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Section 6 The Commissioner has the In exercising this authority, the following shall be
Power of the authority to determine fair observed:
Commissioner to market value of real 1. Mandatory consultation with both private and
make properties. public competent appraisers before division of
assessments and the Philippines into zones.
prescribe 2. Prior notice to affected taxpayers before the
additional determination of fair market values of the real
requirements for properties.
tax administration 3. Publication or posting of adjustments in zonal
and enforcement value in a newspaper of general circulation in
the province, city or municipality concerned.
4. The basis of valuation and records of
consultation shall be public records open to the
inquiry of any taxpayer.
5. Zonal valuations shall be automatically
adjusted once every three years.
TRAIN Briefing – Power & Authority of the CIR
VER 1.0 – January 2018
Briefing on RA 10963: Tax
Reform for Acceleration and
Inclusion (TRAIN) – Income Tax
NIRC Provision NIRC TRAIN
Section 24 Taxable income of individuals are subject to the Revised personal income tax
Income tax rates following graduated rates: brackets of 2018-2022:
on individual Tax Schedule effective January 1,
citizen and Tax Schedule
2018 to December 31, 2022
individual resident Not over 5%
alien of the Not over 0%
Philippines
P10,000 P250,000
Over P10,000 P500 + 10% of
but not over the excess over
P30,000 P10,000
Over P30,000 P2,500 + 15% of
but not over the excess over
P70,000 P30,000
Section 24 (B) (1) Interest income received by an The rate of final tax on interest
Final tax on individual taxpayer (except a income received by resident individual
interest on foreign non-resident individual) from a taxpayer under the expanded foreign
currency deposit depository bank under the currency deposit system increased
expanded foreign currency from 7.5% to 15% final tax
deposit (EFCD) system is
subject to 7.5% final tax
Section 24 (C) The capital gains tax on net The final tax rate for net capital gains
Capital gains tax capital gains realized from sale, tax on the sale, barter, exchange or
on sale of shares barter, or exchange or other other disposition of shares of stock in a
not traded disposition of shares of stock in a domestic corporation no traded through
through the stock domestic corporation not traded the stock exchange is increased from
exchange through the stock exchange is: 5/10% CGT to a flat rate of 15% CGT
Section 31 Means the pertinent items of gross The phrase “and/or personal and
Definition of income specified in this Code, less additional exemptions” is removed in
Taxable Income the deductions and/or personal the definition.
and additional exemptions, if any,
authorized for such types of
income by this Code or other
special laws
Section 35 Individual taxpayers are entitled to: The Basic Personal and Additional
Personal Basic Personal Exemption – Exemptions of individual taxpayers
Exemptions P50,000 are removed.
and
The related provision on furnishing
Additional Exemption – P25,000 exemption certificate is likewise
per qualified dependent child removed.
Section 32 (B) The amount of tax-exempt 13th The amount of tax-exempt 13th month
Tax exempt 13th month pay and other benefits is pay and other benefits is increased to
month pay P82,000. P90,000.
Section 33 (A) Fringe benefits given to non- The Fringe Benefits Tax is
Tax on fringe rank and file employees are increased to 35% effective January
benefits given to subject to 32% final tax 1, 2018
non-rank and file The grossed up monetary value The grossed up monetary value of
employees of the fringe benefit given to the fringe benefit given to non-rank
non-rank and file employees and file employees shall be
shall be determined by dividing determined by dividing the actual
the actual monetary value by monetary value by 65%
68%
Section 34 (M) The allowable deduction for Allowable deduction for premium
Allowable premium payments on health payments on health and/or
deduction for and/or hospitalization insurance hospitalization insurance of an
premium of an individual taxpayer is P2400 individual taxpayer is removed.
payments on per year or P200 per month,
health and/or subject to a gross family income
hospitalization threshold of P250,000.
insurance
Section 51 An individual whose gross Individual taxpayers whose taxable
Filing of individual income does not exceed his total income is subject to zero percent
income tax return personal and additional under the new graduated tax table
exemptions for dependents are (i.e., does not exceed P250,000) shall
not required to file income tax not be required to file an income tax
return (ITR). return.
