KINDS OF TAXES

1.

Percentage tax is a business tax imposed on persons or entities who sell or lease goods, properties or services
in the course of trade or business whose gross annual sales or receipts do not exceed P 550,000 and are not VATregistered.

WHO ARE REQUIRED TO FILE PERCENTAGE TAX RETURNS Any person who is not a VAT-registered person (persons exempt from VAT under Sec. 109z of the Tax Code) -Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn two- wheeled vehicle -Operators of international carriers doing business in the Philippines -Franchise grantees of electric, gas or water utilities -Franchise grantees of radio and/or television broadcasting companies whose gross annual receipts for the preceding year do not exceed Ten Million Pesos (P 10,000,000.00) and did not opt to register as VAT taxpayers -Operators of communication equipment sending overseas dispatch, messages, or conversations from the Philippines, except on services involving the following: Government of the Philippines - for messages transmitted by the Government of the Republic of the Philippines or any of its political subdivisions and instrumentalities Diplomatic services - for messages transmitted by any embassy and consular offices of a foreign government International organizations - for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges and immunities pursuant to an international agreement News Services - for messages from any newspaper, press association, radio or television newspaper broadcasting agency, or newsticker services to any other newspaper, press association, radio or television newspaper broadcasting agency or newsticker services or to bonafide correspondents, which messages deal exclusively with the collection of news items for, or the dissemination of news items through public press, radio or television broadcasting or a newsticker service furnishing a general news service similar to that of the public press -Banks and non-bank financial intermediaries and finance companies -Life insurance companies -Agents of foreign insurance companies -Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai and race tracks -Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities -A corporate issuer / stock broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO) seller in secondary public offering of shares of stock in closely held corporations

2.

Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from the sale,
exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sale.

A. FINAL CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF REAL PROPERTY CLASSIFIED AS CAPITAL ASSETS (TAXABLE AND EXEMPT) Tax Form BIR Form 1706 Final Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Assets Taxable and Exempt) Documentary Requirements 1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange 2) Photocopy of the Transfer Certificate of Title; Original Certificate of Title; or Condominium Certificate of Title 3) Certified True Copy of the tax declaration on the lot and/or improvement during nearest time of sale 4) Certificate of No Improvement issued by the Assessors office where the property has no declared improvement, if applicable or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees 5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable 6) Duly approved Tax Debit Memo, if applicable 7) Sworn Declaration of Interest as prescribed under Revenue Regulations 13-99, if the transaction is tax-exempt 8) Documents supporting the exemption Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures. Procedures File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the property is located. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer. Tax Rates For real property - 6%.

Deadline Within 30 days after each sale, exchange, transfer or other disposition of real property.

3.

Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the
acceptance, assignment, sale or transfer of an obligation, right or property incident thereto. BIR Form 2000 (Documentary Stamp Tax Declaration Return)

TAX FORM

DOCUMENTARY REQUIREMENTS

1) Photocopy of document(s) to which the documentary stamp shall be affixed, in case of constructive affixture of Documentary Stamp Tax 2) For metering machine users, a schedule of the details of usage or consumption of documentary stamp 3) Proof of exemption under special law, if applicable 4) Duly approved Tax Debit Memo, if applicable PROCEDURES File BIR Form No. 2000 in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the seller or transferor is registered, for shares of stocks or where the property is located, for real property. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized City or Municipal Treasurer. Submit all documentary requirements and proof of payment to the Revenue District Office having jurisdiction over the place of residence of the seller. DEADLINES The Documentary Stamp Tax return (BIR Form 2000) shall be filed in triplicate (two copies for the BIR and one copy for the taxpayer) within five (5) days after the close of the month when the taxable document was made signed, issued, accepted or transferred; when reloading a metering machine becomes necessary; or upon remittance by Collection Agents of collection from sale of loose stamps. The Documentary Stamp Tax shall be paid upon filing of the return.

4.

Donors Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two
or more persons who are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.

