certain income payments and is creditable against the income tax due of the payee for the taxable quarter/year in which the particular income was earned.
  3. Withholding Tax on GMP - Value Added Taxes (GVAT) - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to VAT registered taxpayers/suppliers/payees on account of their purchases of goods and services.
  4. Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs) and  instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to non-VAT registered taxpayers/suppliers/payees
  • Final Withholding Tax is a kind of withholding tax which is prescribed on certain income payments and is not creditable against the income tax due of the payee on other income subject to regular rates of tax for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the particular income subjected to final withholding tax.

 


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WITHHOLDING TAX ON COMPENSATION

Compensation or Wages - refers to all remuneration for services performed by an employee for his employer under an employee-employer relationships unless exempted by the NIRC and pertinent laws.

KINDS OF COMPENSATION

  • Regular
  1. Basic Salary
  2. Fixed allowances
  • Supplmentary
  1. Commission
  2. Overtime pay
  3. Fees, including directors fees
  4. Profit sharing
  5. Monetized vacation leave in excess of ten (10) days
  6. Sick leave
  7. Fringe benefits received by rank and file employees
  8. Hazard pay
  9. Taxable 13th month pay and other benefits
  10. Other remuneration received from an employee-employer relationships

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RESPONSIBILITIES OF THE EMPLOYER

  • Submit the duly accomplished BIR Form Nos. 1902 and/or 1905 to the RDO within thirty (30) days from receipt;
  • Withhold the tax due from the employees following the prescribed manner;
  • Remit the amount of tax withheld from the employee within the prescribed due dates;
  • Do the year-end adjustment;
  • Submit Annual Information return (BIR Form 1604-C, 1604-F and 1604-E), including the required alphabetical list of employees/payees on or before January 31 following the close of the calendar year;
  • Issue the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) to the employees; and
  • Refund excess tax withheld.

 


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EXEMPTIONS AND EXCLUSIONS FROM GROSS INCOME

  1. Remuneration received as an incident of employment (RA 7641; those with approved reasonable private retirement plan; Social Security Act of 1954, as amended; GSIS Act of 1937, as amended; and etc.
  2. Remuneration paid for agricultural labor;
  3. Remuneration for domestic services;
  4. Remuneration for casual labor not in the course of an employer's trade or business;
  5. Compensation for services by a citizen or a resident of the Philippines for a foreign government or international organization;
  6. Damages (Actual, moral, exemplary and nominal);
  7. Life insurance;
  8. Amounts received by the insured as a return of premium;
  9. Compensation for injuries or sickness;
  10. Income exempt under treaty
  11. 13th Month pay and other benefits
  12. GSIS, SSS, Medicare and other contributions (employee's share only)
  13. Compensation income of minimum wage earners (MWEs) who work in the private sector and being paid the Statutory Minimum Wage (SMW), as fixed by the Regional Tripartite Wage and Productivity Board (RTWPB)/National Wages Productivity Commission (NWPC), applicable to the place where he/she is assigned;
  14.  Compensation income of employees in the public sector with compensation income of not more the the SMW in the non-agricultural sector as fixed by the RTWPB?NWPC applicable to the place where he/she is assigned.
  15. De Minimis benefits
  16. Fringe benefits given to employees other than rank and file and subjected to Fringe Benefit Tax (FBT);
  17. Personnel Economic Relief Allowance (PERA) given to government employees; and Representation and transportation allowance (RATA granted to public officers and employees under the General Appropriations Act.

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MINIMUM WAGE EARNERS

No withholding tax shall be required on the Statutory Minimum Wage (SMW) of the Minimum Wage earner in the private/public sectors as defined in RR 2-98, as amended by RR 11-2018, including:

  • Holiday pay
  • Overtime pay
  • Night shift differential
  • Hazard pay

of Minimum Wage earners in the private/public sectors as defined by these Regulations.


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DE MINIMIS BENEFITS NOT SUBJECT TO WITHHOLDING TAX

  1. Monetized unused vacation leave credits to employees not exceeding ten (10) days during the year;
  2. Monetized value of vacation and sick leave credits paid to government officials and employees;
  3. Medical cash allowance to dependents of employees, not exceeding P1,500 per employee per semester of P250 per month;
  4. Rice subsidy of P2,000 or one sack of 50kg rice per month amounting to not more than P2,000;
  5. Uniform and clothing allowance not exceeding P6,000 per annum;
  6. Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding P10,000.00 per annum;
  7. Laundry allowance not exceeding P300 per month;
  8. Employees achievement awards, e.g. for length of service or safety achievement, which in the form of a tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
  9. Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum;
  10. Daily meal allowance for overtime work not exceeding twenty five percent (25%) of the basic minimum wage;
  11. Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed ten thousand pesos (Php 10,000.00)per employee per taxable year;

 

 


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WITHHOLDING TAX TABLE

 REVISED WITHHOLDING TAX TABLE
Effective January 1, 2018 to December 31, 2022 
DAILY 1 2 3 4 5 6
Compensation Range  P685 and below P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Prescribed Withholding Tax 0.00 0.00 +20% over P685 P82.19 +25% over P1,096 P356.16 +30% over P2,192 P1,342.47 +32% over P5,479 P6,602.74 +35% over P21,918
WEEKLY 1 2 3 4 5 6
Compensation Range P4,808 and below P4,808 - P7,691 P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
Prescribed Withholding Tax 0.00 0.00 +20% over P4,808 P576.92 +25% over p7,692 P2,500.00 +30% over p15,385 P9,423.08 +32% over P38,462 P46,346.15 +35% over P153,846
SEMI-MONTHLY 1 2 3 4 5 6
Compensation Range P10,417 and below P10,417 - P16,666 P16,667 - P33,332 P33,333 - P83,332 P83,333 - P333,332 P333,333 and above
Prescribed Withholding Tax 0.00 0.00 +20% over P10,417 P1,250.00 +25% over P16,667 P5,416.67 +30% over P33,333 P20,416.67 +32% over P83,333 P100,416.67 +35% over P333,333
MONTHLY 1 2 3 4 5 6
Compensation Range P20,833 and below P20,833 - P33,332 P33,333 - P66,666 P66,667 - P166,666 P166,667 - P666,666 P666,667 and above
Prescribed Withholding Tax 0.00 0.00 +20% over P20,833 P2,500.00 +25% over 33,333 P10,833.33 +30% over P66,667 P40,833.33 +32% over P166,667 P200,833.33 +35% over P666,667  
 REVISED WITHHOLDING TAX TABLE
Effective January 1, 2023 and onwards
DAILY 1 2 3 4 5 6
Compensation Range  P685 and below P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Prescribed Withholding Tax 0.00 0.00 +15% over P685 P82.19 +20% over P1,096 P356.16 +25% over P2,192 P1,342.47 +30% over P5,479 P6,602.74 +35% over P21,918
WEEKLY 1 2 3 4 5 6
Compensation Range P4,808 and below P4,808 - P7,691 P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
Prescribed Withholding Tax 0.00 0.00 +15% over P4,808 P576.92 +20% over p7,692 P2,500.00 +25% over p15,385 P9,423.08 +30% over P38,462 P46,346.15 +35% over P153,846
SEMI-MONTHLY 1 2 3 4 5 6
Compensation Range P10,417 and below P10,417 - P16,666 P16,667 - P33,332 P33,333 - P83,332 P83,333 - P333,332 P333,333 and above
Prescribed Withholding Tax 0.00 0.00 +15% over P10,417 P1,250.00 +20% over P16,667 P5,416.67 +25% over P33,333 P20,416.67 +30% over P83,333 P100,416.67 +35% over P333,333
MONTHLY 1 2 3 4 5 6
Compensation Range P20,833 and below P20,833 - P33,332 P33,333 - P66,666 P66,667 - P166,666 P166,667 - P666,666 P666,667 and above
Prescribed Withholding Tax 0.00 0.00 +15% over P20,833 P2,500.00 +20% over 33,333 P10,833.33 +25% over P66,667 P40,833.33 +30% over P166,667 P200,833.33 +35% over P666,667   

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ANNUAL TAX TABLE

EFFECTIVE DATE JANUARY 1, 2018 to DECEMBER 31, 2022 
Not over P250,000 0%
Over P250,000 but not over P400,000 20% of the excess over P250,000
Over P400,000 but not over P800,000 P30,000 + 25% of the excess over P400,000
Over P800,000 but not over P2,000,000 P130,000 + 30% of the excess over P800,000
Over P2,000,000 but not over P8,000,000 P490,000 + 32% of the excess over P2,000,000
Over P8,000,000 P2,410,000 + 35% of the excess over P8,000,000
EFFECTIVE DATE JANUARY 1, 2023
Not over P250,000 0%
Over P250,000 but not over P400,000 15% of the excess over P250,000
Over P400,000 but not over P800,000 P22,500 + 20% of the excess over P400,000
Over P800,000 but not over P2,000,000 P102,500 + 25% of the excess over P800,000
Over P2,000,000 but not over P8,000,000 P402,500 + 30% of the excess over P2,000,000
Over P8,000,000 P2,202,500 + 35% of the excess over P8,000,000

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YEAR-END-ADJUSTMENT

On or before the calendar year and prior to the payment of the compensation for last payroll period, the employer shall determine the sum of the taxable regular and supplementary compensation paid to each employee for the whole year and must ensure that the tax due is equal to tax withheld.

ANNUALIZED WITHHOLDING TAX FORMULA

Gross Compensation Income (present + previous employer)                                                         Px x x x 

Less: Non-Taxable/Exempt Compensation Income

  1. 13th month pay and other benefits                                         P90,000.00
  2. SSS, GSIS, PHIC, HDMF and union dues (employee share)          x x x x x x
  3. Other Non-Taxable salaries (P250,000)                                     x x x x x x                          x x x x 

Taxable Compensation Income                                                                                                  Px x x x

Tax Due                                                                                                                                  P x x x x

Less: Tax Withheld (January to November/termination date)                                                         P x x x x 

Tax to be withheld for December/last payroll period                                                                     Px x x  x

Collectible : Tax Due> tax withheld  - collect before payment of last salary

Refund:      Tax Due< tax withheld -  refund on or before January 25th of the year/ last payment of salary

Break even:  Tax due = tax withheld    - no more withholding for December salary


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WITHHOLDING TAX FORMS

WITHHOLDING TAX FORMS DESCRIPTION
REGISTRATION FORM  
BIR FORM NO. 1901 Application for Registration for Self-Employed and Mixed Income Individuals, Estates and Trusts
BIR FORM NO. 1902 Application for Registration for Individuals Earning Purely Compensation Income and Non-Residnet Citizens/Resident Alien Employee
BIR FORM NO. 1903 Application for Registration for Corporations/Partnerships (Taxable/Non-Taxable), including GAIs and LGUs
BIR FORM NO. 1904 Application for Registration for One-time Taxpayer and Persons Registering under E.O. 98 (Securing a TIN to be able to transact with any government office)
BIR FORM NO. 1905 Application for Information Update
PAYMENT FORM  
BIR FORM NO. 0605 Payment form
BIR FORM NO. 0619-E Monthly Remittance Form of Creditable Income Taxes Withheld (Expanded)
BIR FORM NO. 0619-F Monthly Remittance Form of Final Income Taxes Withheld 
REMITTANCE FORM  
BIR FORM NO. 1600-VT Monthly Remittance Return of Value-Added Tax 
BIR FORM No. 1600-PT Monthly Remittance Return of Percentage Tax 
BIR FORM NO. 1600WP Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators
BIR FORM NO. 1601-C Monthly Remittance Return of Income Taxes Withheld on Comnpensation
BIR FORM NO. 1601-EQ Quarterly Remittance Return of Creditable Income Taxes withheld (Expanded)
BIR FORM NO. 1601-FQ

Quarterly Remittance Return of Final Income Taxes Withheld

BIR FORM NO. 1602-Q Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits and Deposits Substitutes/Trusts/Etc.
BIR FORM NO. 1603-Q Quarterly Remittance Return of Final Income Taxes Withheld on Fringe benefits Paid to Employees Other Than Rank and File
CERTIFICATES  
BIR FORM NO. 2304 Certificate of Income Payment Not Subject to Withholding Tax (Excluding Compensation Income)
BIR FORM NO. 2306 Certificate of Final Tax Withheld at Source
BIR FORM NO. 2307 Certificate of Creditable Tax Withheld at Source
BIR FORM NO. 2316 Certificate of Compensation Payment/Tax Withheld

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MODE OF FILING AND PAYMENT

WITHHOLDING TAX FORMS DUE DATE  
eFPS Manual/EBIRForms
PAYMENT FORM    
BIR FORM NO. 0605    
BIR FORM NO. 0619-E

Filing - see Schedule in RR 26-2002

Payment - on or before the fiftenth (15th) day of the following month

on or before the tenth (10th) day following the close of the month
BIR FORM NO. 0619-F
REMITTANCE FORM    
BIR FORM NO. 1600-VT on or before the tenth (10th) day following the close of the month on or before the tenth (10th) day following the close of the month 
BIR FORM NO. 1600-PT
BIR FORM NO. 1600WP
BIR FORM NO. 1601-C

Filing - see Schedule in RR 26-2002

Payment - on or before the fiftenth (15th) day of the following month 

BIR FORM NO. 1601-EQ last day of the month following the close of the quarter    last day of the month following the close of the quarter 
BIR FORM NO. 1601-FQ
BIR FORM NO. 1602-Q
BIR FORM NO. 1603-Q

SCHEDULE OF STAGGERED FILING

Filing via eFPS
Group A - Fifteen (15) days following the end of the month
Group B - Fourteen (14) days following the end of the month
Group C - Thirteen (13) days following the end of the month
Group D - Twelve (12) days following the end of the month
Group E -  Eleven (11) days following the end of the month

Note: The staggered manner of filing is only allowed to taxpayers using the Electronic Filing and Payment System (EFPS) based on the industry classification groupings per RR No. 26-2002.

However, the staggered filing of returns allowed for withholding agents/taxpayers enrolled in the EFPS facility of the Bureau shall not apply in the case of the NGAs per RR 1-2013.


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SUBSTITUTED FILING

An individual taxpayer will no longer have to personally file his own Income Tax Return (BIR Form 1700) but instead the employer's Annual Information Return on Income Taxes Withheld (BIR Form No. 1604-C) filed will be considered as the "substitute" ITR of the employee.

REQUISITES FOR INDIVIDUALS QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700

  1. Receives purely compensation income regardless of amount;
  2. Compensation from only one employer in the Philippines for the calendar year;
  3. Income tax has been withheld correctly by the employer (tax due equals tax withheld);
  4. the employee's spouse also complies with all the three conditions stated above;
  5. Employer files the BIR Form No. 1604-C; and
  6. The employer issues each employee BIR Form No. 2316 (latest version)

NOTE:

All the above requisites must be present. The annual Information Return of Income Taxes Withheld on Compensation (BIR Form No. 1604-C) filed by their respective employers filed their respective employers duly submitted to the eSubmission facility of the BIR.

REQUISITES FOR INDIVIDUALS NOT QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700

  1. Individuals with two or more employers concurrently and/or successively at anytime during the taxable year.
  2. Employees whose income tax have not been withheld correctly resulting to collectible or refundable return.
  3. Individuals deriving other non-business, non-profession-related income in addition to compensation income not otherwise subject to final tax.
  4. Individuals receiving purely compensation income from a single employer whose income tax has been correctly withheld but whose spouse does not qualify tor substituted filing.
  5. Non-resident aliens engaged in trade or business in the Philippines deriving purely compensation income or compensation income and other non-related business, non-profession-related income.

SUBMISSION OF BIR FORM NO. 2316 

The employer are required to submit the duplicate original copy of BIR Form No. 2316 to the Revenue District Office where they are registered on or before February 28 

For Large Taxpayer or other Non-LT Taxpayers who opted to submit thru the Digital Versatile Disk (DVD) prescribed under RR2-2015 shall use Universal Storage BUS (USB) memory stick or other similar storage devices may be used in the absence or unavailability of the DVD's provided that the scanned copies of the said forms shall be made uneditable format.

For Large Taxpayer or Non-LT taxpayers shall use the prescribed format (Annex F) in RR 11-2018 for the preparation of the Certified List of Employees Qualified for Substituted Filing of ITR. 


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EXPANDED WITHHOLDING TAX

The Withholding of Creditable Tax at Source or simply called Expanded Withholding Tax is a tax imposed and prescribed on the items of income payable to natural or juridical persons, residing in the Philippines, by a payor-corporation/person which shall be credited against the income tax liability of the taxpayer for the taxable year.