Additional provision:
The ITR shall consist of a maximum
of four (4) pages in paper OR
electronic form. It shall only contain
the following information:
Personal profile and information
Gross sales receipts or income
from compensation, from business,
or from exercise of profession
(except income subject to final tax)
Allowable deductions
Taxable income
Income tax due and payable
Section 109 upon the production of for their own use and not for barter or sale,
VAT-exempt evidence satisfactory to the accompanying such persons, or arriving
transactions Commissioner, that such within a reasonable time: Provided, That
persons are actually coming to the Bureau of Customs may, upon the
settle in the Philippines and production of satisfactory evidence that
that the change of residence is such persons are actually coming to settle
bona fide. in the Philippines and that the goods are
brought from their former place of abode,
exempt such goods from payment of duties
and taxes:
Section 109 (W) Sale or lease of goods (Z) Sale of gold to the BSP.
VAT-exempt or properties or the
Transactions performance of services (AA) Sale of drugs and medicines prescribed
other than the transactions for diabetes, high cholesterol, and
specifically mentioned as hypertension beginning January 1, 2019.
VAT-exempt, the gross
annual sales and/or Now (BB) Sale or lease of goods or
receipts do not exceed the properties or the performance of services
amount of P1,919,500.00 other than the transactions mentioned in the
(as amended). preceding paragraphs, the gross annual
sales and/or receipts do not exceed the
amount of P3,000,000.
Section 110 The input tax on the Amortization of input VAT shall only
(A)(2)(b) purchase of capital allowed until December 31, 2021.
Amortization of goods with a cost
Input VAT from exceeding After such date, taxpayers with
Purchases of P1,000,000.00 shall be unutilized input VAT on capital goods
Capital Goods amortized based on its purchased or imported shall be
useful life or 60 months, allowed to apply the same as
whichever is shorter. scheduled until fully utilized.
Section 112 The Commissioner shall The period of granting by the Commissioner
Refunds or Tax grant a refund or issue a of refunds is decreased to 90 days (from 120
Credit of Input VAT tax credit certificate for days) from the date of submission of
creditable input taxes complete documents in support of the
within 120 days from the application.
date of submission of
complete documents. The granting of tax credit instead of refund is
removed.
Additional provision:
Should the Commissioner find that the grant of
refund is not proper, the Commissioner must
sate in writing the legal and factual basis for
denial.
Section 112 Failure on the part of the The deemed denial of failure to act on the
Refunds or Tax Commissioner to act on application is removed.
Credit of Input VAT the application within the
period prescribed shall Additional provision:
be deemed a denial of
the application. Failure on the part of any official, agent, or
employee of the BIR to act on the application
within the ninety (90) – day period shall be
punishable under Section 269 of the Tax Code
(administrative fine and imprisonment).
Section 114 (A) VAT taxpayers shall file Beginning January 1, 2023, the filing and
Return and Payment quarterly return within 25 payment shall be done within 25 days
of VAT days following the close of following the close of each taxable quarter.
each taxable quarter,
while payment of the VAT
shall be made on a
monthly basis upon filing
of monthly VAT
declaration.
Section 90 Estate tax returns shall be filed The filing of estate tax returns shall
Time of filing of within six (6) months from the be within one (1) year from the
estate tax return decedent’s death. decedent’s death.
On coal and coke, per metric ton P 10.00 P 50.00 P 100.00 P 150.00
RR 25-2003 TRAIN
P 12,000 + 20%
Over P600,000 up to P0 up to P600,000 4%
P 1,100,000
in excess of
P 600,000
Over P600,000
P112,000+ 40% 10%
Over P 1,100,000
in excess of up to P1,000,000
Up to P2,100,000
P1,100,000 Over P1,000,000
20%
P512,000 + 60% up to P4,000,000
Over P2,100,000 in excess of
P2,100,000 Over P4,000,000 50%
Types of Sweeteners
Caloric Sweetener - refers to a substance that is
sweet and includes sucrose, fructose, and glucose
Sweetened that produces a certain sweetness.
Beverages
High Fructose Corn Syrup – refers to a sweet
saccharide mixture containing fructose and glucose
which is derived from corn and added to provide
sweetness to beverages, and which includes other
similar fructose syrup preparations.