TAX FORM BIR Form 1800 Donors Tax Return DOCUMENTARY REQUIREMENTS The following requirements must be submitted upon field or office audit of the tax case before the Tax Clearance Certificate/Certificate Authorizing Registration can be released: 1. 2. 3. 4. Deed of Donation Sworn Statement of the relationship of the donor to the donee Proof of tax credit, if applicable Certified true copy(ies) of the Original/Transfer/Condominium Certificate of Title (front and back ) of lot and/or improvement donated, if applicable 5. Certified true copy(ies) of the latest Tax Declaration (front and back pages) of lot and/or improvement, if applicable 6. Certificate of No Improvement issued by the Assessors office where the properties have no declared improvement, if applicable 7. Proof of valuation of shares of stocks at the time of donation, if applicable o For listed stocks - newspaper clippings or certification issued by the Stock Exchange as to the par value per share o For unlisted stocks - latest audited Financial Statements of the issuing corporation with computation of the book value per share 3

8. Proof of valuation of other types of personal properties, if applicable 9. Proof of claimed deductions, if applicable 10. Copy of Tax Debit Memo used as payment, if applicable Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures. DEADLINES Within thirty days (30) after the date the gift (donation) is made. A separate return will be filed for each gift (donation) made on the different dates during the year reflecting therein any previous net gifts made during the same calendar year If the gift (donation) involves conjugal/community/property, each spouse will file separate returns corresponding to his/ her respective share in the conjugal/community property. This rule will also apply in the case of co-ownership over the property

5.

Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and
beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary.

TAX FORM

BIR Form 1801 - Estate Tax Return

DOCUMENTARY REQUIREMENTS 1) Notice of Death duly received by the BIR, if gross estate exceeds P 20,000 for deaths occurring on or after Jan. 1, 1998; or if the gross estate exceeds P 3000 for deaths occurring prior to January 1, 1998 2) Certified true copy of the Death Certificate 3) Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially 4) Court Orders/Decision, if the estate is settled judicially; 5) Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate 6) A certified true copy of the schedule of partition of the estate and the order of the court approving the same, if applicable 7) Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of real property(ies) (front and back pages), if applicable 8) Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable 9) "Certificate of No Improvement" issued by the Assessor's Office declared properties have no declared improvement or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees 10)Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if applicable 11)Photo copy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if applicable 4

12)Photo copy of certificate of stocks, if applicable 13)Proof of valuation of shares of stocks at the time of death, if applicable - For listed stocks - newspaper clippings or certification from the Stock Exchange - For unlisted stocks - latest audited Financial Statement of issuing corporation with computation of book value per share 14)Proof of valuation of other types of personal property, if applicable 15)Proof of claimed tax credit, if applicable 16)CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds two million pesos, if applicable 17)Certification of Barangay Captain for claimed Family Home 18)Duly notarized Promissory Note for "Claims against the Estate" arising from Contract of Loan 19)Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent 20)Proof of the claimed "Property Previously Taxed" 21)Proof of claimed "Transfer for Public Use" 22)Copy of Tax Debit Memo used as payment, if applicable Additional requirements may be requested for presentation during audit of the tax case depending upon existing audit procedures PROCEDURES The Estate Tax Return (BIR Form 1801) shall be filed and payment be made with an Authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of residence of the decedent at the time of his/her death. If there is no AAB within the residence of the decedent, the Estate Tax Return must be filed and the payment made with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO having jurisdiction over the place of residence of the decedent. If the required filer has no legal residence in the Philippines, the Estate Tax return shall be filed and paid with: (a) The Office of the Revenue District Officer, Revenue District Office No. 39, South Quezon City; or (b) The Philippine Embassy or Consulate in the country where decedent is residing at the time of his/her death. DEADLINES File the return within six (6) months from decedent's death. However, the Commissioner may, in meritorious cases, grant extension not exceeding thirty (30) days. The Estate Tax imposed shall be paid at the time the return is filed by the executor or administrator or the heirs. However, when the Commissioner finds that payment on the due date of the Estate Tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part 5

thereof not to exceed five (5) years, in case the estate is settled through the courts or two (2) years in case the estate is settled extra-judicially. Extension of Time of Filing: When the Commissioner finds that the payment of the estate tax or of any part thereof would imposed undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case it settled extra-judicially. Where the request for extension is by reason of negligence, intentional disregard of rules and regulations, or fraud on the part of the taxpayer, no extension will be granted by the Commissioner. If an extension is granted, the Commissioner or his duly authorized representative may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond in such amount, not exceeding double the amount, not exceeding double the amount of tax and with such sureties as the Commissioner deems necessary, conditioned upon the payment of the said tax in accordance in the terms of extension. The request for extension shall be filed with the Revenue District Officer (RDO) where the estate is required to secure its TIN and file the estate tax return. The application shall be approved by the Commissioner or his duly authorized representative.