Tax Rates

 TAX   TYPE   DESCRIPTION  TAX RATE  ATC
IND CORP
WE Professional fees (Lawyers, CPA's, Engineers, etc.)      
      - if the gross income for the current year did not exceed P3M  5%  WI010    
      - if gross income is more than 3M or VAT registered regardlessof amount 10% WI011  
WE Professional fees (Lawyers, CPA's, Engineers, etc.)      
      - if gross income for the current year did not exceed P720,000 10%    WC010 
      - if gross income exceeds P720,000 15%   WC011
WE Professional entertainer such as, but not limited to actors and actresses, singers, lyricist, composers, emcees      
      - if the gross income for the current year did not exceed P3M 5% WI020  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI021  
WE Professional entertainer such as, but not limited to actors and actresses, singers, lyricist, composers, emcees      
      - if gross income for the current year did not exceed P720,000 10%   WC020
      - if gross income exceeds P720,000 15%   WC021
WE Professional athletes including basketball players, pelotaris and jockeys      
      - if the gross income for the current year did not exceed P3M  5%  WI030  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI031  
WE Professional athletes including basketball players, pelotaris and jockeys      
      - if gross income for the current year did not exceed P720,000 10%   WC030
      - if gross income exceeds P720,000 15%   WC031
WE All directors and producers involved in movies, stage, television and musical productions      
      - if the gross income for the current year did not exceed P3M 5% WI040  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI041  
WE All directors and producers involved in movies, stage, television and musical productions      
      - if gross income for the current year did not exceed P720,000 10%   WC040
      - if gross income exceeds P720,000 15%   WC041
WE Management and technical consultants      
      - if the gross income for the current year did not exceed P3M 5%  WI050   
      - if gross income is more than 3M or VAT registered regardless of amount 10%  WI051   
WE Management and technical consultants      
      - if gross income for the current year did not exceed P720,000 10%   WC050
      - if gross income exceeds P720,000 15%   WC051
WE Business and Bookkeeping agents and agencies      
       - if the gross income for the current year did not exceed P3M 5% WI060  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI061  
WE Business and Bookkeeping agents and agencies      
       - if gross income for the current year did not exceed P720,000 10%   WC060
      - if gross income exceeds P720,000 15%   WC061
WE Insurance agents and insurance adjusters      
       - if the gross income for the current year did not exceed P3M 5% WI070  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI071  
WE Insurance agents and insurance adjusters      
      - if gross income for the current year did not exceed P720,000 10%   WC070
      - if gross income exceeds P720,000 15%   WC071
WE Other Recipients of Talent Fees      
      - if the gross income for the current year did not exceed P3M 5% WI080  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI081  
WE Other Recipients of Talent Fees      
      - if gross income for the current year did not exceed P720,000 10%   WC080
      - if gross income exceeds P720,000 15%   WC081
WE Fees of Director who are not employees of the company      
      - if the gross income for the current year did not exceed P3M 5% WI090  
      - if gross income is more than 3M or VAT registered regardless of amount 10% WI091  
WE Rentals Oon gross rental or lease for the continued use or possession of personal property in excess of P10,000 annually and real property used in business which the payor or obligor has not taken title or is not taking title, or in which has no equity; poles, satellites, transmission facilities and billboards 5% WI100 WC100
WE Cinemathographic film rentals and other payments to resident indivduals and corporate cinematographic film owners, lessors and distributors 5% WI110 WC110
WE Income payments to certain contractors 2% WI120 WC120
WE Income distribution to the beneficiaries of estate and trusts 15% WI130  
WE Gross Commission of service fees of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and real estate service practitioners (RESPs)(i.e. real estate consultants, real estate appraisers and real estate brokers      
       - if the gross income for the current year did not exceed P3M 5% WI139  
       - if gross income is more than 3M or VAT registered regardless of amount 10% WI140  
WE Gross Commission of service fees of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and real estate service practitioners (RESPs)(i.e. real estate consultants, real estate appraisers and real estate brokers      
     - if gross income for the current year did not exceed P720,000 10%   WC139
     - if gross income exceeds P720,000 15%   WC140
WE Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science & dentist)  by hospitals & clinics or paid directly by HMO and/or other semilar establishments      
     - if the gross income for the current year did not exceed P3M 5% WI151  
     - if gross income is more than 3M or VAT registered regardless of amount 10% WI150  
WE Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science & dentist)  by hospitals & clinics or paid directly by HMO and/or other semilar establishments      
     - if gross income for the current year did not exceed P720,000 10%   WC151
    - if gross income exceeds P720,000 15%   WC150
WE Payment by the General Professional Partnership (GPPs) to its partners      
     - if gross income for the current year did not exceed P720,000 10% WI152  
    - if gross income exceeds P720,000 15% WI153  
WE Income payments made by credit card companies 1% OF 1/2 of gross amount WI158 WC158
WE Additional Income Payments to govt personnel from importers, shipping and airline companies or their agents for overtime services 15% WI159  
WE Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of goods other than those covered by other rates of withholding tax 1% WI640  WC640 
WE Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of services other than those covered by other rates of withholding tax  2% WI157  WC157 
WE Income Payment made by top withholding agents to their local/resident suppliers of goods other than those covered by other rates of withholding tax 1% WI158 WC158
WE Income Payment made by top withholding agents to their local/resident suppliers of services other than those covered by other rates of withholding tax 2% WI160 WC160
WE Commissions, rebates, discounts and other similar considerations paid/granted to independent and/or exclusive sales representatives and marketing agents and sub-agents of companies, including multi-level marketing companies      
       - if the gross income for the current year did not exceed P3M 5% WI515 WC515
      -  if the gross income is more than P3M or VAT registered regardless of amount 10% WI516 WC516
WE Gross payments to embalmers by funeral parlors 1% WI530  
WE Payments made by pre-need companies to funeral parlors 1% WI535 WC535
WE Tolling fees paid to refineries 5% WI540 WC540
WE Income payments made to suppliers of agricultural supplier products in excess of cumulative amount of P300,000 within the same taxable year 1% WI610 WC610
WE Income payments on purchases of minerals, mineral products and quarry resources, such as but not limited to silver, gold, granite, gravel, sand, boulders and other mineral products except purchases by Bangko Sentral ng Pilipinas 5% WI630 WC630
WE Income payments on purchases of minerals, mineral products and quarry resources by Bangko Sentral ng Pilipinas ((BSP) from gold miners/suppliers under PD 1899, as amended by RA No. 7076 1% WI632 WC632
WE On gross amount of refund given by MERALCO to customers with active contracts as classified by MERALCO 15% WI650 WC650
WE On gross amount of refund given by MERALCO to customers with terminated contracts as classified by MERALCO 15% WI651 WC651
WE On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Residential and General Service customers whose monthly electricity consumption exceeds 200 kwh as classified by MERALCO 10% WI660 WC660
WE On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Non-Residential customers whose monthly electricity consumption exceeds 200 kwh as classified by MERALCO 10% WI661 WC661
WE On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Residential and General Service customers whose monthly electricity consumption exceeds 200 kwh as classified by other  by other electric Distribution Utilities (DU) 10% WI662 WC662
WE On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against customer's billings of Non-Residential customers whose monthly electricity consumption exceeds 200 kwh as classified by other electric Distribution Utilities (DU) 10% WI663 WC663
WE Income payments made by political parties and candidates of local and national elections on all their purchases of goods and services relkated to campaign expenditures, and income payments made by individuals or juridical persons for their purchases of goods and services intented to be given as campaign contribution to political parties and candidates 5% WI680 WC680
WE Income payments received by Real Estate Investment Trust (REIT) 1%   WC690
WE Interest income denied from any other debt instruments not within the coverage of deposit substitutes and Revenue Regulations 14-2012 15% WI710 WC710
WE Income payments on locally produced raw sugar 1% WI720 WC720

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FINAL WITHHOLDING TAX

          The amount of income tax withheld by the withholding agent is constituted as a full and final payment of income tax due from the payee of the said income.

          The liability for payment of tax rests primari;y on the payor as a withholding agent. Failure to withhold the tax or in case of under withholding, the deficiency tax shall be collected from payor/withholding agent.

          The payee is not required to file an income tax return for the particular income.

 TAX   TYPE  DESCRIPTION TAX RATE ATC
IND CORP
WF Interest on Foreign loans payable to Non-Resident Foreign Corporation (NRFCs)  20%    WC180
WF Interest and other income payments on foreign currency transactions/loans payable of Offshore Banking Units (OBUs) 10%     WC190 
WF Interest and other income payments on foreign currency transactions/loans payable of Foreign Currency Deposits Units (FCDUs) 10%     WC191
WF Cash dividend payment by domestic corporation to citizens ans residents aliens/NRFCs  10% W1202   
30%   WC212
WF Property dividend payment by domestic corporation to citizens and resident aliens/NRFCs 10% WI203  
30%   WC213
WF Cash dividend payment by domestic corporation to NFRCs whose countries allowed tax deemed paid credit (subject to tax sparing rule)  15%    WC222
  Property dividend payment by domestic corporation to NFRCs whose countries allowed tax deemed paid credit (subject to tax sparing rule) 15%   WC223
WF Cash dividend payment by domestic corporation to non-resident alien engaged in Trade or Business within the Philippines (NRAETB)  20% WI224  
WF Property dividend payment by domestic corporation to NRAETB 20%  WI225   
WF Share of NRAETB in the distributable net income after tax of a partnership (except GPPs) of which he is a partner, or share in the net income after tax of an association, joint account or a joint venture taxable as a corporation of which he is a member or a co-venturer    20% WI226  
WF On other payments to NRFCs     30%   WC230 
WF Distributive share of individual partners in a taxable partnership, association, joint account or joint venture or consortium 10%  WI240   
WF All kinds of royalty payments to citizens, resident aliens and NRAETB (other than WI380 and WI341), domestic and resident foreign corporations    20%  WI250  WC250
WF On prizes exceeding P10,000 and other winnings paid to individuals    20%  WI260   
WF Branch profit remittance by all corporations except PEZA/SBMA/CDA registered 15%    WC280 
WF On the gross rentals, lease and charter fees derived by non-resident owner or lessor of foreign vessels     4.5%   WC290 
WF On gross rentals, charter and other fees derived by non-resident lessor or aircraft, machineries and equipment 7.5%   WC300 
WF On payments to oil exploration service contractors/sub-contractors 8%  WI310  WC310 
WF Payments to non-resident alien not engage in trade or business within the Philippines (NRANETB) except on sale of shares in domestic corporation and real property 25% WI330  
WF On payments to non-residnet individual/foreign corporate cinematographic film owners, lessors or distributors 25% WI340 WC340
WF Royalties paid to NRAETB on cinematographic films and similar works 25%  WI341   
WF Final tax on interest or other payments upon tax-free covenant bonds, mortgages, deeds of trust or other obligations under Sec. 57C of the NIRC of 1997, as amended    30% WI350  
WF Royalties paid to citizens, resident aliens and nraetb on books, other literary works and musical compositions 10% WI380  
WF Informers cash reward to individuals/juridical persons 10%  WI410  WC410 
WF Cash on property dividend paid by a Real Estate Investment Trust   10% WI700 WC700

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FRINGE BENEFITS GRANTED TO EMPLOYEES (EXCEPT RANK AND FILE EMPLOYEES)

Fringe Benefit means any good, service 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:

  1. Housing
  2. Expense account
  3. Vehicle of any kind
  4. Household personnel (maid, driver and others)
  5. Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted
  6. membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations
  7. Expenses for foreign travel
  8. Holiday and vacation expenses
  9. Educational assistance to employee or his dependents; and
  10. Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.

[return to index]


WITHHOLDING TAX ON GOVERNMENT MONEY PAYMENTS (GMP) - PERCENTAGE TAXES

Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to non-VAT registered taxpayers/suppliers/payees.

TAX TYPE
DESCRIPTION RATE
ATC
Applicable to Government Withholding Agent Only
WV VAT withholding on Purchase of Goods 5% WV010
WV VAT Withholding on Purchase of Services 5% WV020
Applicable to Both Government and Private Withholding Agents
WV VAT Withholding from non-residents (Government Withholding Agents) 12% WV040
WV VAT Withholding from non-residents (Private Withholding Agents) 12% WV050
WV VAT Withholding on Purchases of Goods (with waiver of privilege to claim tax credit) creditable 12% WV012
WV VAT Withholding on Purchases of Goods (with waiver of privilege to claim input tax credit) final 12% WV014
WV VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit) creditable 12% WV022
WV VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit) final 12% WV024
Applicable to Government Withholding Agent Only
WB Tax on Carriers and Keepers of Garages 3% WB030
WB  Franchise Tax on Gas and Utilities 2% WB040
WB  Franchise tax on radio & TV broadcasting companies whose annual gross receipts do not exceed P10M & who are not-VAT registered taxpayer 3% WB050
WB  Tax on Life insurance premiums 2% WB070
WB  Tax on Overseas Dispatch, Message or Conversation from the Philippines 10% WB090
WB  Business tax on Agents of Foreign Insurance companies - Insurance Agents  4%  WB120 
WB  Business tax on Agents of Foreign Insurance companies - owner of the property 5% WB121
WB  Tax on international carriers 3% WB130
WB  Tax on Cockpits 18% WB140
WB  Tax on amusement places, such as cabarets, night and day clubs, videoke bars, karaoke bars, karaoke televion, karaoke boxes, music lounges and other similar establishments 18%  WB150 
WB Taxes on Boxing exhibitions 10% WB160
WB Taxes on professional basketball games 15% WB170
WB Tax on jai-alai and race tracks 30% WB180
WB Tax on sale barter or exchange of stocks listed and traded through Local Stock Exchange 6/10 of 1% WB200
WB Tax on shares of stocks sold or exchanged through initial and secondary public offering       - Not over 25%       - Over 25% but not exceeding 33 1/3%       - Over 33 1/3% 4% 2% 1% WB201 WB202 WB203
WB Tax on Banks and Non-banks Financial Intermediaries Performing Quasi Banking Dunctions    
        A. On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the remaining maturities of instruments from which receipts are derived          - Maturity period is five years or less          - Maturity period is more than five years   5% 1%   WB301 WB302
        B. On dividends and equity shares and net income of subsidiaries 0% WB102
        C. On royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under the Code 7% WB103
        D. On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments 7% WB104
WB Tax on Other Non-Banks Financial Intermediaries nor performing Quasi-Banking Functions    
        A. On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the remaining maturities of instruments from which such receipts are derived           - Maturity period is five years or less           - Maturity period is more than five years   5% 1%   WB108 WB109
        B. On all  other items treated as gross income under the Code 5% WB110
APPLICABLE TO BOTH GOVERNMENT AND PRIVATE WITHHOLDING AGENTS
  Persons exempt from VAT under Sec. 108BB (creditable) Government Withholding Agent 3% WB080
  Persons exempt from VAT under Sec. 108BB (creditable) Private Withholding Agent 3% WB082
  Persons exempt from VAT under Section 109BB (Section 116 applies) 3% WB084

[return to index]


 Index for Percentage Tax:

Percentage Tax Description

      Percentage tax is a business tax imposed on persons, entities, or transactions specified under Sections 116 to 127 of the National Internal Revenue Code of 1997 (also known as Tax Code), as amended, and as required under special laws.


 

Quarterly Percentage Tax under Sections 116 to 126 of the Tax Code, as amended

BIR Form 2551Q - Quarterly Percentage Tax Return 

Who are required to file?

Persons refer to individuals and non-individuals, which include, but are not limited to, estates, trusts, partnerships, and corporations.
  1. Persons, who are not VAT-registered, who sell goods, properties or services, whose annual gross sales and/or receipts do not exceed three million pesos (Php3,000,000.00) and are exempt from value-added tax (VAT) under Section 109 (BB) of the National Internal Revenue Code, as amended by Republic Act (RA) No. 10963.

  2. Persons who lease residential units where the monthly rental per unit exceeds fifteen thousand pesos (Php15,000.00) but the aggregate of such rentals of the lessor during the year does not exceed three million pesos (Php3,000,000.00)

  3. Persons 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 by land for the transport of passengers (except owners of bancas and 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 – 

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

      2. gas and water utilities.

