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.

Domestic carriers and keepers of garages Gross receipts 3%

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.

Non-VAT registered persons under Section 109 (BB) Gross sales or receipts 3%

Sample computation of Percentage Tax Due and Payable

Let’s say you’re running a consultancy business, earning less than 3M annually, and receive a quarterly income of P180,000. In that
case, if you’ve opted for the quarterly percentage tax option (as reflected in your COR), then the calculation would be something like
this:

Quarterly Percentage Tax Due = Gross Receipts x 3%

=P180,000 x 3%
=P5,400

Hence, P5,400 would be your total quarterly percentage tax payable.

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:
a. 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
b. International air/shipping carriers doing business in the Philippines on their gross receipts derived from transport of
cargo from the Philippines to another country
c. Franchise grantees of –
i. 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
ii. gas and water utilities.
d. 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:

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

ii. Diplomatic services;
iii. 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
iv. 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.
v.
 International air/shipping carriers doing business in the Gross receipts on transport of cargo from 3%
Philippines the Philippines to a foreign country
Franchise grantees: Gross receipts 2%
Gas and water utilities
Radio and television broadcasting companies whose Gross receipts 3%
annual gross receipts of the preceding year do not
exceed Php10,000,000 and did not opt to register as
VAT taxpayer

Overseas dispatch, message or conversation originating Amount paid for the service 10%
from the Philippines
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)

Banks and non-bank financial intermediaries performing
quasi-banking functions
Other non-bank financial intermediaries
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 0%
income of subsidiaries
Royalties, rentals of property, real or 7%
personal, profits from exchange and all
other items treated as gross income under
Sec. 32 of the Tax Code, as amended
Net trading gains within the taxable year of 7%
foreign currency, debt securities,
derivatives and other similar financial
instruments
Interest, commissions, discounts and all 5%
other items treated as gross income under
the Tax Code, as amended
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%

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

Life Insurance Company/Agent/Corporation (except Total premiums collected 2%

purely cooperative companies or associations)

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

Agents of foreign insurance companies (except reinsurance premium):

Insurance agents authorized under the Insurance Code Total premiums collected 4%
to procure policies of insurance for companies not
authorized to transact business in the Philippines
Owners of property obtaining insurance directly with Total premiums paid 5%
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
 Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%
Cabarets, Night or Day Clubs, videoke bars, karaoke Gross receipts 18%
bars, karaoke televisions, karaoke boxes and music
lounges
Boxing exhibitions (except when the World or Oriental Gross receipts 10%
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)
Professional basketball games (in lieu of all other Gross receipts 15%
percentage taxes of whatever nature and description)
Jai-alai and race track Gross receipts 30%

10. Winnings or 'dividends' in horse races

Winnings on horse races · Winnings or 'dividends' 10%

· Winnings from double 4%
forecast/quinella and trifecta bets
· Prizes of owners of winning race 10%
horses

11. 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

Where to pay?

 Authorized Agent Bank within the territorial jurisdiction of RDO where the taxpayer registered the aforementioned
documents
 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).
 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).

When to File/Pay

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