6.

Income Tax is a tax on all yearly profits arising from property, profession, trades or offices or as a tax on a
person's income, emoluments, profits and the like.

WHO ARE REQUIRED TO FILE INCOME TAX RETURNS Individuals Resident citizens receiving income from sources within or outside the Philippines - individuals deriving compensation income from 2 or more employers, concurrently or successively at anytime during the taxable year - employees deriving 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 - employees whose monthly gross compensation income does not exceed P5,000 or the statutory minimum wage, whichever is higher, and opted for non-withholding of tax on said income - 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 Citizens working abroad receiving income from sources within the Philippines Aliens, whether resident or not, receiving income from sources within the Philippines Corporations no matter how created or organized including general professional partnerships domestic corporations receiving income from sources within and outside the Philippines foreign corporations receiving income from sources within the Philippines 6

Estates and trusts engaged in trade or business Procedures 1. Fill-up BIR Form 1700 in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1700, 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 required to register and present the duly accomplished BIR Form 1700, together with the required attachments and your payment. 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 Refundable Returns and for those returns with second installment: Proceed to the Revenue District Office where you are required to register or to any established Tax Filing Centers established by the BIR and present the duly accomplished BIR Form 1700, together with the required attachments. 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 income for the preceding taxable year

7.

Value-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale of goods and services
and on the imports of goods into the Philippines. It is an indirect tax, which can be passed on to the buyer.

WHO ARE REQUIRED TO FILE VAT RETURNS Every person or entity who in the course of his trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Five Hundred Fifty Thousand Pesos (P 550,000.00) for any twelve month period A person required to register as VAT taxpayer but failed to register A person who imports goods Professional practitioners Professional Practitioners (PPs) are formerly classified as non-VAT taxpayers and were exempt from the Value-Added Tax and Percentage taxes under Section 109 of the National Internal Revenue Code (hereinafter referred to as the Code), until December 31, 2002. Prior to this date, they were subject only to Income Tax under Section 24 of the Code. Effective January 1, 2003, however, by virtue of Republic Act Nos. 7716 and 9010, which were implemented by Revenue Regulation Nos. 1-2003 and 3-2003, services of PPs are also subject to either VAT (if gross professional fees exceed P 550,000.00 for a 12-month period) or 3% Percentage Tax (if gross professional fees totals P 550,000 and below for a 12month period), depending on their gross professional fee for a twelve (12) - month period. "Professional Practitioners" include the following: Certified Public Accountants Lawyers Doctors Insurance Agents (Life & Non-life) Other Professional Practitioners required to pass the government examination Others Monthly VAT Declarations 7

Tax Form

BIR Form 2550 M - Monthly VAT Declarations

Documentary Requirements 1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable 2. Duly approved Tax Debit Memo, if applicable 3. Duly approved Tax Compliance Certificate, if applicable 4. Previously filed return and proof of payment, for amended return Procedures 1. Fill-up BIR Form 2550 M in triplicate copies. 2. If there is payment: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. 3. If there is no payment: Proceed to the Revenue District Office where you are required to register and present the duly accomplished BIR Form 2550 M, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative Deadline Manual Filing

Not later than the 20th day following the end of each month

8.

Withholding Tax on Compensation is the tax withheld from income payments to individuals receiving purely
compensation income arising from an employer-employee relationship.