    4. Overseas dispatch, message or conversation transmitted from the Philippines by telephone, telegraph, tele-writer exchange, wireless and other communication equipment services, except those transmitted by:

      1. The Philippine Government or any of its political subdivisions or instrumentalities;

      2. Diplomatic services;

      3. Public international organizations or any of their agencies based in the Philippines enjoying privileges, exemptions and immunities which the Philippine Government is committed to recognize pursuant to international agreement; and

      4. News services for messages which deal exclusively with the collection of news items for, or the dissemination of news item through, public press, radio or television broadcasting or a newsticker service furnishing a general news service similar to that of the public press.

    5. Banks, non-bank financial intermediaries performing quasi-banking functions

    6. Other non-bank financial intermediaries (including pawnshops as clarified under Revenue Regulations [RR] No. 10 – 2004)

    7. Person, company or corporation (except purely cooperative companies or associations) doing life insurance business in the Philippines

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

    9. 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 as clarified under Revenue Memorandum Circular (RMC) No. 18 – 2010

    10. Winnings or 'dividends' in horse races

How to file/pay?

Documentary Requirements

  1. BIR Form 2551Q - Quarterly Percentage Tax Return Form
  2. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), 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
  6. Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives, and from the National Electrification Administration for electric cooperatives

Procedures

  1. For Manual filing and/or payment:

    1. Download the newly-revised BIR Form 2551Q pdf file format under the BIR Forms-VAT/Percentage Tax Returns section of the BIR website.

    2. Properly fill-up BIR Form 2551Q in triplicate copies.

    3. 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 2551Q and other requirements. If paying manually, present the aforementioned documents together with BIR-prescribed deposit slip, and payment to the respective AAB. The Quarterly Percentage Tax shall be paid at the time the return is filed by the taxpayer.

    4. 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 Revenue Collection Officer (RCO), thru the Mobile Revenue Collection Officers System (MRCOS) facility, or duly Authorized Treasurer of the city or municipality where said business or principal place of business / where the taxpayer is registered, who will issue an Electronic Revenue Official Receipt (eROR).

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

    6. Manual Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit Card).

  2. For eFPS filing and/or payment:

    1. Use the existing and enhanced old BIR Form 2551Q in the eFPS system which contains all the alphanumeric tax codes (ATCs) enumerated in the said form in filing the return.

    2. Taxable amount to be indicated in the quarterly percentage return shall be the total gross sales/receipts for the quarter.

    3. In case percentage taxes for the first, second and/or third month of the quarter had been paid, payment/s made are to be reflected in BIR Form 2551Q in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form 2307.

    4. After e-filing, proceed to online payment by clicking the proceed to payment button and pay the quarterly percentage tax due.

  3. For eBIRForms filing and/or payment:

    1. Use the existing enhanced old BIR Form 2551Q in Offline eBIRForms Package V7, which contained all the alphanumeric tax codes (ATCs) enumerated in BIR Form 2551M in filing the return.

    2. Taxable amount to be indicated in the quarterly percentage return shall be the total gross sales/receipts for the quarter.

    3. In case percentage taxes for the first, second and/or third month of the quarter had been paid, payment/s made are to be reflected in BIR Form 2551Q in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form 2307.

    4. 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 and other requirements. If there is payment that will be done manually, present the aforementioned documents together with BIR-prescribed deposit slip, and payment to the respective AAB. The Percentage Tax shall be paid at the time the return is filed by the taxpayer.

    5. 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, thru the MRCOS facility, or duly Authorized Treasurer of the city or municipality where said business or principal place of business / where the taxpayer is registered, who will issue an Electronic Revenue Official Receipt (eROR).

    6. eBIRForms Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit Card).

Note: "No payment" returns filed late will result on imposition by the RDO of penalties, which shall be paid at the concerned AAB.

When to File/Pay

·       Within twenty-five (25) days after the end of each taxable quarter

  

Quarterly Percentage Tax Rates Table

Coverage

Taxable Base

Tax Rate

Non-VAT registered persons under Section 109 (BB)

Gross sales or receipts

3%

Domestic carriers and keepers of garages

Gross receipts

3%

International air/shipping carriers doing business in the Philippines

Gross receipts on transport of cargo from the Philippines to a foreign country

3%

Franchise grantees:

Gas and water utilities

Radio and television broadcasting companies whose annual gross receipts of the preceding year do not exceed Php10,000,000 and did not opt to register as VAT taxpayer


Gross receipts

Gross receipts

2%

3%

Overseas dispatch, message or conversation originating from the Philippines

Amount paid for the service

10%

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

Interest, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which receipts are derived:

•  If maturity period is five years or less

5%

•  If maturity period is more than five years

1%

Dividends and equity shares and net income of subsidiaries

0%

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%

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, discounts and all other items treated as gross income under the Tax Code, as amended

5%

Interest, commissions, discounts  from lending activities, as well as income from financial leasing on the basis of remaining maturities of instruments from which such receipts are derived:

•  If maturity period is five years or less

5%

•  If maturity period is more than five years

1%

Life Insurance Company/Agent/Corporation (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 (except when the World or Oriental Championship is at stake in any division, provided further that at least one of the contenders for World Championship is a citizen of the Philippines and said exhibitions are promoted by a citizen/s of the Philippines or by a corporation/ association at least 60% of the capital of which is owned by said citizen/s)

Gross receipts

10%

Professional basketball games (in lieu of all other percentage taxes of whatever nature and description)

Gross receipts

15%

Jai-alai and race track

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%

[return to index]


Percentage Tax for Transactions Involving Shares of Stocks under Section 127 of the Tax Code, as amended

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 Public Offering

Who are required to file?

  1. Every stock broker who effected a sale, barter or exchange of shares of stock listed and traded through the local stock exchange other than the sale by a dealer in securities, which tax shall be paid by the seller/transferor

  2. A corporate issuer, engaged in the sale, exchange or other disposition through Initial Public Offering (IPO) of shares of stock in closely-held corporations

  3. A stock broker who effected a sale, exchange or other disposition through secondary public offering of shares of stock in closely-held corporations

How to file/pay?

Documentary Requirements

  1. BIR Form 2552 - Percentage Tax Return for Transactions Involving Shares of Stocks
  2. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable
  3. Proof of Exemption for transactions not subject to tax, if applicable
  4. Duly approved Tax Debit Memo, if applicable
  5. For amended return, proof of payment and the return previously filed
  6. Authorization letter, if filed by an authorized representative

Procedures

  1. For Manual filing and/or payment:

    1. Properly fill-up the existing old BIR Form 2552 in triplicate copies using the new tax rate then compute the tax due thereon.

    2. Proceed to any AAB located within the territorial jurisdiction of the RDO where the where the broker or corporate issuer is registered, and present the duly accomplished old BIR Form 2552, together with the required attachments.

    3. If paying manually, present the aforementioned documents together with BIR-prescribed deposit slip, and payment to the respective AAB. The Percentage Tax Involving Shares of Stocks shall be paid at the time the return is filed by the taxpayer.

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

    5. Manual Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit Card).

  2. For eFPS filing and/or payment;

    1. File online using the existing BIR Form 2552 in the eFPS and pay online the corresponding taxes due thereon by proceeding to payment. The result of this transaction is deficiency tax.

    2. To cover the deficiency tax, eFPS filers shall likewise file and pay online the deficiency tax using BIR Form No. 0605 and fill in the corresponding information in the Tax Type (ST Percentage Tax – Stocks) and ATC field (ATC MC 031 – Deficiency Tax) in lieu of the correct BIR form that should have been used.

    3. eFPS filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit Card).

    4. Note: Once the enhanced version of the BIR Form 2552 is available in eFPS, there will be a notification/announcement through a Revenue Memorandum Circular (RMC). Guidelines shall be issued accordingly if there is a necessity whether or not to amend the previously filed returns in eFPS.

  3. For eBIRForms filing and payment:

    1. File online using the existing BIR Form 2552 in the eBIRForms Package and pay the corresponding tax dues via over-the-counter (OTC) of AAB under the jurisdiction of the RDO where the taxpayer is registered.

    2. For eBIRForms filers who want to pay online, you can pay thru GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit Card).

    3. The result of this transaction thru eBIRForms is deficiency tax.

    4. To cover the resulting deficiency tax, eBIRForms filers shall likewise file and pay online the deficiency tax using BIR Form No. 0605 and fill in the corresponding information in the Tax Type (ST Percentage Tax – Stocks) and ATC field (ATC MC 031 – Deficiency Tax) in lieu of the BIR Form 2552 that should have been used.

Note: "No payment" returns filed late will result on penalties that will be imposed by the RDO, which shall be paid at the concerned AAB.

When to File/Pay 

  1. 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

  2. For tax on shares of stocks sold or exchanged through primary offering - within 30 days from the date of listing in the LSE

  3. For tax on shares of stocks sold or exchanged through secondary public offering - within five (5) banking days from the date of collection

Note: Aside from BIR Form No. 2552, a stockbroker or corporate issuer is also required to submit a true and complete return to the Secretary of the Stock Exchange of which he is a member. The said return shall contain a declaration of all transactions effected through him during the preceding week and of taxes collected by him and turned over to the BIR.

Percentage Tax for Transactions Involving Shares Rates Table 

Coverage Basis Tax Rate
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 Gross selling price or gross value in money 6/10 of 1%

Sale, barter or exchange or other disposition through:

  • Initial Public Offering (IPO) – the issuing corporation shall pay the imposed tax
  • Secondary Public Offering – the seller shall pay the imposed tax

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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LIST OF RELEVANT REVENUE ISSUANCES

REVENUE REGULATIONS (RRs)

Issuance No.

Subject

Date of Issue

RR No. 9-2018

Prescribes the rules and regulations implementing the increase in the Stock Transfer Tax pursuant to RA No. 10963 (TRAIN Law)

(Published in Manila Bulletin on February 28, 2018)
DigestFull Text

February 26, 2018

RR No. 8-2015

Amends RR No. 6-2015 on the definition of raw cane sugar for purposes of the imposition of advance business tax (Value-Added Tax or Percentage Tax) and for other related purposes

(Published in Manila Bulletin on May 28, 2015)
Digest|Full Text

May 27, 2015

RR No. 6-2015

Implements regulations imposing advance Business Tax (VAT or Percentage Tax) payments on sugar and for other related purposes

(Published in Manila Bulletin on April 1, 2015)
Digest|Full Text

March 31, 2015

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. 9-2007

Prescribing the Updated Minimum Monthly/Quarterly Gross Receipts in Computing the Percentage Tax of Domestic Carriers and Keepers of Garages.

Digest | Full Text

August 1, 2007

RR No. 9-2004

Implements 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. 15-2002

Governs the imposition of Income Tax on the Gross Philippine Billings, other income of International Air Carriers and Common Carrier's Tax, 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. 1-2003

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, as last Amended by Republic Act No. 9010, Imposing Value-Added Tax (VAT) on 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, Television and Stage Directors; and Professional Athletes, as Well as Services Rendered by Customs, Real Estate, Stock, Immigration and Commercial Brokers, beginning January 1, 2003.

(published in Phil. Daily Inquirer on Jan. 8, 2003)

Digest|Full Text

January 7, 2003

RR No. 3-1995

Implementing Republic Act No. 7717, An Act Imposing a Tax on the Sale, Barter or Exchange of Shares of Stock Listed and Traded Through the Local Stock Exchange or Through Initial Public Offering, Amending for the Purpose the National Internal Revenue Code, as Amended, by Inserting a New Section and Repealing Certain Subsections Thereof

February 7, 1995

 

REVENUE MEMORANDUM CIRCULARs (RMCs)

Issuance No.

Subject

Date of Issue

RMC No. 26-2018

Circularizing the Revised BIR Form No. 2551Q (Quarterly Percentage Tax Return) January 2018 (ENCS)Full Text | Annex A | Guidelines

April 25, 2018

RMC No. 2-2018

Provides the transition procedures for all taxpayers filing tax returns affected by the revised tax rates pursuant to the provisions of RA No. 10963 (Tax Reform for Acceleration and Inclusion or TRAIN Law)

Digest|Full Text

January 8, 2018

RMC No. 104-2017

Circularizes the copy of RA No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Act) and President Duterte’s VETO message to the TRAIN Act

Digest|Full Text|VETO|RA 10963

December 29, 2017

RMC No. 62-2016

Clarification on proper tax treatment of passed-on Gross Receipts Tax

Digest|Full Text

June 14, 2016

RMC No. 71-2015

Allows taxpayers who are mandated to file their tax returns thru Electronic Filing and Payment System and Electronic BIR Forms in areas affected by Typhoon Lando to temporarily file their tax returns and pay their taxes manually

Digest|Full Text

October 30, 2015

RMC No. 40-2015

Clarifying the Nature and Extent of the Agricultural Cooperative Being the Producer of Sugar for Exemption from Advance VAT and Percentage Tax Purposes Pursuant to Section 5(b)(c) of Revenue Regulations (RR) No. 8-2015; in relation to Section 4(a) of RR No. 13-2008, and in line with Section 8(b.2.1.2) of the Joint Rules and Regulations Implementing Articles 60, 61 and 144 of Republic Act (RA) No. 9520, or the Cooperative Code of 2008.

Digest|Full Text

July 15, 2015

RMC No. 25-2015

Clarifies pertinent provisions of RR No. 6-2015 more particularly on the imposition of advance business tax (Value-Added Tax or Percentage Tax) on raw cane sugar and refined sugar

Digest|Full Text

May 6, 2015

RMC No. 24-2015

Clarifies pertinent provisions of Revenue Regulations No. 2-2015 more particularly on the submission of scanned copies of BIR Form Nos. 2307 and 2316

Digest|Full Text

May 6, 2015

RMC No. 21-2015

Provides alternative modes in the filing of BIR Form Nos. 2551M, 2551Q, 2550M and 2550Q using the electronic platforms of BIR

Digest|Full Text

April 20, 2015

RMC No. 9-2013

Clarifying the taxability of association dues, membership fees and other assessments/charges collected by homeowners’ associations

Digest | Full Text

January 30, 2013

RMC No. 49-2010

Further Amending Certain Portions 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

Clarification on 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

Amending Certain Portions of RMC No. 30-2008 on the Subject of 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 Revenue 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 Tax 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 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

 [return to index]


 

Index for Value-Added Tax

Value-Added Tax Description

Value-Added Tax (VAT) is a form of sales tax. It is a tax on consumption levied on the sale, barter, exchange or lease of goods or properties and services in the Philippines and on importation of goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.

[return to index]


Who are Required to File VAT Returns?

  • Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Three Million Pesos (Php3,000,000.00)

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

  • Any person, whether or not made in the course of his trade or business, who imports goods

[return to index]


Monthly VAT Declarations

BIR Form 2550M - Monthly Value-Added Tax Declaration (February 2007 ENCS)

Documentary Requirements

  1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No. 2307), if applicable
  2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable

  3. Duly approved Tax Debit Memo, if applicable

  4. Duly approved Tax Credit Certificate, if applicable

  5. Authorization letter, if return is filed by authorized representative.

Procedures

  1. Fill-up BIR Form No. 2550M in triplicate copies (two copies for the BIR and one copy for the taxpayer).

  2. If there is payment:

    • File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business establishment) is registered.

    • Accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and payment of the tax.

    • In places where there are no AAB, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue Collection Officer (RCO)

    • The RCO shall issue a Revenue Official Receipt upon payment of the tax.

  3. If there is no payment:

    • File the Monthly VAT Declaration, together with the required attachments, with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent having jurisdiction over the registered address of the taxpayer (head office of the business establishment).