Manufacturer
Persons Owner or Possessor of untaxed
Liable
products
Importer
VIOLATION PENALTIES
Misdeclaration or summary cancellation
misrepresentation of or withdrawal of his
Penalties
sworn statement permit
any of the acts or treble the aggregate
omissions in violation amount of deficiency
of the Act and taxes, surcharges and
implemented by these interest
Regulations
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
127 VIOLATION PENALTIES
any of the acts or omission criminal liability and
prohibited under the Act penalty under
Section 254 of the
NIRC
Penalties
willfully aids or abets in the criminal liability as
commission of any such the principal;
act or omission
If the offender is not a Deported
citizen of the Philippines immediately after
serving the sentence
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
128
1. Registration (Sec. 154; RMO 38-2003)
Permit to Operate as Manufacturer/ Permit to
Operate as Toll-Manufacture/ Permit to
Admnistrative Operate as Importer
Requirements for
Permit to Register Brands and Variants (Sec.
Excise Taxpayers
143 & Sec. 245)
2. Issuance of Assessment Number (RMO 38-2003)
3. Posting of Bonds (Sec. 160)
4. Issuance of ATRIGs (RMO 35-2002; RMO 14-2014)
5. Issuance of Export Permit (RMO 38-2003; Sec. 159)
TRAIN Briefing – Sweetened Beverages
VER 1.0 – January 2018
129
6. Transfer or Sale or Disposition of Raw
Materials and/or Semi-processed goods
7. Maintenance of Official Register Book
Admnistrative
(ORB) (Sec. 153)
Requirements for 8. Assignment of Revenue Officer On Premise
Excise Taxpayers (ROOPs) (Sec. 16; RMO 18-86/LTS Memo 3-2005)
9. Regular Stocktaking of Inventories (Sec. 6C)
10. Use of BIR Form on All Removals of SB
(BIR Form No. 2299 - Excise Taxpayer’s
Removal Declaration)
1. Liposuction
Definition of 2. Mammoplasty
Terms 3. Breastlift
4. Buccal Fat Reduction
5. Buttocks Augmentation
Invoicing Requirements
Invoicing Requirements
The total amount which the patient/client pays or is
obligated to pay to the service provider including the
excise tax and value added tax: Provided, that:
Administrative The amount of excise tax shall be shown as a
Requirements separate item in the OR;
Discounts given shall be indicated in the OR,
otherwise the same shall not be allowed as
deduction from gross receipts;
If the procedure performed is non-invasive
and considered exempt from excise tax, the
term Exempt from Excise Tax shall be shown
on the OR;
TRAIN Briefing – Cosmetic Procedure
VER 1.0 – January 2018
159
Invoicing Requirements
If the services performed involved both invasive
(excisable) and non-invasive (exempt from excise
tax) procedures, the receipt shall clearly indicate
Administrative the breakdown of the amount received between its
Requirements taxable and exempt components and the
calculation of excise tax on each portion of the
procedure performed shall be shown on the receipt:
Provided, that the service provider may issue
separate ORs for the excisable and exempt
components of the services rendered.
Accounting Entries
CASH 52,232.15
Administrative
Requirements FWT-EXCISE TAX 2,232.15
OUTPUT TAX 5,357.15
SERVICE INCOME 44, 642.85
Accounting Requirements
Not withstanding the provisions of Section
233, all persons subject to excise tax under
Section 150-A of the Tax Code shall, in
Administrative
Requirements addition to the regular accounting records
required, maintain a subsidiary ledger on
which every service rendered/performed on
any given day is recorded. The subsidiary
ledger shall contain the following information:
Exceptions
COSMETIC
OFFICIAL RECEIPT PROCEDURES AMOUNT COLLECTED
Gross Receipts
(Net of VAT 5% Excise Tax
No. Date PERFORMED /Excise) Withheld 12% VAT Total
3. Mayor’s Permit
4. BIR Certificate of Registration (with latest
Administrative registration fee BIR Form 0605)
Requirements 5. Latest Copy of Income Tax Return
6. Location Map of Clinics/Hospitals where the
medical professionals/practitioners perform
the services
7. Price list of Invasive/Non-invasive Medical
Procedures
General interest 20% interest on any unpaid amount General interest on unpaid amount of
of tax from the date prescribed for tax is changed to 12% (at double the
payment until the amount fully paid rate of legal interest rate for loans or
forbearance of any money in the
absence of an express stipulation as
set by the BSP; prevailing BSP-set
legal interest is 6%)
Additional proviso:
Deficiency and delinquency interest
shall in no case be imposed
simultaneously.
Deficiency Deficiency interest is assessed and The period when deficiency interest
interest collected from the date prescribed shall stop to run is until full payment
for its payment until full payment OR upon issuance of a notice and
thereof. demand by the BIR Commissioner;
whichever comes earlier.