- Expanded Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable quarter year. - Final Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is not creditable against the income tax due of the payee for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the said income. - Withholding Tax on Government Money Payments (GMP) is a tax withheld by government bureaus, offices and instrumentalities, including government-owned or-controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations. -Withholding Tax on GMP Percentage Taxes - is the tax withheld by government bureaus, offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations from non-VAT taxpayers -Withholding Tax on GMP VAT Taxes - is the tax withheld by government bureaus, offices and instrumentalities, including government-owned or -controlled corporations and local government units, before making any payments to private individuals, corporations, partnerships and/or associations who are VAT registered. Monthly Remittance Of Value-Added Taxes And Other Percentage Taxes Withheld Tax Form BIR Form1600 - Monthly Remittance Return of Value-Added Taxes and Other Percentage Taxes Withheld 8

Who Are Required To File - All government offices, bureaus, agencies or instrumentalities, local government units, government owned and controlled corporation on money payments made to private individual, corporations, partnerships, association and other judicial/artificial entities under RA Nos. 1051, 7649, 8241 and 8424 -Payors to non-residents receiving income subject to Value-Added Tax Documentary Requirements 1. Alphabetical list of payees indicating the following: Month TIN of withholding agent Name of Withholding Agent TIN of Payee ATC Nature of Payment Name of Payee Amount of Payment Tax Rate Tax Required to be Withheld 2. Return previously filed and proof of tax payments, if amended return Procedures 1. Fill-up BIR Form 1600 in triplicate copies. 2. If there is tax required to be remitted: Proceed to the nearest Authorized Agents Banks (AAB's) of the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600, together with the required attachments and your payment. In places where there are no AAB's, proceed to the Revenue Collection Officer or duly Authorized City or Municipal Treasurer located within the Revenue District Office where you are required to register and present the duly accomplished BIR Form 1600, together with the required attachments and your payment. Receive your copy of the duly stamped and validated form from the teller of the AAB's /Revenue Collection Officer/duly authorized City or Municipal Treasurer. 3. If there is no tax required to be remitted: Proceed to the Revenue District Office where you are registered and present the duly accomplished BIR Form 1600, together with the required attachments. Receive your copy of the duly stamped and validated form from the RDO representative.

Deadline On or before the tenth (10th) day of the month following the month the withholding was made

9.

Excise Tax is a tax imposed on goods manufactured or produced in the Philippines for domestic sale or
consumption or any other disposition. It is also imposed on things that are imported.

Codal Reference Alcohol Products - Secs. 141 to 143 Tobacco Products - Secs. 144 to 147 Petroleum Products - Sec. 148 Mineral Products - Sec. 151 Miscellaneous Articles - Secs. 149 - 150 9

Frequently Asked Questions

What are the kinds of Excise Taxes? Specific Tax - Excise taxes imposed on goods or articles based on weight or volume capacity or any other physical unit of measurements. Ex. Greases - per kilogram Leaded premium gasoline - per liter Ad Valorem Tax - Excise taxes imposed on goods or articles based on selling price or other specified value of the goods. Ex. Fermented Liquor - net retail price Automobiles - manufacturer's or importer's selling price

What goods/articles are subject to Excise Tax? Alcohol Products Distilled Spirits (produced from sap of nipa, coconut, cassava, camote, buri palm or sugarcane and other raw materials) Wines (sparkling wine, champagne, still wines, fortified wines) Fermented Liquors ( beer, lager beer, ale, porter, and other fermented liquors except tuba, basi, tapuy and similar fermented liquors) Automobiles ( whether engine or gasoline fed , 1600 cc up to over 3001 cc engine displacement) Non Essential Products Jewelry, pearls, precious and semi-precious, whether real or immitation Perfumes and toilet waters Yachts and other vessels for pleasure or sports Mineral products Non-metallic minerals or quarry resources Gold and Chromite Copper Indigenous Petroleum Natural Gas or Liquefied Natural Gas (locally extracted) Coal and Coke Petroleum Products Lubricating Oils Greases Processed Gas Waxes and Petrolatum Denatured alcohol used for motive power Unleaded Premium Gasoline Leaded Premium Gasoline Regular Gasoline Naptha 10

 Aviation Gasoline Aviation Turbo Jet Fuel Kerosene Diesel Fuel Oil Liquefied Petroleum Gas (LPG) Asphalt Bunker Fuel Oil and similar fuel Base stocks for lube, oils and greases, HVD, aromatic, extracts Tobacco Products Smoking tobacco and other partially manufactured tobacco except cigar and cigarette Chewing tobacco Cigars Cigarettes, whether packed by hand or by machine Tobacco Inspection Fees

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