Deadline

  • Manual Filing - Not later than the 20th day following the end of each month

  • Through Electronic Filing and Payment System (eFPS):

    Business Industry Period for filing Monthly VAT Declarations
    Group A  
    Insurance and Pension Funding                                                   25 days following the end of the month
    Activities Auxiliary to Financial Intermediation
    Construction
    Water Transport
    Hotels and Restaurants
    Land Transport
       
    Group B  
    Manufacture and Repair of Furniture 24 days following the end of the month
    Manufacture of Basic Metals
    Manufacture of Chemicals and Chemical Products
    Manufacture of Coke, Refined Petroleum & Fuel Products
    Manufacture of Electrical Machinery & Apparatus N.E.C.
    Manufacture of Fabricated Metal Products
    Manufacture of Food, Products & Beverages
    Manufacture of Machinery & Equipment NEC
    Manufacture of Medical, Precision, Optical Instruments
    Manufacture of Motor Vehicles, Trailer & Semi-Trailers
    Manufacture of Office, Accounting & Computing Machinery
    Manufacture of Other Non-Metallic Mineral Products
    Manufacture of Other Transport Equipment
    Manufacture of Other Wearing Apparel
    Manufacture of Paper and Paper Products
    Manufacture of Radio, TV & Communication Equipment/ Apparatus
    Manufacture of Rubber & Plastic Products
    Manufacture of Textiles
    Manufacture of Tobacco Products
    Manufacture of Wood & Wood Products
    Manufacturing N.E.C.
    Metallic Ore Mining
    Non-Metallic Mining & Quarrying
       
    Group C  
    Retail Sale 23 days following the end of the month
    Wholesale Trade and Commission Trade
    Sale, Maintenance, Repair of Motor Vehicle, Sale of Automotive Fuel
    Collection, Purification and Distribution of Water
    Computer and Related Activities
    Real Estate Activities
       
    Group D  
    Air Transport 22 days following the end of the month
    Electricity, Gas, Steam & Hot Water Supply
    Postal & Telecommunications
    Publishing, Printing & Reproduction of Recorded Media
    Recreational, Cultural & Sporting Activities
    Recycling
    Renting of Goods & Equipment
    Supporting & Auxiliary Transport Services
       
    Group E  
    Activities of Membership Organizations, Inc. 21 days following the end of the month
    Health and Social Work
    Public Admin & Defense Compulsory Social Security
    Research and Development
    Agricultural, Hunting, and Forestry
    Farming of Animals
    Fishing
    Other Service Activities
    Miscellaneous Business Activities
    Unclassified

[return to index]


Quarterly Value-Added Tax Return

BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)

Documentary Requirements

  1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable

  2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable

  3. Duly approved Tax Debit Memo, if applicable

  4. Duly approved Tax Credit Certificate, if applicable

  5. Previously filed return and proof of payment, for amended return

  6. Authorization letter, if return is filed by authorized representative

Procedures

Fill-up BIR Form 2550Q in triplicate copies (two copies for the BIR and one copy for the taxpayer)

  1. If there is payment:

    • File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business establishment) is registered.

    • Accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and payment of the tax.

    • In places where there are no AAB, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue Collection Officer (RCO)

    • The RCO shall issue a Revenue Official Receipt upon payment of the tax.

  2. If there is no payment:

    • File the Quarterly VAT Return, together with the required attachments with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent having jurisdiction over the registered address of the taxpayer (head office of the business establishment).

Reminders:

  • Only one consolidated Monthly VAT Declaration/Quarterly VAT Return shall be filed covering the results of operation of the head office as well as the branches for all lines of business subject to VAT.

  • The Quarterly Summary Lists of Sales and Purchases shall be submitted in Compact Disk-Recordable (CDR)  following the format provided under Section 4.114-3(g) of RR No. 16-2005, as amended by RR No. 1-2012.

  • The Quarterly Summary Lists of Sales and Purchases shall be submitted through electronic filing facility for taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and those enrolled under the eFPS.

Deadline

Within twenty five (25) days following the close of the taxable quarter.

[return to index]


Value-Added Tax Rates 

  • On sale of goods and properties - twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged

  • On sale of services and use or lease of properties - twelve percent (12%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties

  • On importation of goods - twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such as tax to be paid by the importer prior to the release of such goods from customs custody; provided, that where the customs duties are determined on the basis of quantity or volume of the goods, the VAT shall be based on the landed cost plus excise taxes, if any.

  • On export sales and other zero-rated sales - 0%

[return to index]


Related Revenue Issuances

REVENUE REGULATIONS (RRs)

Issuance No.

Subject Matter

Date of Issue

RR No. 15-2018

Amends RR No. 8-2018 particularly on the due date for the updating of registration from VAT to Non-VAT (Published in Manila Bulletin on April 7, 2018) DigestFull Text

April 5, 2018

RR No. 13-2018

Prescribes the Regulations implementing the Value-Added Tax (VAT) provisions under RA No. 10963 (TRAIN Law), which further amends RR No. 16-2005 (Consolidated VAT Regulations of 2005), as amended (Published in Manila Bulletin on March 19, 2018) DigestFull Text 

March 15, 2018

RR No. 8-2018

Implements the amended provisions on Income Tax pursuant to RA No. 10963 (TRAIN Law)

(Published in Manila Bulletin on February 22, 2018) Digest|Full Text 

February 20, 2018

RR No. 1-2017

Prescribes the regulations governing applications for Value-Added Tax (VAT) credit/refund filed under Section 112 of the Tax Code, as amended, prior to the effectivity of RMC No. 54-2014

(Published in Manila Bulletin on January 20, 2017)

Digest|Full Text 

January 18, 2017 

RR No. 5-2016

Amends Revenue Regulations No. 15-2012 by providing additional criteria in the accreditation of printers engaged in printing services of official receipts, sales invoices and other commercial receipts and/or invoices (Published in Manila Bulletin on June 2, 2016) Digest|Full Text|Annex A 

June 1, 2016

RR No. 15-2015

Amends Sections 4.109-1(B)(1)(s), (t) and (u) of RR No. 16-2005, as amended, relative to sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations

(Published in Manila Bulletin on December 29, 2015)

Digest|Full Text 

December 28, 2015

RR No. 8-2015

Amends RR No. 6-2015 on the definition of raw cane sugar for purposes of the imposition of advance business tax (Value-Added Tax or Percentage Tax) and for other related purposes
(Published in Manila Bulletin on May 28, 2015)
 Digest|Full Text 

May 27, 2015

RR No. 6-2015

Implements regulations imposing advance Business Tax (VAT or Percentage Tax) payments on sugar and for other related purposes

(Published in Manila Bulletin on April 1, 2015) Digest|Full Text 

March 31, 2015

RR No. 5-2015

Amends RR No. 6-2014 and imposes penalties to taxpayers mandatorily covered by eFPS or eBIRForms who failed to file tax returns under the electronic systems of the BIR

(Published in Manila Bulletin on March 19, 2015) Digest|Full Text|Annex A 

March 17, 2015 

RR No. 4-2014

Prescribes the policies and guidelines in the monitoring of service fees of professionals

(Published in Manila Bulletin on March 21, 2014)

Digest|Full Text 

March 20, 2014

RR No. 17-2013

Prescribes the guidelines on the preservation of books of accounts and other accounting records

(Published in Manila Bulletin and Philippine Daily Inquirer on September 28, 2013)

Digest | Full text 

September 27, 2013

RR No. 13-2013

Amends Section 2 (b) of Revenue Regulations No. 13-08 relative to the definition of raw sugar for Value-Added Tax purposes
(Published in Manila Bulletin on September 24, 2013)

Digest | Full Text 

September 20, 2013

RR No. 5-2013

Prescribes the tax treatment of sale of jewelry, gold and other metallic minerals to a non-resident alien individual not engaged in trade or business within the Philippines or to a non-resident foreign corporation

(Published in Manila Bulletin on April 24, 2013)

Digest | Full Text 

April 22, 2013

RR No. 1-2013

Further expands the coverage of taxpayers required to file tax returns and pay taxes through the Electronic Filing and Payment System to include National Government Agencies mandatorily required to use the Electronic Tax Remittance Advice 
(Published in Manila Bulletin on January 25, 2013)

Digest | Full Text | Annex A | Annex B 

January 23, 2013

RR No. 15-2012

Prescribes the regulations on the accreditation of printers as a prerequisite to the printing services of official receipts, sales invoices and other commercial receipts and/or invoices
(Published in Manila Bulletin on December 7, 2012)

Digest | Full Text | Annex A 

December 5, 2012

RR No. 13-2012

Prescribes the VAT treatment on sale of adjacent residential lots, house and lots or other residential dwellings, thereby amending certain provisions of RR No. 16-2005, as amended

(Published in Manila Bulletin on October 17, 2012)

Digest | Full Text 

October 12, 2012

RR No. 6-2012

Clarifies the taxation on the sale of gold and other metallic minerals to Bangko Sentral ng Pilipinas and other persons or entities

(Published in Manila Bulletin on April 4, 2012)

Digest | Full Text 

April 2, 2012

RR No. 3-2012

Prescribes the effectivity of threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale or lease of goods or properties or performance of services covered by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as amended

(Published in Manila Bulletin on February 22, 2012)

Digest | Full Text 

February 20, 2012

RR No. 1-2012

Requires the mandatory submission of Quarterly Summary List of Sales and Purchases by all VAT registered taxpayers 
(Published in Manila Bulletin on February 22, 2012)

Digest | Full Text 

February 20, 2012

RR No. 18-2011

Provides the penalties for violation of the requirement that Output Tax on the sale of goods and services should be separately indicated in the sales invoice or official receipt
(Published in Manila Bulletin on November 23, 2011)

Digest | Full Text 

November 21, 2011

RR No. 16-2011

Increases the amount of threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale or lease of goods or properties or performance of services covered by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as amended, thereby amending certain provisions of RR No. 16-2005, as amended, otherwise known as the “Consolidated VAT Regulations of 2005”
(Published in Manila Bulletin on November 2, 2011)

Digest | Full Text 

October 28, 2011

RR No. 10-2011

Amends certain provision of RR No. 16-2005, as amended by RR No. 4-2007, otherwise known as the "Consolidated Value-Added Tax Regulations of 2005", as amended 
(Published in Manila Bulletin on July 9, 2011)

Digest | Full Text

July 7, 2011

RR No. 9-2011

Amends RR No. 3-2011 relative to the policies, guidelines and procedures on the application for change in accounting period
(Published in Manila Bulletin on July 1, 2011)

Digest | Full Text 

June 29, 2011

RR No. 3-2011

Provides the policies, guidelines and procedures on the application for change in accounting period

(Published in Manila Bulletin on March 9, 2011)

Digest | Full Text | Annex A | Annex B | Annex C |Annex D | Annex E | Annex F 

March 7, 2011

RR No. 9-2009

Promulgates the requirements for the maintenance, retention and submission of electronic records

(published in Manila Bulletin on December 31, 2009)

Digest | Full Text 

December 29, 2009

RR No. 13-2008

Consolidated Regulations on Advance Value-Added Tax on the Sale of Refined Sugar; Amending and/or Revoking All Revenue Issuances Issued to this Effect, and for Other Related Purposed

(published in Philippine Star on October 7, 2008)Digest | Full Text | Annex A-B, E-J | Annex C | Annex D

September 9,
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 December 7, 2007) 
Digest | Full Text | Annex A

December 5,
2007

RR No. 11-2007

Suspension of the Implementation of Revenue Regulations No. 6-2007

(published in Manila Bulletin on August 29, 2007) Digest | Full Text

August 28, 
2007

RR No. 6-2007

Consolidated Regulations on Advance Value-Added Tax on the Sale of Refined Sugar, Amending and/or Revoking all Revenue Issuances Issued to this Effect, and for Other Related Purposes

(published in Manila Bulletin on May 11, 2007) Digest | Full Text | Annex A-E | Annex F-J

May 9, 2007

RR No. 4-2007

Amending Certain Provisions of RR 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. 2-2007

Amending Certain Provisions of RR No. 16-2005, As Amended, Otherwise Known as the Consolidated Value-Added Tax Regulations of 2005

(published in Manila Bulletin on January 12, 2007) Digest | Full Text

January 11,
2007

RR No. 16-2005

Consolidated Value-Added Tax Regulations of 2005
(published in Manila Times on October 21, 2005)

Digest | Full Text

October 19,
2005

RR No. 7-2004

Implementing Sec. 109(bb) and (cc) of the National Internal Revenue Code, as Amended by RA 9238, Excluding Services Rendered by Doctors of Medicine Duly Registered with the Professional Regulatory Commission (PRC), and Services Rendered by Lawyers Duly Registered with the Integrated Bar of the Philippines (IBP) from the Coverage of Value-Added Tax

(published in Philippine Star on May 28, 2004) Digest | Full Text

May 21, 2004

RR No. 4-2004

Supplementing the Rules on the Advance Payment of Value-Added Tax on Sale of Refined Sugar as Provided for in RR 2-2004

(published in Taliba on March 31, 2004) Digest | Full Text

March 26,
2004

RR No. 2-2004

Further Enhancing the Rules on the Advance Payment of Value-Added Tax on Sale of Refined Sugar, Amending RR 7-89 and 29-2002

(published in Manila Standard on February 28, 2004) Digest | Full Text

February 26, 
2004

RR No. 29-2003

Advance Payment of VAT on the Sale of Flour
(published in Manila Times on December 2, 2003)

Digest | Full Text

December 1,
2003

RR No. 28-2003

Amending Further Pertinent Provisions of RR 2-98 as Amended, Relative to the Issuance of Certificate of Value-Added Tax Withheld at Source, Thereby Amending RR 4-2002; and for the Purpose

(published in Manila Times on November 25, 2003) Digest | Full Text

November 20,
2003

RR No. 27-2003

Regulations Further Amending the Transitory Provisions of RR 18-99 as Amended by RR 12-2003, Pertaining to the Deadline for the Usage of Properly Stamped Unused Non-VAT Invoices or Receipts

(published in Manila Times on October 10, 2003) Digest | Full Text

October 9,
2003

RR No. 5-2003

Rules and Regulations To Implement The Remittance of the Following: (a) 70% Share of the ARMM in the Withholding Tax Payments of National Government Agencies (NGAs) and in the National Collections from Taxpayers Other Than NGAs Provided for Under Section 9, Article IX of RA 9054, Amending Therein Certain Sections of RR 4-98; (b)Allotment to the Regional Government (RG) of the 30% Share of the National Government (NG) of all Current Year Collections of Internal Revenue Taxes Within ARMM for a Period of Five (5) Years as may be Provided in the Annual Appropriations Act as Provided for Under Section 15, Article IX of RA 9054; and c) 50% of the 80% Share of the NG from the Yearly Incremental Revenue From VAT Collections Within ARMM Received by the Central Government as Provided for Under Section 15, in Relation to Section 9, both of Article IX of RA 9054 As Well As in Relation to Section 283 of the National Internal Revenue Code (NIRC) of 1997
Digest | Full Text

February 4,
2003

RR No. 29-2002

Enhancing the Rules on the Advance Payment of Value- Added Tax on the Sale of Refined Sugar, thereby Amending RR 7-89, and Other Purposes

(published in Philippine Star on December 22, 2002) Digest | Full Text

December 20,
2002

RR No.26-2002

Amends further RR No. 9-2001, as amended, by providing for the staggered filing of returns of taxpayers enrolled in the Electronic Filing and Payment System based on industry classification

(published in Manila Bulletin on Dec. 20, 2002)

Digest|Full Text 

December 19, 2002

RR No. 8-2002

Amending Further Pertinent Provisions of RR 7-95, as Amended, With Respect to the Time of Filing of Quarterly VAT Returns; Contents and Submission of Quarterly Total of Monthly Sales and Purchases Per Supplier or Customer, and Providing for the Penalties and Effect of Non-Submission Thereof; and Clarifying Further the Mode of Remittance of VAT Due from Non-Residents

(published in Philippine Daily Inquirer on June 27, 2002) Digest | Full Text | Attachment 2550 (front) | Attachment 2550 (back)

June 24,
2002

RR No. 2-98

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 ORDERS (RMOs)

Issuance No.

