Other Percentage Taxes Roxas, Edwin G. Valencia and Gregorio F. Transfer and Business Taxation: Principles and Laws with Accounting Applications. 6th. Vol. 1. Baguio: Valencia Educational Supply, 2013. 1 vols.
Oct 30, 2014
Other Percentage Taxes
Roxas, Edwin G. Valencia and Gregorio F. Transfer and Business Taxation: Principles and Laws with Accounting Applications. 6th. Vol. 1. Baguio: Valencia Educational Supply, 2013. 1 vols.
DEFINITIONThese are general consumption taxes imposed to Non-VAT registered business.
Is the business VAT-registered?
Yes No
Gross Receipts or sales subject to 12% output VAT and a benefit of
Input VAT on purchases
Does the annual gross receipts or sales exceed 1,919, 500?
Yes No
Gross Receipts or sales subject to 12% output VAT but no benefit of
Input VAT
Gross Receipts or sales subject to 3% percentage tax and no input tax
allowed
Businesses subject to OPT: loafbands
Life insurance companies
Amusement Places
Overseas dispatch or message from the Philippines.
Franchise
Bank and non-bank financial
institution.
Non – VAT businesses with annual sales of 1, 919, 500 and below
Domestic Carriers and keepers of
garages.Sale of shares of stock in local stock exchange
Life Insurance
A percentage tax of 5% of the total premium collected shall be imposed on collection from every person.
Life Insurance
1. The life insurance premium is refunded within 6 months.
2. Premiums collected outside the Philippines from nonresident persons.
EXEPTIONS
EXEPTIONS
Overseas dispatch or message from the Philippines.
Overseas Dispatch or Message from the Philippines
Subject to 10% TAX
BY telephone, telegraph, telewriter, exchange, and other communication equipment services
It is the expense of the caller to be withheld by the service provider.
Required to be collected and paid by the person rendering the services within 20 days after the end of each quarter
Overseas Dispatch or Message from the Philippines
Exemptions
BY telephone, telegraph, telewriter, exchange, and other communication equipment services
Government
Amt. paid for messages transmitted by the Gov’t. of the Phil or any of its
political subdivisions or instrumentalities.
Overseas Dispatch or Message from the Philippines
Exemptions
BY telephone, telegraph, telewriter, exchange, and other communication equipment services
Diplomatic Services
Amt. paid for messages transmitted by any embassy and consular offices
of a foreign government.
Overseas Dispatch or Message from the Philippines
Exemptions
BY telephone, telegraph, telewriter, exchange, and other communication equipment services
International Organizations
Amt. paid for messages transmitted by a public international organization or any of its agencies
based in the Philippines enjoying privileges, exemptions, and immunities w/c the Gov’t. of the
Philippines granted.
Overseas Dispatch or Message from the Philippines
Exemptions
BY telephone, telegraph, telewriter, exchange, and other communication equipment services
News Services
Amt. paid for messages fro any newspaper, press association, radio or television news, broadcasting agency, or news stickers services, to any other newspaper, radio or television newspaper, to a bonafide correspondent, which messages deal exclusively with the collection of news item for the dissemination of news item through public press, radio or television broadcasting or a news sticker service furnishing a general news service similar to that of the public press.
Amusement
Section 125, NIRC.
Amusement Activities OPT
Jai – alai and race tracts 30%
Cabarets, night or day clubs 18%
Cockpits 18%
Professional basketball games 15%
Boxing Exhibitions 10%
Boxing Exemption
One of the contenders for the World or Oriental Championship is
a citizen of the Philippines.
The promoter of the said boxing exhibition is a Filipino citizen. If the promoter is a corporation or association, at least 60% of its capital is owned by a Filipino
citizen.
Horse Race Winnings
10 %
Winnings or dividends derived from horse races based on the actual amount paid to person for every winning ticket after deducting the cost of the ticket.
4 %Winning from double, forcastiquinella
and trifecta bets.
Formula:
Item
Prize
Less: Cost of Ticket
Net Winnings
Multiply by amusement tax rate
Amusement Tax
Amount
P20,000
200
19,200
10%
P1,980
Franchises
Gas and
Water Franchi
se
A percentage tax of 2% on gross receipts derived from the
business covered by the law granting franchise
on gas and water utilities.
Radio and/or
Television Broadcastin
g Companies
Subject to 3% tax if gross receipts do not exceed P10,000,000.00• May opt to register as VAT
Taxpayer. • Registration is irrevocable
Gross receipts exceed the threshold. • RTBCs are mandated to register as VAT
taxpayers w/in 30 days from the end of the taxable year.
OtherFranchi
se
Subject to 12% Value Added Tax
Bank and Non-Bank Financial
Institution
Gross Receipts on Banks and Quasi – Banks
Maturity of 5 years or less 5%
More than 5 years 1%
Interest, commissions, and 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:
On dividends and equity shares in the net income of subsidiaries:
0%
Gross Receipts on Banks and Quasi – Banks
On royalties , rentals of real or personal property, profit from exchange and all other items treated as
gross income under Section 32 of the Code:
On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments
7%
7%
Gross Receipts on Other Non – Banks
From interest, commissions, discounts and all other items treated as income under the code:
Maturity of 5 years or less 5%
More than 5 years 1%
5%
Interest, commissions, and 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:
The maturity period shall be reckoned to the end as of the date of pre – termination for purposes of classifying the transaction and applying the correct rate of tax.
Pre – Termination
Non – VAT Business
Non – VAT Business
A non – VAT business with annual gross sales or gross receipts of P1,919,500 and below is subject to 3% OPT on its transactions.
Sales to Government by Non – VAT Business
Withholding percentage tax of 3%
• Seller is Non – VAT
Creditable withholding income taxes (CWIT) of
• 1% on purchases of goods• 2% on purchases of services
Domestic Carriers and Keepers of
Garages
Domestic Carriers
and Keepers of
GaragesCars for rent or hire driven by the lessee .
• except owners of bancas and owner of animal-drawn two wheeled vehicle
Transportation contractors persons who transport passengers for hire,
Domestic carriers by land for the transport of passengers
Keepers of garages.
International Air and
Shipping Carriers
(IASC)
Subject to a tax of 3% of their quarterly gross receipts.
International Carriers of foreign registry
subject to VAT on their domestic transport of both passengers and cargo
International Carriers of Philippine Registry
zero rated on their transport of passengers and cargo from the Philippine port to a foreign port.
International Air and
Shipping Carriers
(IASC)
Sale of shares of stock
IPO Percent of IPO to Outstanding Shares Tax Rate
Up to 25% 4%
Over 25% but not over 33 1/3% 2%
Over 33 1/3% 1%
Tax BaseHigher between the Gross Selling Price or Gross Value in money of the shares of stock sold, bartered or exchanged.
Sale through Local Stock Exchange
Subject to an percentage tax of ½ of 1% of the GSP or Gross Value in money.
In general, every person subject to the percentage tax shall file a quarterly return of the amount of his gross receipts, sales, or earnings and pay the tax due thereon w/in 25 days after the end of each taxable quarter.
Reminder:
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