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and importation.
Onerous - burden
Marginal income earners - individuals whose business do not realize a gross sales
or receipts exceeding
P100,000 in any twelve-month period. They are not subject to business taxes.
VAT - tax on the value added by every seller to the purchase price or cost in the
sale or lease of
goods, property or services in the ordinary course of trade or business, and on
the importation of
goods into the Philippines, whether for personal or business use.
Kinds of VAT:
1. VAT on sales of goods or properties
2. VAT on importation of goods
3. VAT on sale of services
4. VAT on use or lease of properties
Persons Liable:
1. Sale in the course of business - seller
2. Importation - importer
3. Sales of services - service provider
4. Use or lease of properties - lessor
Characteristics of VAT:
1. Indirect tax - shifting of the tax to the buyer
2. Consumption-based
3. VAT is imposed on the value added in each stage of production and distribution
process
4. Credit-invoice method VAT
Output VAT - VAT due on sale, lease or exchange of taxable goods or proerties or
services by
any person registered or required to register as VAT taxpayer.
Basis of VAT:
1. Sales of goods or properties - gross selling price/ gross sales
2. sale of services - gross receipts
3. Importation - Total landed cost
4. Dealers in securities - gross income
5. Use or lease of properties - rent income
Sale of goods and/or services to senior citizens and PWDs: not subject to VAT on
certain goods
and services
VAT Registration:
A. Mandatory registration:
1. If the gross sales or receipts exceeds P3.000,000
2. Radio and television broadcasting companies whose receipts exceed P10,000,000
3. A person required to register as VAT taxapayer but failed to register
VAT threshold of husband and wife: They are considered separate taxpayers.
B. Optional Registration:
1. VAT-exempt person or business or those not required to register may opt to
register
2. Franchise grantees of radio and television broadcasting whose gross receipts do
not exceed
P10,000,000.
Any person who elects to register under options registraton shall not allowed to
cancel his
registration for the next three years.
C. Cancellation of registration:
1. If the gross sales or receipts fell below the threshold of P3,000,000 for next
12-month period.
after the required 3-year period.
2. Cease to carry on the business
Other percentage taxes (OPT) - Tax imposed on sale, barter, exchange or importation
of goods, or sale
of services based on gross sales, value in money of receipts derived by the
manufacturer, producer,
importer or seller measured by certain percentage of the gross selling price or
receipts.
Self-employed individuals and professionals who did not avail of the 8%:
1. Percentage tax - 3%
2. Income will be subjected to the Graduated Tax Rate
Percentage tax on Franchise of gas and water utilities: 2% tax on gross receipts
Banks = persons or entities engaged in the lending of funds obtained from the
public through the
receipts of deposits or sale of bonds, securities, or obligations of any kind.
Tax on Winnings:
Winning bettor = regular bet = 10% on winning less cost of ticket
Winning bettor = double, forecast/quinella and trifecta bets = 4% on winning less
cost of ticket
Horse owner = 10% of gross winnings
Tax on winnings are withheld by the operator and remitted for the BIR.
Sale, barter, or exchange of shares of stock listed and traded in the local stock
exchange: 6/10 of 1%
of Gross selling price
Excise taxes = taxes (in addition to the VAT) applied to non-essential goods
manudfactured and produced in the Philippines for
domestic sales or concumption or for any disposition, and goods imported.