Subject Matter

Date of Issue

RMO No. 20-2018

Prescribes the revised policies and procedures on the processing of Tax Credit Certificates (TCCs) for cash conversion
Full Text 

May 3, 2018

RMO No. 16-2017

Amends certain provisions of RMO No. 5-2004 particularly on the application, processing and issuance of ATRIG on importation of wheat by millers and traders relative to the advance payment of Value-Added Tax on the sale of flour
Digest|Full Text 

July 21, 2017

RMO No. 16-2015

Amends RMO No. 19-2012 re: Value-Added Tax Audit Program of the Large Taxpayers Service

Digest|Full Text|Annex A

August 14, 2015

RMO No. 16-2014

Reiterates and prescribes certain policies relative to the VAT Audit Program

Digest|Full Text 

April 3,
2014

RMO No. 27-2013

Amends the 2012 Value-Added Tax (VAT) Audit Program 
Digest | Full Text 

October 11, 2013

RMO No. 5-2013

Prescribes the procedures and guidelines on the redemption of Notice of Payment Schedule relative to the implementation of the VAT TCC Monetization Program 
Digest | Full Text 

March 21, 2013

RMO No. 21-2012

Prescribes the policies, guidelines and procedures in the acceptance, processing, evaluation, approval of applications for monetization and issuance of Notice of Payment Schedule of outstanding VAT Tax Credit Certificates solely issued by the BIR and jointly issued by the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance and the BIR 
Digest | Full Text | Annex A-J | Annex K | Annex L |Annex M 

September 10, 2012

RMO No. 20-2012

Prescribes the policies and procedures for the implementation of the 2012 Value-Added Tax Audit Program 
Digest | Full Text | Annex A | Annex B | Annex C |Annex D | Annex E 

September 5, 2012

RMO No. 19-2012

Prescribes the policies and procedures in the Value-Added Tax Audit Program for Large Taxpayers Service

Digest | Full Text | Annex A | Annex B | Annex B-1 |Annex C | Annex C-1 

August 31, 2012

RMO No. 12-2009

Enjoins the strict implementation of the penalty provisions for non-submission of Quarterly Summary Lists of Sales and Purchases

Digest | Full Text 

April 30, 2009

RMO No. 3-2009

Amendment and Consolidation of the Guidelines in the Conduct of Surveillance and Stock-Taking Activities, and the Implementation of the Administrative Sanction of Suspension and Temporary Closure of Business

Digest | Full Text | Annex A | Annex B | Annex D | Annex E | Annex F | Excel File Annexes

January 23,
2009

RMO No. 6-2008

Prescribing the Guidelines and Procedures in the Printing, Requisition, Reporting, Issuance and Distribution of Certificate of Advance Payment of Value-Added Tax/ Percentage Tax on the Transport of Naturally Grown and Planted Timber Products as Prescribed in RR No. 13-2007 Dated October 15, 2007

Digest | Full Text | Annex A | Annex B-F

February 20,
2008

RMO No. 16-2007

Prescribing Additional Procedures in the Audit of Input Taxes Claimed in the VAT Returns by Revenue Officers and Amending "Annex B" of RMO No. 53-98 With Respect to the Checklist of Documents to be Submitted by a Taxpayer Upon Audit of his/its VAT Liabilities as well as the Mandatory Reporting Requirements to be Prepared by the Assigned Revenue Officer/s Relative Thereto, All of Which Shall Form an Integral Part of the Docket

Digest | Full Text

July 23, 
2007

RMO No. 7-2006

Prescribing the guidelines and procedures in the processing of applications for zero-rating of effectively zero-rated transactions for Value-Added Tax purposes
Digest | Full Text | Annex A | Annex B-B2 | Annex C-D

February 28,
2006

RMO No. 26-2005

Suspension of issuance of assessments for deficiency Value-Added Tax against cinema/theater operators/owners
Digest | Full Text

October 21,
2005

RMO No. 22-2004

Value-Added Tax (VAT) Exemption Certificate/ Identification Card Issued to qualified foreign embassies and their qualified personnel Amending/ Modifying RMO No. 81-99

Digest | Full Text 

May 24, 2004

RMO No. 5-2004

Prescribing the guidelines and procedures in the implementation of RR No. 29-2003 on the advance payment of Value-Added Tax on the sale of flour

Digest | Full Text | Annex A

February 4,
2004

RMO No. 35-2002

Prescribing the guidelines and procedures in the processing and issuance of Authority to Release Imported Goods (ATRIG) for Excise and Value-Added Tax Purposes
Digest | Full Text | Annex A | Annex B | Annex C | Annex D | Flowchart

December 11,
2002

RMO No. 9-2000

Tax treatment of sales of goods, properties and services made by VAT- registered suppliers to BOI-registered manufacturers-exporters with 100% export sales
Digest

March 29,
2000

RMO No. 81-99

Issuance of Value-Added Tax (VAT) Exemption Certificate to all qualified embassies and their personnel

Digest

November 5,
1999

RMO No. 40-94

Prescribing the Modified Procedures on the Processing of Claims for VAT Credit/ Refund

REVENUE MEMORANDUM CIRCULARS (RMCs)

Issuance No.

Subject Matter

Date of Issue

RMC No. 17-2018

Amends certain provisions of RMC Nos. 89-2017 and 54-2014 on the processing of claims for issuance of Tax Refund/Tax Credit Certificate in relation to amendments made in the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law)

Digest|Full Text|Annex A.1|Annex A.1.1Annex A.1.2-1.12|Annex A.2|Annex B|Annex C|Annex D|Annex E|Annex F 

March 8, 2018

RMC No. 89-2017

Amends RMC No. 51-2007 relative to the processing of claims for issuance of tax refund/Tax Credit Certificate (TCC) and the revenue officials authorized to approve and/or issue the tax refund/TCC

Digest|Full Text 

October 24, 2017

RMC No. 23-2017

Prescribes the new template of Value-Added Tax Exemption Identification Card issued to qualified diplomats, officials and dependents of the US Embassy

Digest|Full Text|Annex A|Annex B 

March 7, 2017

RMC No. 19-2017

Amends Question and Answer to No. 12 of RMC No. 80-2010 regarding the issuance of Electronic Letters of Authority for Value-Added Tax credit/refund claims filed by direct exporters

Digest|Full Text 

March 2, 2017

RMC No. 82-2014

Publishes the full text of Joint Circular No. 002.2014 of the DOF, DBM, BOC and BIR, providing for the establishment of a mechanism for qualified VAT-registered persons to receive the cash equivalent of their outstanding VAT Tax Credit Certificates

Digest|Full Text |Joint Circular 

December 2,
2014

RMC No. 55-2014

Clarifies the livestock and poultry feeds or ingredients used in the manufacture of finished feeds to be exempt from VAT
Digest|Full Text 

June 27,
2014

RMC No. 54-2014

Clarifies the issues relative to the application for Value-Added Tax (VAT) refund/credit under Section 112 of the Tax Code, as amended

Digest|Full Text|Annex A|Annex B 

June 17,
2014 

RMC No. 57-2013

Circularizes BIR Ruling No. 123-2013 re: recovery of unutilized creditable input taxes attributable to VAT zero-rated sales

Digest | Full Text 

August 29, 2013

RMC No. 8-2013

Publishes the full text of Joint Circular No. 6-2012 entitled “Joint Guidelines Implementing the Special Provision of the General Appropriations Act on Value-Added Tax (VAT) Refunds” 
Digest | Full Text | Annex A 

January 25, 2013

RMC No. 5-2013

Publishes the full text of Joint Circular No. 5-2012 entitled "Joint Guidelines Implementing the Special Provision of the General Appropriations Act on VAT Refunds on Importation"
Digest | Full Text | Annex A 

January 18, 2013

RMC No. 75-2012

Clarifies Section 109(1)(R) of the National Internal Revenue Code of 1997, as amended, on the VAT exemption of the sale, importation, printing or publication of books, newspapers, magazines, reviews or bulletins
Digest | Full Text 

November 23, 2012

RMC No. 58-2012

Reiterates the requirement on the submission of Quarterly Value-Added Tax (VAT) Report per city/municipality
Digest | Full Text 

September 27, 2012

RMC No. 51-2012

Amends the deadline for the filing of Applications for Value-Added Tax (VAT) Tax Credit Certificates (TCCs) Monetization
Digest | Full Text 

September 3, 2012

RMC No. 47-2012

Prescribes the guidelines in the filing of application for enrollment in the Value-Added Tax (VAT) Tax Credit Certificates (TCCs) Monetization Program

Digest | Full Text | Annex A 

August 22, 2012

RMC No. 21-2012

Circularizes the full text of Executive Order No. 68 entitled “Monetization Program of Outstanding Value-Added Tax (VAT) Tax Credit Certificates (TCCs)”

Digest | Full Text 

May 3, 2012

RMC No. 54-2011

Circularizes the En Banc Resolution of the Supreme Court denying with finality the Motion for Reconsideration on G.R. No. 193007 upholding the validity of imposition of VAT on Toll Fees

Digest | Full Text 

November 8, 2011

RMC No. 49-2011

Further clarifies RMC No. 38-2011 on Expanded Withholding Tax obligation of Philippine Health Insurance Corporation (PHIC), including the Income Tax withholding obligation of hospitals/clinics on case rates of PHIC and the matter of 5% Final Withholding VAT for government money payments
Digest | Full Text 

October 11, 2011

RMC No. 63-2010

Imposes the Value-Added Tax on Tollway Operators
Digest | Full Text 

July 20, 2010

RMC No. 60-2010

Clarifies the coverage of RMO No. 56-2010 relative to the use of updated medium for submitting the Summary List of Sales and Purchases (SLSP)

Digest | Full Text

July 13, 2010

RMC No. 56-2010

Disseminates the most recent policies on the audit of all internal revenue tax liabilities for the year 2009
Digest | Full Text 

June 29, 2010

RMC No. 39-2010

Directs the Revenue District Offices to verify the VAT Compliance of Health Maintenance Organizations

Digest | Full Text 

May 21, 2010

RMC No. 30-2010

Clarifies Revenue Memorandum Circular No. 72-2009, which reiterated the imposition of the Value-Added Tax on Tollway Operators

Digest | Full Text 

March 26, 2010

RMC No. 51-2009

Clarifies the Requirement for the Submission of Summary Lists of Sales (SLS)/Summary Lists of Purchases (SLP); the imposition of penalties for their non-submission; the issuance of Subpoena Duces Tecum; and the imposition of penalties for failure to obey summons

Digest | Full Text 

September 16, 2009

RMC No. 77-2008

Taxability of Director’s Fees Received By Directors Who are not Employees of the Corporation for VAT or Percentage Tax Purposes as Espoused Under Revenue Memorandum Circular No. 34-2008

Digest | Full Text

December 3,
2008

RMC No. 46-2008

Clarification of Issues Concerning Common Carriers by Air and Their Agents Relative to the Revenue and Receipt from Transport of Passengers, Goods/Cargoes and Mail, and from Excess Baggage

Digest | Full Text

June 20, 
2008

RMC No. 34-2008

Tax Treatment of Director’s Fees for Income Tax and Business Tax Purposes

Digest | Full Text

April 18,
2008

RMC No. 59-2007

Clarifying the Effect of Suspension of RR No. 6-2007, Otherwise Known As the "Consolidated Regulations on Advance Value-Added Tax on the Sale of Refined Sugar, Amending and/or Revoking All Revenue Issuances Issued to this Effect and for Other Related Purposes"
Digest | Full Text

September 14,
2007

RMC No. 53-2007

Reiteration of the Amendment Made by RA No. 9337 Imposing VAT on the Sale of Non-Food Agricultural Products, Marine and Forest Products and on the Sale of Cotton and Cotton Seeds in their Original State

Digest | Full Text

August 7,
2007

RMC No. 39-2007

Clarifying the Income Tax and VAT Treatment of Agency Fees/Gross Receipts of Security Agencies Including the Withholding of Taxes Due Thereon

Digest | Full Text | Annex A

June 13,
2007

RMC No. 35-2006

Clarifying the Proper VAT and EWT Treatment of Freight and Other Incidental Charges Billed by Freight Forwarders
Digest | Full Text

June 30,
2006

RMC No. 31-2006

Value Added Tax (VAT) on the Construction or Renovation of Official Buildings or Properties of the United States of America Embassy

Digest | Full Text | Annex A

May 30,
2006

RMC No. 30-2006

Prescribing the Submission of a Narrative Memorandum Report to Accompany the VAT Credit Evaluation Report and Requiring the Attachment of Certain Documents Prior to Approval of the Tax Credit Certificate (TCC) Recommended by the Tax and Revenue Group (TRG), Department of Finance One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (DOF-OSS)
Digest |Full Text

May 22, 
2006

RMC No. 22-2006

Clarifying certain issues relating to the implementation of the increase in the Value-Added Tax rate from 10% to 12% on the sale of goods pursuant to Republic Act No. 9337
Digest | Full Text

April 6, 2006

RMC No. 21-2006

Clarification of Issues on How to Fill-up the new Version of VAT Forms (September, 2005 Version) and other Related Issues
Digest | Full Text

April 6, 2006

RMC No. 8-2006

Clarifying certain issues relating to the implementation of the increase in the VAT rate from 10% to 12% pursuant to Republic Act No. 9337

Digest | Full Text

February 1,
2006

RMC No. 5-2006

Prescribing the use of the Government Money Payment Chart Implementing Sections 2.57.2, 4.114 and 5.116 of Revenue Regulations No. 2-98 as amended by Revenue Regulations No. 16-2005 in relation to Sections 57 (B), 114 (C) and 116 to 123 of Republic Act No. 8424 as amended by Republic Act No. 9337

Digest | Full Text | Annex A

January 20,
2006

RMC No. 72-2005

Transition procedures for all Electronic Filing and Payment System filers (Large Taxpayers/Top 10,000 Corporations) in filing tax returns affected by the new VAT Law (R.A. 9337)
Digest | Full Text

December 22,
2005

RMC No. 68-2005

Enhanced VAT forms – BIR Form No. 2550M (Monthly Value-Added Tax Declaration) and BIR Form No. 2550Q (Quarterly Value-Added Tax Return) – September 2005 version
Digest | Full Text | Annex A-1 | Annex A-2 | Annex B-1 |Annex B-2

December 8,
2005

RMC No. 62-2005

Revised guidelines in the registration and invoicing requirements including clarification on common issues affecting Value-Added Tax (VAT) taxpayers Pursuant to RA No. 9337 (An Act Amending Sections 27, 28, 34, 106, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 and 288 of the National Internal Revenue Code of 1997, as Amended, and for other Purposes)

Digest | Full Text

November 3,
2005

RMC No. 57-2005

Attachments to the quarterly VAT return to be filed starting October 25, 2005

Digest | Full Text

October 20,
2005

RMC No. 52-2005

Value-Added Tax (VAT) Liability of the Tollway Industry
Digest | Full Text

October 3,
2005

RMC No. 29-2005

Clarifying the provisions of Republic Act No. 9337 (VAT Law of 2005) applicable to the petroleum industry
Digest | Full Text

July 1,
2005

RMC No. 70-2004

Clarification on proper determination of amount of Value-Added Tax on VAT invoices or VAT official receipts
Digest | Full Text

November 23,
2004

RMC No. 60-2004

Clarification regarding the withholding of creditable Value-Added Tax by government offices for purchases of P1,000.00 and below

Digest | Full Text

September 23,
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. 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, byExcluding Several Services from the Coverage of the Value-Added Tax and Re-Imposing the Gross Receipts Tax on Banks and Non-Bank Financial IntermediariesPerforming Quasi-Banking Functions and Other Non-Bank Financial Intermediaries Beginning January 1, 2004

Digest | Full Text | RA No. 9238

February 20,
2004

RMC No. 2-2004

Clarifying the Issues on VAT Taxable Transactions of Philippine Ports Authority Amending Revenue Memorandum Circular No. 20-88, Pursuant to Republic Act No. 7716 as Implemented by Revenue Regulations No. 7-95
Digest | Full Text

January 7,
2004

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 TextAnnex A

January 22,
2003

RMC No. 61-2003

Issuance of VAT Invoices/Receipt for Non-VAT/Exempt Sale of Goods, Properties or Services

Digest | Full Text

October 8,
2003

RMC No. 49-2003

Amending Answer to Question Number 17 of Revenue Memorandum Circular No. 42-2003 and Providing Additional Guidelines on Issues Relative to the Processing of Claims for Value-Added Tax (VAT) Credit/Refund, Including Those Filed with the Tax and Revenue Group, One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS-DOF) by Direct Exporters

Digest | Full Text

August 27,
2003

RMC No. 42-2003

Clarifying certain issues raised relative to the processing of claims for Value-Added Tax (VAT) credit/refund, including those filed with the Tax and Revenue Group, One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS-DOF) by Direct Exporters
Digest | Full Text

July 23,
2003

RMC No. 30-2003

Clarification of Paragraph 1-Q of Revenue Memorandum Circular No. 28-2003

Digest | Full Text

May 21,
2003

RMC No. 56-2002

Taxability of Health Maintenance Organizations (HMOs) for VAT purposes

Digest

December 18,
2002

RMC No. 45-2001

Taxability of Pawnshop Operators for VAT Purposes

October 12,
2001

RMC No. 28-2001

Taxability of Movie/Cinema House Operators for VAT Purposes

July 2,
2001

RMC No. 25-99

Disseminating the Ruling of the Commissioner of Internal Revenue on the Non-eligibility for VAT Zero-Rating of Automobile Sales to Entities Registered with PEZA, SBMA and Clark Development Authority

March 18,
1999

RMC No. 32-99

Japanese Contractors undertaking Overseas Economic Cooperation Fund of Japan (OECF) Funded Project are Exempt from the eight and one half percent (8.5%) creditable VAT imposed under Section 114(C) of the Tax Code of 1997 and to the One Percent (1%) Expanded Withholding Tax (EWT) imposed under Section 2.57.2(E) of RR No. 2-98 implementing Section 57(B) of the Tax Code of 1997

May 3,
1999

[return to index]


Codal Reference

Title IV, Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended

 

[return to index]


FREQUENTLY ASKED QUESTIONS

I.   General VAT Queries

Who are liable to register as VAT taxpayers?

Any person who, in the course of trade or business, sells, barters or exchanges goods or properties or engages in the sale or exchange of services shall be liable to register if:

  1. His gross sales or receipts for the past twelve (12) months, other than those that are exempt under Section 109 (A) to (U), have exceeded Three Million Pesos (P3,000,000.00): or

  2. There are reasonable grounds to believe that his gross sales or receipts for the next twelve (12) months, other than those that are exempt under Section 109 (A) to (U), will exceed Three Million Pesos (P3,000,000.00).

When is a new VAT taxpayer required to apply for registration and pay the registration fee?

New VAT taxpayers shall apply for registration as VAT Taxpayers and pay the corresponding registration fee of five hundred pesos (P500.00) using BIR Form No. 0605 for every separate or distinct establishment or place of business before the start of their business following existing issuances on registration.

Thereafter, taxpayers are required to pay the annual registration fee of five hundred pesos (P500.00) not later than January 31, every year.

What compliance activities should a VAT taxpayer, after registration as such, do promptly or periodically?

The following compliance activities must be performed by a VAT-registered taxpayer:

  1. Pay the annual registration fee of P500.00 for every place of business or establishment that generates sales;

  2. Register the books of accounts of the business/occupation/calling, including practice of profession, before using the same;

  3. Register the sales invoices and official receipts as VAT-invoices or VAT official receipts for use on transactions subject to VAT. (If there are other transactions not subject to VAT, a separate set of non-VAT invoices or non-VAT official receipts need to be registered for use on transactions not subject to VAT);

  4. Filing of the Monthly Value-added Tax Declaration on or before the 20th day following the end of the taxable month (for manual filers)/on or before the prescribed due dates enunciated in RR No. 16-2005 (for e-filers) using BIR Form No. 2550M and of the Quarterly VAT Return on or before the 25th day following the end of the taxable quarter using BIR Form No. 2550Q, reflecting therein gross receipts (for seller of service)/ gross sales (for seller of goods) and output tax (VAT on sales); purchases of goods and services made in the course of trade or business/exercise of profession and input tax (VAT on purchases), other allowable tax credits as in the case of advance VAT payment and VAT withheld by government payors, and VAT payable or excess input VAT, whichever is applicable, with the accredited agent banks (AABs) of the BIR or Revenue Collection Officers (RCOs) of the BIR (in areas without AAB), for returns with payment, or with the RDO/LTDO having jurisdiction over the taxpayer (home RDO/LTDO), for returns without payment. (The monthly VAT Declaration and the Quarterly VAT Return shall reflect the consolidated total for all the taxable lines of activity and all the establishments - head office and branches);

  5. Submit with the RDO/LTDO having jurisdiction over the taxpayer, on or before the deadline set in the filing of the Quarterly VAT Return, the soft copy of the Quarterly Schedule of Monthly Sales and Output Tax (if the quarterly sales exceed P2,500,000.00), and the soft copy of the Quarterly Schedule of Monthly Domestic Purchases and Input Tax/ the soft copy of the Schedule of Transactional/Individual Importation ( if the quarterly total purchases exceed P1,000,000.00), reflecting therein the required data prescribed under existing revenue issuances.

What is the liability of a taxpayer becoming liable to VAT and did not register as such?

Any person who becomes liable to VAT and fails to register as such shall be liable to pay the output tax as if he is a VAT-registered person, but without the benefit of input tax credits for the period in which he was not properly registered.

Who may opt to register as VAT and what will be his liability?

  1. Any person who is VAT-exempt under Sec. 109 of the Tax Code, as amended, may, in relation to Sec. 109 (2) of the same Code, elect to be VAT-registered by registering with the RDO that has jurisdiction over the head office of that person, and pay the annual registration fee of P500.00 for every separate and distinct establishment.

  2. Any person who is VAT-registered but enters into transactions which are exempt from VAT (mixed transactions) may opt that the VAT apply to his transactions which would have been exempt under Section 109 of the Tax Code, as amended.

  3. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed ten million pesos (P10,000,000.00) derived from the business covered by the law granting the franchise may opt for VAT registration. This option, once exercised, shall be irrevocable. (Sec. 119, Tax Code).

  4. Any person who elects to register under optional registration shall not be allowed to cancel his registration for the next three (3) years.

The above-stated taxpayers may apply for VAT registration not later than ten (10) days before the beginning of the calendar quarter and shall pay the registration fee unless they have already paid at the beginning of the year. In any case, the Commissioner of Internal Revenue may, for administrative reason deny any application for registration. Once registered as a VAT person, the taxpayer shall be liable to output tax and be entitled to input tax credit beginning on the first day of the month following registration.

What are the instances when a VAT-registered person may cancel his VAT registration?

  1. If he makes a written application and can demonstrate to the commissioner's satisfaction that his gross sales or receipts for the following twelve (12) months, other than those that are exempt under Section 109 (A) to (U), will not exceed Three Million Pesos (P3,000,000.00); or

  2. If he has ceased to carry on his trade or business, and does not expect to recommence any trade or business within the next twelve (12) months.

When will the cancellation for registration be effective?

The cancellation for registration will be effective from the first day of the following month the cancellation was approved.

What is the invoicing/receipt requirement of a VAT-registered person?

A VAT registered person shall issue :

  1. A VAT invoice for every sale, barter or exchange of goods or properties; and

  2. A VAT official receipt for every lease of goods or properties and for every sale, barter or exchange of services.

May a VAT-registered person issue a single invoice/ receipt involving VAT and Non-VAT transactions?

Yes. He may issue a single invoice/ receipt involving VAT and non-VAT transactions provided that the invoice or receipt shall clearly indicate the break-down of the sales price between its taxable, exempt and zero-rated components and the calculation of the Value-Added Tax on each portion of the sale shall be shown on the invoice or receipt.

May a VAT- registered person issue separate invoices/ receipts involving VAT and Non-VAT transactions?

Yes. A VAT registered person may issue separate invoices/ receipts for the taxable, exempt, and zero-rated component of its sales provided that if the sales is exempt from value-added tax, the term "VAT-EXEMPT SALE" shall be written or printed prominently on the invoice or receipt and if the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on the invoice or receipt.

How is the Value-Added Tax presented in the receipt/ invoice?

The amount of the tax shall be shown as a separate item in the invoice or receipt.

Sample:

Sales Price P 100,000.00
VAT 12,000.00
Invoice Amount  112,000.00

What is the information that must be contained in the VAT invoice or VAT official receipt?

  1. Name of Seller

  2. Description of the goods or properties or nature of the service

  3. Unit cost

  4. Quantity

  5. Date of transaction

  6. TIN of buyer, if VAT- registered and amount exceeds P1,000.00

  7. Address of Buyer

  8. Business Style of Buyer

  9. Name of Buyer

  10. Statement that the seller is a VAT-registered person, followed by his TIN

  11. Business Address of the Seller

  12. Business Style of the Seller

  13. Purchase price plus the VAT, provided that

    • The amount of tax shall be shown as a separate item in the invoice or receipt;
    • If the sale is exempt from VAT, the term "VAT-EXEMPT SALE" shall be written or printed prominently on the invoice or receipt;
    • If the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on the invoice receipt; and
    • If the sale involves goods, properties or services some of which are subject to and some of which are zero-rated or exempt from VAT, the invoice or receipt shall clearly indicate the breakdown of the sales price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt.
  14. Authority to Print Receipt Number at the lower left corner of the invoice or receipt.

What is the liability of a VAT-registered person in the issuance of a VAT invoice/ receipt for VAT-exempt transactions?

If a VAT-registered person issues a VAT invoice or VAT official receipt for a VAT-exempt transaction but fails to display prominently on the invoice or receipt the words "VAT-EXEMPT SALE", the transaction shall become taxable and the issuer shall be liable to pay the VAT thereon. The purchaser shall be entitled to claim an input tax credit on his purchase.

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.

What is "input tax"?

Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local purchase of goods, properties or services, including lease or use of property in the course of his trade or business. It shall also include the transitional input tax determined in accordance with Section 111 of the Tax Code, presumptive input tax and deferred input tax from previous period.

Does amortization of input VAT still allowable?

Yes , but is only allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.

What will be the basis of the date of cancellation?

It is the date of issuance of tax clearance by the BIR, after full settlement of all tax liabilities relative to cessation of business or change of status of concerned taxpayer

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, among others:

  1. Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business;

  2. 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;

  3. The right or privilege to use in the Philippines of any industrial, commercial or scientific equipment;

  4. The right or the privilege to use motion picture films, films, tapes and discs; and

  5. Radio, television, satellite transmission and cable television time.

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, whether in kind or in cash, including those performed or rendered by the following:

  1. Construction and service contractors;

  2. Stock, real estate, commercial, customs and immigration brokers;

  3. Lessors of property, whether personal or real;

  4. Persons engaged in warehousing services;

  5. Lessors or distributors of cinematographic films;

  6. Persons engaged in milling, processing, manufacturing or repacking goods for others;

  7. Proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts, theatres, and movie houses;

  8. Proprietors or operators of restaurants, refreshment parlors, cafes, and other eating places, including clubs and caterers;

  9. Dealers in securities;

  10. Lending investors;

  11. 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 relative to their transport of goods or cargoes;

  12. Common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines;

  13. Sale of electricity by generating, transmission by any entity including the National Grid Corporation of the Philippines (NGCP), and distribution companies including electric cooperatives shall be subject to twelve percent (12%) VAT on their gross receipts.;

  14. Franchise grantees of electric utilities, telephone and telegraph, radio and/or television broadcasting and all other franchise grantees, except franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed Ten Million Pesos (P10,000,000.00), and franchise grantees of gas and water utilities;

  15. Non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and

  16. Similar services regardless of whether or not the performance thereof calls for the exercise of use of the physical or mental faculties.

The phrase "sale or exchange of services" shall likewise include:

  1. The lease of 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;

  2. The lease or the use of, or the right to use of any industrial, commercial or scientific equipment;

  3. The supply of scientific, technical, industrial or commercial knowledge or information;

  4. 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;

  5. 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;

  6. 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;

  7. The lease of motion picture films, films, tapes and discs; and

  8. The lease or the use of or the right to use radio, television, satellite transmission and cable television time.

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. It is a taxable transaction for VAT purposes, but shall not result in any output tax. However, the input tax on purchases of goods, properties or services, related to such zero-rated sales, shall be available as tax credit or refund in accordance with existing regulations.

What transactions are considered as zero-rated sales?

The following services performed in the Philippines by VAT-registered person shall be subject to zero percent (0%) rate:

  1. 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);

  2. Services other than processing, manufacturing or repacking rendered to a person engaged in business conducted outside the Philippines or to a non-resident person engaged in business who is outside the Philippines when the services are performed, 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);

  3. 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;

  4. Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use thereof; Provided, that these services shall be exclusively for international shipping or air transport operations.  (Thus, the services referred to herein shall not pertain to those made to common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines, the same being subject to twelve percent (12%) VAT under Sec. 108 of the Tax Code, as amended);

  5. 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;

  6. Transport of passengers and cargo by domestic air or sea carriers from the Philippines to a foreign country. (Gross receipts of international air carriers and international sea carriers doing business in the Philippines derived from transport of passengers and cargo from the Philippines to another country shall be exempt from VAT; however they are still liable to a percentage tax of three percent (3%) based on their gross receipts derived from transport of cargo from the Philippines to another country as provided for in Sec. 118 of the Tax Code, as amended); and

  7. Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other shipping sources using technologies such as fuel cells and hydrogen fuels; Provided, however that zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power.

The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:

  1. Export sales
    1. The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported, paid in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

    2. The sale of raw materials or packaging materials to a non-resident buyer for delivery to as a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;

    3. The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;

    4. Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws; and

    5. The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air transport operations; Provided, That the goods, supplies, equipment, and fuel shall be used exclusively for international shipping or air transport operations; Provided, that the same is limited to goods, supplies, equipment and fuel that shall be used in the transport of goods and passengers from a port in the Philippines directly to a foreign port, or vice-versa without docking or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the purpose of unloading passengers and/or cargoes that originated from abroad, or to load passengers and/or cargoes bound for abroad;Provided, further, that if any portion of such fuel, goods or supplies is used for purposes other than the mentioned in this paragraph, such portion of fuel, goods and supplies shall be subject to twelve percent (12%) output VAT.

  2. Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement

Sale of goods or property to persons or entities who are tax-exempt under special laws or international agreements to which the Philippines is a signatory, such as, Asian Development Bank (ADB), International Rice Research Institute (IRRI), subject such sales to zero rate.

What are the transactions which are no longer subject to zero-percent (0%)?

  1. Sale of gold to BSP

  2. Foreign-currency denominated sales

Upon the successful establishment and implementation of an enhanced VAT refund system by the Department of Finance (DOF), what are the transactions that will now be subject to twelve percent (12%) and no longer be subject to zero percent (0%)?

  1. The sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;

  2. The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;

  3. Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws

  4. 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); and

  5. 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.

What transactions are considered deemed sales?

The following transactions are considered as deemed sales:

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. Transfer of goods or properties not in the course of business can take place when VAT-registered person withdraws goods from his business for his personal use;

  1. Distribution or transfer to:
    • Shareholders or investors as share in the profits of the VAT-registered person; or

    • Creditors in payment of debt or obligation

  2. Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned. Consigned goods returned by the consignee within the 60-day period are not deemed sold;

  3. Retirement from or cessation of business, with respect to all goods on hand, whether capital goods, stock-in-trade, supplies or materials as of the date of such retirement or cessation, whether or not the business is continued by the new owner or successor. The following circumstances shall, among others, give rise to transactions "deemed sale";

    • Change of ownership of the business. There is a change in the ownership of the business when a single proprietorship incorporated; or the proprietor of a single proprietorship sells his entire business

    • Dissolution of a partnership and creation of a new partnership which takes over the business.

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.

What are the VAT-exempt transactions?

  1. 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 genetic materials therefore;

  2. 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 considered as pets);

  3. Importation of personal and household effects belonging to residents of the Philippines returning from abroad and non-resident citizens coming to resettle in the Philippines; Provided, that such goods are exempt from custom duties under the Tariff and Customs Code of the Philippines;

  4. Importation of professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects ( except vehicles, vessels, aircrafts machineries and other similar goods for use in manufacture which are subject to duties, taxes and other charges) belonging to persons coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other countries, such parties hereinafter referred to as overseas Filipinos, in quantities and of the class suitable to the profession, rank or position of the persons importing said items, for their own use and not barter or sale, accompanying such persons, or arriving within a reasonable time; Provided, That the Bureau of Customs may, upon the production of satisfactorily evidence that such persons are actually coming to settle in the Philippines and that the goods are brought from their place of residence, exempt such goods from payment of duties and taxes.

  5. Services subject to percentage tax under Title V of the Tax Code, as amended;

  6. Services by agricultural contract growers and milling for others of palay into rice, corn into grits, and sugar cane into raw sugar;

  7. Medical, dental, hospital and veterinary services except those rendered by professionals;

  8. Educational services rendered by private educational institutions duly accredited by the Department of Education (DepED), the Commission on Higher Education (CHED) and the Technical Education and Skills Development Authority (TESDA) and those rendered by the government educational institutions;

  9. Services rendered by individuals pursuant to an employer-employee relationship;

  10. 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;

  11. Transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws except those granted under P.D. No. 529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949;

  12. Sales by agricultural cooperatives duly registered and in good standing with the Cooperative Development Authority (CDA) to their members, as well as 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;

  13. Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered and in good standing with the Cooperative Development Authority;

  14. Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with and in good standing with CDA; Provided, that the share capital contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00) and regardless of the aggregate capital and net surplus ratably distributed among the members;

  15. Export sales by persons who are not VAT-registered;

  16. The following sales of real properties:

    1. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business.

    2. Sale of real properties utilized for low-cost housing as defined by RA No. 7279, otherwise known as the "Urban Development and Housing Act of 1992" and other related laws, such as RA No. 7835 and RA No. 8763;

    3. Sale of real properties utilized for specialized housing as defined under RA No. 7279, and other related laws, such as RA No. 7835 and RA No. 8763, wherein price ceiling per unit is Php 450,000.00 or as may from time to time be determined by the HUDCC and the NEDA and other related laws;

    4. Sale of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and below, or house and lot and other residential dwellings valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below, as adjusted using latest Consumer Price Index values.   (If two or more adjacent lots are sold or disposed in favor of one buyer, for the purpose of utilizing the lots as one residential lot, the sale shall be exempt from VAT only if the aggregate value of the lots do not exceed One Million Five Hundred Thousand Pesos (P1,500,000.00).  Adjacent residential lots, although covered by separate titles and/or separate tax declarations, when sold or disposed to one and the same buyer, whether covered by one or separate Deed of Conveyance, shall be presumed as a sale of one residential lot.)

  17. Lease of residential units with a monthly rental per unit not exceeding Fifteen Thousand Pesos (P15,000.00), regardless of the amount of aggregate rentals received by the lessor during the year; Provided, that not later than January 31, 2009 and every three (3) years thereafter, the amount of P10,000.00 shall be adjusted to its present value using the Consumer Price Index, as published by the Philippine Statistics Authority (Formerly known as NSO);

  18. 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;

  19. Transport of passengers by international carriers;

  20. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine equipment and spare parts thereof for domestic or international transport perations; Provided, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement program of Maritime Industry Authority (MARINA);

  21. Importation of fuel, goods and supplies by persons engaged in international shipping or air transport operations; Provided, that the said fuel, goods and supplies shall be used exclusively or shall pertain to the transport of goods and/or passenger from a port in the Philippines directly to a foreign port, or vice-versa, without docking or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the purpose of unloading passengers and/or cargoes that originated form abroad, or to load passengers and/or cargoes bound for abroad; Provided, further, that if any portion of such fuel, goods or supplies is used for purposes other that the mentioned in the paragraph, such portion of fuel, goods and supplies shall be subject to 12% VAT;

  22. Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, such as money changers and pawnshops, subject to percentage tax under Sections 121 and 122, respectively of the Tax Code; and

  23. Sale or lease of goods and services to senior citizens and persons with disabilities, as provided under Republic Act Nos. 9994 (Expanded Senior Citizens Act of 2010) and 10754 (An Act Expanding the Benefits and Privileges of Persons with Disability), respectively;

  24. Transfer of property in merger or consolidation (pursuant to Section 40(C)(2) of the Tax Code, as amended);

  25. Association dues, membership fees, and other assessments and charges collected on a purely reimbursement basis by homeowners’ associations and condominium established under Republic Act No. 9904 (Magna Carta for Homeowners and Homeowner’s Association) and Republic Act No. 4726 (The Condominium Act), respectively;

  26. Sale of gold to the Banko Sentral ng Pilipinasn (BSP) (previously zero-rated transaction);

  27. Sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension (beginning on January 1, 2019 as determined by the Department of Health); and

  28. 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 do not exceed the amount of Three Million Pesos (Php 3,000,000.00).  Note: Self-employed individuals and professionals availing of the 8% on gross sales and/or receipts and other non-operating income, under Sections 24 (A)(2)(b) and 24 (A)(2)(c)(2) of the NIRC shall also be exempt from the payment of twelve (12%) VAT.

What is the difference between a low-cost and a socialized housing?

“Low-cost housing” refers to housing projects intended for homeless low-income family beneficiaries, undertaken by the Government or private developers, which may either be a subdivision or a condominium registered and licensed by the Housing and Land Use Regulatory Board/Housing (HLURB) under BP Blg. 220, PD No. 957 or any other similar law, wherein the unit selling price is within the selling price per unit as set by the Housing and Urban Development Coordinating Council (HUDCC) pursuant to RA No. 7279 otherwise known as the “Urban Development and Housing Act of 1992” and other laws.

“Socialized housing” refers to housing programs and projects covering houses and lots or home lots only undertaken by the Government or private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberated terms on interest payments, and such other benefits in accordance with the provision or RA No. 7279, otherwise known as the “Urban Development and Housing Act of 1992” and RA No. 7835 and RA No. 8763.  It shall also refer to projects intended for the underprivileged and homeless wherein the housing package selling price is within the lowest interest rates under the Unified Lending Program (UHLP) or any equivalent housing program of the Government, the private sector or non-government organizations.


II.   RELIEF-Related Queries

What is "RELIEF"?

RELIEF means Reconciliation of Listing 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.

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 (P2,500,000.00) are required to submit a Summary List of Sales.

Who are required to submit Summary List of Purchases?

VAT taxpayers with quarterly total purchases (net of VAT) of goods and services, including importation exceeding One Million Pesos (P1,000,000.00) are required to submit Summary List of Purchases.

What are the Summary Lists required to be submitted?

  • Quarterly Summary List of Sales to Regular Buyers/ Customers Casual Buyers/ Customers and Output Tax
  • Quarterly Summary of List of Local Purchases and Input tax; and
  • Quarterly Summary List of Importation.

When is the deadline for submission of the above Summary Lists?

The Summary List of Sales/Purchases, whichever is applicable, shall be submitted on or before the twenty-fifth (25th) day of the month following the close of the taxable quarter -- calendar quarter or fiscal quarter.

What are the penalties for failure to submit the Summary Lists?

  • For failure to file, keep or supply a statement, list or information required on the date prescribed shall pay and administrative penalty of One Thousand Pesos (P1,000.00) for each such failure, unless it is shown that such failure is due to reasonable cause and not to willful neglect; and
  • An aggregate amount to be imposed for all such failures during a taxable year shall not exceed Twenty-Five Thousand Pesos (P25,000.00).

III.   What is the treatment for Withholding of VAT on Government Money Payments?

The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and/or services taxed at twelve percent (12%) VAT pursuant to Sections 106 and 108 of the Tax Code, deduct and withhold a Final VAT due at the rate of five percent (5%) of the gross payment.

The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the seller. The remaining seven percent (7%) effectively accounts for the standard input VAT for sales of goods or services to government or any of its political subdivisions, instrumentalities or agencies including GOCCs in lieu of the actual input VAT directly attributable or ratably apportioned to such sales. Should actual input VAT attributable to sales to government exceed seven percent (7%) of gross payments, the excess may form part of the sellers' expense or cost. On the other hand, if actual input VAT attributable to sale to government is less than seven percent (7%) of gross payment, the difference must be closed to expense or cost.

The government or any of its political subdivisions, instrumentalities or agencies including GOCCs, as well as private corporation, individuals, estates and trusts, whether large or non-large taxpayers, shall withhold twelve percent (12%) VAT with respect to the following payments:

Lease or use of properties or property rights owned by non-residents; and

Other services rendered in the Philippines by non-residents.


IV.   In what grounds can the Commissioner of Internal Revenue suspend the business operations of a taxpayer?

The Commissioner or his authorized representative is empowered to suspend the business operations and temporarily close the business establishment of any person for any of the following violations:

  • In the case of a VAT-registered Person:

    • Failure to issue receipts or invoices;

    • Failure to file a value-added-tax return as required under Section 114; or

    • Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct taxable sales or receipts for the taxable quarter.

  • Failure to any Person to Register as Required under Section 236

    • The temporary closure of the establishment shall be for the duration of not less than five (5) days and shall be lifted only upon compliance with whatever requirements prescribed by the Commissioner in the closure order.

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 Index for Income Tax:

 Income Tax Description

         Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions if any, authorized for such types of income, by the Tax Code, as amended, or other special laws.


Who are Required to File Income Tax Returns?

Individuals

  • Resident citizens receiving income from sources within or outside the Philippines

    • Employees deriving purely compensation income from two or more employers, concurrently or successively at any time during the taxable year

    • Employees deriving purely 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

    • Self-employed individuals receiving income from the conduct of trade or business and/or practice of profession

    • Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession

    • 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

  • Aliens, whether resident or not, receiving income from sources within the Philippines

Non-Individuals

  • Corporations including partnerships, no matter how created or organized.

  • 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

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 Annual Income Tax For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income)

BIR Form 1700Annual Income Tax For Individuals 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. Duly approved Tax Debit Memo, if applicable

  3. Proofs of Foreign Tax Credits, if applicable

  4. Income Tax Return previously filed and proof of payment, if filing an amended return for the same taxable year.

Procedures

  1. For Electronic Filing and Payment System (eFPS) Filer

    1. Fill-up applicable fields in the BIR Form No. 1700

    2. Pay electronically by clicking the "Proceed to Payment" button and fill-up the required fields in the "eFPS Payment Form" click "Submit" button.

    3. Receive payment confirmation from eFPS-AABs for successful e-filing and e-payment.

  2. For Non-eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1700 in the downloaded Electronic Bureau of Internal Revenue Form (eBIRForm) Package
    2. Print the duly accomplished BIR Form No. 1700

    3. Proceed to the nearest Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1700, together with the required attachments and your payment.

    4. 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 registered and present the duly accomplished BIR Form 1700, together with the required attachments and your payment.

    5. 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 Manual Filer

    1. Fill-up the BIR Form No. 1700 in triplicate copies.

    2. Proceed to the Revenue District Office where you are registered or to any Tax Filing Center established by the BIR and present the duly accomplished BIR Form 1700, together with the required attachments.

    3. 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 taxable income for calendar year 2018 and thereafter

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 Annual Income Tax For Individuals, Estates, and Trusts

BIR Form 1701 - Annual Income Tax Return Individuals, Estates and Trusts

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. Duly approved Tax Debit Memo, if applicable

  5. Proof of Foreign Tax Credits, if applicable

  6. Income Tax Return previously filed and proof of payment, if filing an amended return for the same year

  7. Account Information Form (AIF) or the Certificate of the independent Certified Public Accountant (CPA) with Audited Financial Statements if the gross annual sales, earnings, receipts or output exceed three million pesos (P3,000,000.00)

  8. Account Information Form or Financial Statements not necessarily audited by an independent CPA if the gross annual sales, earnings, receipts or output do not exceed P3,000,000.00 and is subject to graduated income tax rates under Section 24(A)(2)(a)

  9. Proof of prior year’s excess tax credits, if applicable

Procedures

  1. For eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1701

    2. Pay electronically by clicking the “Proceed to Payment” button and fill-up the required fields in the “eFPS Payment Form” then click “Submit” button.

    3. Receive payment confirmation from eFPS-AABs for successful e-filing and e-payment.

  2. For Non-eFPS Filer

    1. Fill-up fields in the BIR Form No. 1701 in the downloaded Electronic Bureau of Internal Revenue Form (eBIRForm) Package

    2. Print the duly accomplished BIR Form No. 1701

    3. Proceed to the nearest Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1701, together with the required attachments and your payment.

    4. 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 registered and present the duly accomplished BIR Form 1701, together with the required attachments and your payment.

    5. 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 Manual Filer

    1. Fill-up the BIR Form No. 1701 in triplicate copies.

    2. Proceed to the Revenue District Office where you are registered or to any Tax Filing Center established by the BIR and present the duly accomplished BIR Form 1701, together with the required attachments.

    3. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative.

Deadline

Final Adjustment Return or Annual Income Tax Return - On or before the 15th day of April of each year covering income for calendar year 2018 and thereafter

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Account Information Form For Self-Employed Individuals, Estates And Trusts (Including Those With Mixed Income, i.e., Compensation Income and Income from Business and/or Practice of Profession)

BIR Form 1701 AIF - Account Information Form for Self-Employed Individuals, Estates and Trusts (Including those with Mixed Income, i.e., Compensation Income and Income from Business and/or Practice of Profession) and Estates and Trusts (Engaged in Trade or Business)

NOTE: Pursuant to Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended, in relation to Revenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output exceed P3,000,000 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 taxable income for calendar year 2018 and thereafter

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Quarterly Income Tax For Individuals, Estates And Trusts Including Those With Mixed Income, i.e., Compensation Income and Income from Business and/or Practice of Profession

BIR Form 1701Q - Quarterly Income Tax Return For Individuals, Estates and Trusts

Documentary Requirements

  1. Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable

  2. Duly approved Tax Debit Memo, if applicable

  3. Proof of other payment/s made, if applicable

  4. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable

Procedures

  1. For eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1701Q

    2. Pay electronically by clicking the “Proceed to Payment” button and fill-up the required fields in the “eFPS Payment Form” then click “Submit” button.

    3. Receive payment confirmation from eFPS-AABs for successful e-filing and e-payment.

  2. For Non-eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1701Q in the downloaded Electronic Bureau of Internal Revenue Form (eBIRForm) Package

    2. Print the duly accomplished BIR Form No. 1701Q

    3. Proceed to the nearest Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1701Q, together with the required attachments and your payment.

    4. 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 registered and present the duly accomplished BIR Form 1701Q, together with the required attachments and your payment.

    5. Receive your copy of the duly stamped and validated tax return and BIR prescribed deposit slip from the teller of the AABs or Electronic Revenue Official Receipt (eROR) from the Revenue Collection Officer/duly Authorized City or Municipal Treasurer.

  3. For Manual Filer

    1. Fill-up the BIR Form No. 1701Q in triplicate copies (Compensation Income need not be reported in the Quarterly Income Tax Return and is to be declared only on the Annual Income Tax Return).

    2. Proceed to the Revenue District Office where you are registered or to any Tax Filing Center established by the BIR and present the duly accomplished BIR Form 1701Q, together with the required attachments.

    3. Receive your copy of the duly stamped and validated form from the RDO.

Deadlines

  • May 15 of the current taxable year– for the first quarter
  • August 15 of the current taxable year – for the second quarter
  • November 15 of the current taxable year – for the third quarter

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Annual Income Tax For Corporations And Partnerships

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. Income tax return previously filed and proof of payment, if amended return is filed for the same taxable year

  6. Account Information Form (AIF) or the Certificate of the independent CPA with Audited Financial Statements, if the gross annual sales, earnings, receipts or output exceed P3,000,000.

  7. Proof of prior year’s excess tax credits, if applicable

Procedures

  1. For eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1702

    2. Pay electronically by clicking the “Proceed to Payment” button and fill-up the required fields in the “eFPS Payment Form” then click “Submit” button.

    3. Receive payment confirmation from eFPS-AABs for successful e-filing and e-payment.

  2. For Non-eFPS Filer

    1. Fill-up fields in the BIR Form No. 1702 in the downloaded Electronic Bureau of Internal Revenue Form (eBIRForm) Package

    2. Print the duly accomplished BIR Form No. 1702

    3. Proceed to the nearest Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1702, together with the required attachments and your payment.

    4. 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 registered and present the duly accomplished BIR Form 1702, together with the required attachments and your payment.

    5. 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 Manual Filer

    1. Fill-up the BIR Form No. 1702 in triplicate copies.

    2. Proceed to the Revenue District Office where you are registered or to any Tax Filing Center established by the BIR and present the duly accomplished BIR Form 1702, together with the required attachments.

    3. Receive your copy of the duly stamped and validated form from the RDO/Tax Filing Center representative.

Deadline

Final Adjustment Return or Annual Income Tax Return - On or before the 15th day of the fourth month following the close of the taxpayer’s taxable year

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Account Information Form For Corporations And Partnerships

BIR Form 1702 AIF - Account Information Form (For Corporations and Partnerships)

NOTE: Pursuant to Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended, in relation toRevenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output exceed P3,000,000 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 taxpayer’s taxable year

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Quarterly Income Tax For Corporations And Partnerships

BIR Form 1702Q - Quarterly Income Tax Return (For Corporations and Partnerships)

Documentary Requirements

  1. Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable

  2. Duly approved Tax Debit Memo, if applicable

  3. Previously filed return, if an amended return is filed for the same quarter

Procedures

  1. For eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1702Q

    2. Pay electronically by clicking the “Proceed to Payment” button and fill-up the required fields in the “eFPS Payment Form” then click “Submit” button.

    3. Receive payment confirmation from eFPS-AABs for successful e-filing and e-payment.

  2. For Non-eFPS Filer

    1. Fill-up applicable fields in the BIR Form No. 1702Q in the downloaded Electronic Bureau of Internal Revenue Form (eBIRForm) Package

    2. Print the duly accomplished BIR Form No. 1702Q

    3. Proceed to the nearest Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1702Q, together with the required attachments and your payment.

    4. 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 registered and present the duly accomplished BIR Form 1702Q, together with the required attachments and your payment.

    5. Receive your copy of the duly stamped and validated tax return and BIR prescribed deposit slip from the teller of the AABs or Electronic Revenue Official Receipt (eROR) from the Revenue Collection Officer/duly Authorized City or Municipal Treasurer.

  3. For Manual Filer

    1. Fill-up the BIR Form No. 1702Q in triplicate copies.

    2. Proceed to the Revenue District Office where you are registered or to any Tax Filing Center established by the BIR and present the duly accomplished BIR Form 1702Q, together with the required attachments.

    3. Receive your copy of the duly stamped and validated form from the RDO.

Deadline

Corporate Quarterly Declaration or Quarterly Income Tax Return - On or before the 60th day following the close of each of the quarters of the taxable year

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Improperly Accumulated Earnings Tax For Corporations

BIR Form 1704 - Improperly Accumulated Earnings Tax Return (For Corporations)

Documentary Requirements

  1. Photocopy of Annual Income Tax Return (BIR Form 1702) with Audited Financial Statements and/or Account Information Form of the covered taxable year duly received by the BIR; and

  2. Sworn declaration as to dividends declared taken from the covered year's earnings and the corresponding tax withheld, if any.

Procedures

  1. Fill-up BIR Form 1704 in triplicate.

  2. If there is payment:

    • Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are registered 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 registered 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 registered 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 taxable year

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Annual Income Information Form for General Professional Partnerships

Sec. 55. Returns of General Professional Partnership (Tax Code of 1997, as amended)

Every general professional partnership shall file, in duplicate, a return of its income, except income exempt under Section 32 (B) of this Title, setting forth the items of gross income and of deductions allowed by this Title, and the names, Taxpayer Identification Numbers (TIN), addresses and shares of each of the partners.

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  Income Tax Rates

  1. For Individual Citizens and Resident Aliens Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession

    1. Graduated Income Tax Rates under Section 24(A)(2) of the Tax Code of 1997, as amended by Republic Act No. 10963 

      Amount of Net Taxable Income Rate
      Over But Not Over  
      - P250,000 0%
      P250,000 P400,000 20% of the excess over P250,000
      P400,000 P800,000 P30,000 + 25% of the excess over P400,000
      P800,000 P2,000,000 P130,000 + 30% of the excess over P800,000
      P2,000,000 P8,000,000 P490,000 + 32% of the excess over P2,000,000
      P8,000,000   P2,410,000 + 35% of the excess over P8,000,000
    2. For Purely Self-Employed Individuals and/or Professionals Whose Gross Sales/Receipts and Other Non-Operating Income Do Not Exceed the VAT Threshold of P3,000,000, the tax shall be, at the taxpayer’s option:

      1. 8% Income Tax on Gross Sales or Gross Receipts in Excess of P250,000 in Lieu of the Graduated Income Tax Rates and the Percentage Tax; Or

      2. Income Tax Based on the Graduated Income Tax Rates

    3. For Individuals Earning Both Compensation Income and Income from Business and/or Practice of Profession, their income taxes shall be:

      1. For Income from Compensation: Based on Graduated Income Tax Rates; and

      2. For Income from Business and/or Practice of Profession:

        1. If the total Gross Sales/Receipts Do Not Exceed VAT Threshold of P3,000,000, the Individual Taxpayer May Opt to Avail:

          1. 8% Income Tax on Gross Sales/Receipts and Other Non-Operating Income in Lieu of the Graduated Income Tax Rates and the Percentage Tax; Or

          2. Income Tax Based on Graduated Income Tax Rates

        2. If the total Gross Sales/Receipts Exceed VAT Threshold of P3,000,000

          1. Income Tax Based on Graduated Income Tax Rates

    4. On Certain Passive Income of Individual Citizens and Resident Aliens

      Passive Income Tax Rate
      1. Interest from currency deposits, trust funds and deposit substitutes 20%
      2. Royalties (on books as well as literary & musical compositions) 10%
          - In general 20%
      3. Prizes (P10,000 or less ) Graduated Income Tax Rates
          - Over P10,000 20%
      4. Winnings (except from PCSO and Lotto amounting to P10,000 or less ) 20%
      -   From PCSO and Lotto amounting to P10,000 or less exempt
      5. Interest Income from a Depository Bank under the Expanded Foreign Currency Deposit System 15%
      6. Cash and/or Property Dividends received by an individual from a domestic corporation/ joint stock company/ insurance or mutual fund companies/ Regional Operating Headquarter of multinational companies  10%
      7. Share of an individual in the distributable net income after tax of a partnership (except GPPs)/ association, a joint account, a joint venture or consortium taxable as corporation of which he is a member or co-venture 10%
      8. Capital gains from sale, exchange or other disposition of real property located in the Philippines, classified as capital asset 6%
      9. Net Capital gains from sale of shares of stock not traded in the stock exchange 15% 

      10. Interest Income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP)

      Upon pre-termination before the fifth year, there should be imposed on the entire income from the proceeds of the long-term deposit based on the remaining maturity thereof:

      Holding Period

      Exempt
      - 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%
  2. For Non-Resident Aliens Not Engaged in Trade or Business 

    A. Tax Rate in General – on taxable income from all sources within the Philippines same manner as individual citizen and resident alien individual
    B. Certain Passive Income Tax Rates
    1. Interest from currency deposits, trust funds and deposit substitutes 20%
    2. Royalties (on books as well as literary & musical compositions) 10%
        - In general 20%
    3. Prizes (P10,000 or less ) Graduated Income Tax Rates
        - Over P10,000 20%
    4. Winnings (except from PCSO and Lotto) 20%
       -  From PCSO and Lotto exempt
    5. Cash and/or Property Dividends received from a domestic corporation/ joint stock company/ insurance/ mutual fund companies/ Regional Operating Headquarter of multinational companies 20%
    6. Share of a non-resident alien individual in the distributable net income after tax of a partnership (except GPPs) of which he is a partner or from an association, a joint account, a joint venture or consortium taxable as corporation of which he is a member or co-venture 20%

    7. Interest Income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP)

    Upon pre-termination before the fifth year, there should be imposed on the entire income from the proceeds of the long-term deposit based on the remaining maturity thereof:

    Holding Period

    Exempt
      - 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%
    8. Capital from the sale, exchange or other disposition of real property located in the Philippines classified as capital asset 6%
    9. Net Capital gains from sale of shares of stock not traded in the Stock Exchange  
       - Not over P100,000 5%
       - Any amount in excess of P100,000 10%
  3. For Non-resident Aliens Not Engaged in Trade or Business 

    1. Gross amount of income derived from all sources within the Philippines 25%
    2. Capital gains from the exchange or other disposition of real property located in the Philippines 6%
    3. Net Capital gains from the sale of shares of stock not traded in the Stock Exchange  
    - Not  Over  P100,000 5%
    - Any amount in excess of P100,000 10%
  4. For Alien Individuals Employed by Regional Headquarters (RHQ) or Area Headquarters and Regional Operating Headquarters (ROH) of Multinational Companies, Offshore Banking Units (OBUs), Petroleum Service Contractor and Subcontractor  

    On the gross income consisting of salaries, wages, annuities, compensation, remuneration and other emoluments, such as honoraria and emoluments derived from the Philippines Graduated Income Tax Rates
  5. For General Professional Partnerships 

    Net Income of the Partnerships 0%
  6. For Domestic Corporations 

    Rates of Tax on Certain Passive Income of Corporations Tax Rate
    1. Interest from currency deposits, trust funds, deposit substitutes and similar arrangements received by domestic corporations 20%
    2. Royalties from sources within the Philippines 20%
    3. Interest Income from a Depository Bank under Expanded Foreign Currency Deposit System 15%
    4. Cash and Property Dividends received by a domestic corporation from another domestic corporation 0%
    5. Capital gains from the sale, exchange or other disposition of lands and/or building 6%
    6. Net Capital gains from sale of shares of stock not traded in the stock exchange 15% 

    *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.

  7. For Resident Foreign Corporation 

    1) a. In General – on taxable income derived from sources within the Philippines 30%
        b. Minimum Corporate Income Tax – on gross income 2%
        c. Improperly Accumulated Earnings – on improperly accumulated taxable income 10%
    2) International Carriers – on gross Philippine billings 2 ½ %
    3) Regional Operating Headquarters of Multinational Companies– on taxable income 10%
    4.) Regional or Area Headquarters of Multinational Companies exempt
    5) Corporation Covered by Special Laws Rate specified under the respective special laws
    6) Offshore Banking Units (OBUs) 10%
    In general – Income derived by OBUs from foreign currency transactions with non-residents, other OBUs, local commercial banks and branches of foreign banks authorized by BSP Exempt
        On interest income derived from foreign currency loans granted to residents other than offshore banking units or local commercial banks, local branches of foreign banks authorized by BSP to transact business with OBUs 10%
    7) Income derived under the Expanded Foreign Currency Deposit System  
       Interest income derived by a depository bank under the expanded foreign currency deposit system. 7 ½ %
       On Income derived by depository banks under the expanded foreign currency deposit systems from foreign currency transactions with non-residents, OBUs in the Philippines, local commercial banks including branches of foreign banks that may be authorized by BSP exempt
        On interest income derived from foreign currency loans granted by depository banks under the expanded foreign currency deposit systems to residents other than offshore banking units in the Philippines or other depository banks under the expanded system 10%
    8.) Branch Profit Remittances – on total profits applied or earmarked for remittance without any deduction for the tax component thereof (except those activities which are registered with the Philippines Economic Zone Authority) 15%
    9.) Interest from currency deposits, trust funds, deposit substitutes and similar arrangements 20%
    10. Royalties derived from sources within the Philippines 20%

 Related Revenue Issuances

RMO No. 23-2018, RR No. 8-2018, RA No. 10963, RR No. 12-2007, RR No. 14-2002, RA No. 9337, RR No. 9-98, RR No. 1-98, RR No. 5-97, RR No. 4-96

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 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 as amended, less the deductions, 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 items
  • 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 not exceeding P90,000
  • GSIS, SSS, Medicare and other contributions
  • Gains from the sale of bonds, debentures or other certificate of indebtedness with a maturity of more than five (5) years
  • Gains from redemption of shares in mutual fund

6) What are the allowable deductions from gross income?

a)  *Optional Standard Deduction - an amount not exceeding 40% of the gross sales/receipts for individuals and gross income for corporations; or

b)  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
* Not allowed to non-resident alien individual
* A General Professional Partnership (GPP) may avail of the OSD only once, either by the GPP or the partners comprising the partnership

7) Who are not required to file Income Tax returns?

a. An individual earning purely compensation income whose taxable income does not exceed P250,000.00

b. An individual whose income tax has been withheld correctly by his employer, provided that such individual has only one employer for the taxable year

c. An individual whose sole income has been subjected to final withholding tax or who is exempt from income tax pursuant to the Tax Code and other special laws.

d. An individual who is a minimum wage earner

e. 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 employee’s spouse also complies with all 3 conditions stated above;
- the employer files the annual information return (BIR Form No. 1604-CF); and
- the employer issues BIR Form No. 2316 (Oct 2002 ENCS version) to each employee.

8.) Who are exempt from Income Tax?

a. Income from abroad of a non-resident citizen who is:

i. 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

ii. 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

iii. 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

iv. 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.

b. Overseas Filipino Worker, including overseas seaman

An individual citizen of the Philippines who is working and deriving income from abroad as an overseas Filipino 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 Filipino 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.

c. General Professional Partnership

d. Government Service Insurance System (GSIS)

e. Social Security System (SSS)

f. Philippine Health Insurance Corporation (PHIC)

g. Local Water Districts (LWD)

9) What are the procedures in filing Income Tax returns (ITRs)?

a. 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, file the return 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.

b. For “no payment” ITRs -- refundable, break-even, exempt and no operation/transaction, including returns to be paid on 2nd installment and returns paid through a Tax Debit Memo(TDM)

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, they shall be filed with an Authorized Agent Bank (AAB) or Collection Officer/Deputized Municipal Treasurer (in places where there are no AABs), for collection of necessary penalties.

10) How is Income Tax payable of individuals (resident citizens and non-resident citizens) computed?

A. Based on Graduated Income Tax Rate

Gross Income P ___________
Less: Allowable Deductions (Itemized or Optional) ___________
Net Taxable Income P ___________
Multiply by Tax Rate (0% to 35%) ____________
Income Tax Due P ___________
Less: Tax Withheld (per BIR From 2316) ____________
Income Tax Payable P____________

B. Based on Preferential Tax Rate of 8%

i. Taxpayers source of income is purely from self-employment

Gross Sales/Receipts P ___________
Add: Non-operating Income ____________
Gross Taxable Income P ___________
Less: Amount allowed as deduction under Sec. 24 (A)(2)(b) of NIRC, as amended      250,000.00
Net Taxable Income ___________
Multiply by Tax Rate                   8%
Income Tax Due P ___________
Tax Withheld (per BIR From 2307) ____________
Income Tax Payable ___________

 ii. Mixed Income Earner

On Compensation  
Total Compensation Income P ___________
Less: Non-taxable Income ____________ 
          13th month pay and other benefits (max)         90,000.00
Taxable Compensation Income P ----------------
Multiply by Tax Rate (0% to 35%) ____________ 
Tax Due on Compensation P ___________
   
On Business Income  
Gross Sales/Receipts P ___________
Add: Non-operating Income ____________
Taxable Business Income P ___________
Multiply by Tax Rate                   8%
Tax Due on Business Income P ___________
   
Total Income Tax Due (Compensation + Business) P ___________
Tax Withheld (per BIR From 2316/2307) ____________
Income Tax Payable P ___________

11) How is Income Tax Paid?

A. Through withholding 

a. Individual Payee: Rate
If the gross annual business or professional income did not exceed P3,000,000.00 5%
If the gross annual business or professional income is more than P3,000,000.00 10%
b. Non-individual Payee Rate
If the gross annual business or professional income did not exceed P720,000.00 10%
If the gross annual business or professional income is more than P720,000.00 15%

B. Pay the balance as you file the tax return, computed as follows:

Income Tax Due P ___________
Less: Withholding Tax ___________
Net Income Tax Due* P ___________

*Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to shall be paid at the time the return is filed and the second installment on or before October 15 following the close of the calendar year to the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered

12) 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 as of the end of taxable year (whether calendar or fiscal year, depending on the accounting period employed) is imposed on a corporation taxable under Title II of the Tax Code, as amended, beginning on the 4th taxable year immediately following the taxable year in which such corporation commenced its business operations when the MCIT is greater than the regular income tax.  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 but the amount of the regular income tax.

13) 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 or to preferential rates under special laws do not fall within the coverage of the MCIT.

For corporations whose operations or activities are partly covered by the regular income tax and partly covered by the preferential rate under special law, the MCIT shall apply the regular income tax rate on its operations not covered by the tax incentives. Newly established corporations or firms which are on their first 3 years of operations are not covered by the MCIT.

14) When does a corporation start to be covered by the MCIT?

A corporation starts to be covered by the MCIT on the 4th year following the year of the commencement 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.

15) When is the MCIT reported and paid? Is it quarterly?

The MCIT is paid on an annual basis and quarterly basis. The rules are governed by Revenue Regulations No. 12-2007.

16) How is MCIT computed?

The MCIT is 2% of the gross income of the corporation at the end of the taxable year.

The computation and the payment of MCIT, shall likewise apply at the time of filing the quarterly corporate income tax as prescribed under Section 75 and Section 77 of the Tax Code, as amended.  Thus, in the computation of the tax due for the taxable quarter, if the computed quarterly MCIT is higher than the quarterly normal income tax, the tax due to be paid for such taxable quarter at the time of filing the quarterly income tax return shall be the MCIT which is two percent (2%) of the gross income as of the end of the taxable quarter.

“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 computing 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 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.

17) What is the carry forward provision under the MCIT?

Any excess of the MCIT over the normal income tax may be carried forward and credited against the normal income tax for the three (3) immediately succeeding taxable years.

18) How would the MCIT be recorded for accounting purposes?

Any amount paid as excess minimum corporate income tax should be recorded in the corporation’s books as an asset under account title “Deferred charges-MCIT”

19) How long can we amend our income tax return?

There is no prescription period for amending the return. When the taxpayer has been issued a Letter of Authority, he can no longer amend the return.

20) Can a benefactor of a senior citizen claim him/her as additional dependent in addition to his/her 3 qualified dependent children at Php25,000 each?

No, pursuant to Revenue Regulations 2-94, the benefactor of a senior citizen cannot claim the additional exemption. Further, additional exemptions of individual taxpayers are removed under RA 10963 (Tax Reform for Acceleration and Inclusion).

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