Description

Percentage tax is a business tax imposed on persons or entities/transactions:

a.
1.

Who sell or lease goods, properties or services in the course of trade or business and are exempt
from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code, as
amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who are not
VAT-registered; and

2.

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 of passengers by land (except 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

radio and/or television broadcasting whose gross annual receipts for the
preceding year do not exceed Php 10,000,000.00 and did not opt to register as VAT
taxpayers
gas and water utilities

d.

Overseas dispatch, message or conversation transmitted from the Philippines, except those
transmitted by the Philippine government, any embassy and consular offices of a foreign
government, public international organizations enjoying exemptions pursuant to an international
agreement and news messages to a bona fide correspondent furnishing general news service

e.

Banks and non-bank financial intermediaries performing quasi-banking functions

f.

Other non-bank financial intermediaries (including pawnshops)

g.

Person, company or corporation (except purely cooperative companies or associations) doing life
insurance business

h.

Fire, marine or miscellaneous agents of foreign insurance companies

i.

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

j.

Winnings in horse races

k.

Sale, barter or exchange of shares of stock listed and traded through the local stock exchange or
through initial public offering

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Who are required to file Percentage Tax Returns monthly?

Every person/entity subject to percentage tax as enumerated in items 1, 2.a, 2.b, 2.c, 2.e, 2.f, 2.g and 2.h
above
Who are required to file Percentage Tax Returns quarterly?

1.
1.

Operator, manager or person in charge of:

cockpits,

cabarets, day or night clubs, videoke bars, karaoke bars, karaoke

televisions, karaoke boxes and music lounges

boxing exhibitions

professional basketball games

Jai-alai and race tracks

2.

Telephone and communication companies on their overseas dispatch, message or conversation

originating and transmitted from the Philippines

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Monthly Percentage Tax

Tax Form
BIR Form 2551M - Monthly Percentage Tax Return
Documentary Requirements
1. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form
2307), if applicable
2. Duly approved Tax Debit Memo, if applicable
3.

For amended return, proof of payment and the return previously filed

4.

Authorization letter, if filed by an authorized representative

Procedures
1. Fill-up BIR Form 2551M in triplicate copies
2.

If there is payment:

Proceed to any Authorized Agent Bank (AAB) located within the territorial
jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered and present
the duly accomplished BIR Form 2551M, together with the required attachments and payment.
The Percentage Tax shall be paid at the time the return is filed by the taxpayer.

In places where there are no AABs, the duly accomplished BIR Form 2551M, together
with the required attachments and payment, shall be filed/paid with the Revenue Collection
Officer (RCO) or duly authorized Treasurer of the city or municipality where said business or
principal place of business is located.

Receive the taxpayer's copy of BIR Form 2551M duly validated/stamp-received by the
AAB/RCO/authorized City or Municipal Treasurer.

For eFPS filers, you may click eFPS site for the Job Aid in filing and payment thru said system.

3.

If there is no payment:

Proceed to the RDO where the taxpayer is registered or with the concerned RCO and present the
duly accomplished BIR Form 2551M, together with the required attachments.
Receive the taxpayer's copy of BIR Form 2551M duly stamp-received by the RDO representative.

Note: "No payment" returns filed late shall be imposed the necessary penalties by the RDO, which shall be paid
at the concerned AAB.

When to File/Pay

Manual Filing

Within twenty (20) days following the end of each month

Electronic Filing

For taxpayers enrolled with the Electronic Filing and Payment System (eFPS), in accordance with the schedule set
forth in RR No. 26-2002 as follows:

Group A : Twenty five (25) days following the end of the month

Group B : Twenty four (24) days following the end of the month
Group C : Twenty three (23) days following the end of the month
Group D : Twenty two (22) days following end the of the month
Group E : Twenty one (21) days following the end of the month

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Quarterly Percentage Tax

Tax Form
BIR Form 2551Q - Quarterly Percentage Tax Return
Documentary Requirements
1. Duly issued Certificate of Creditable Tax Withheld at Source ( BIR
applicable
2. Duly approved Tax Debit Memo, if applicable
3. For amended return, proof of payment and the return previously filed
4. Authorization letter, if filed by an authorized representative

Form 2307),

Procedures
1. Fill-up BIR Form 2551Q in triplicate copies.
2. If there is payment:

Proceed to any AAB located within the territorial jurisdiction of the RDO where the
taxpayer is registered and present the duly accomplished BIR Form 2551Q, together with the
required attachments and payment. The Percentage Tax shall be paid at the time the return is
filed by the taxpayer.

In places where there are no AABs, the duly accomplished BIR Form 2551Q, together
with the required attachments and payment, shall be filed/paid with the RCO or duly Authorized
Treasurer of the city or municipality where said business or principal place of business is
located.

Receive the taxpayer's copy of BIR Form 2551Q duly validated/stamp-received by the
AAB/RCO/authorized City or Municipal Treasurer.

if

For eFPS filers, you may click eFPS site for the Job Aid in filing and payment thru said system

3. If there is no payment:

Proceed to the Revenue District Office where the taxpayer is

registered or with the concerned RCO and present the duly
accomplished BIR Form 2551Q, together with the required
attachments.

Receive the taxpayer's copy of

by the RDO representative.

BIR Form 2551Q

duly stamp-received

Note: "No payment" returns filed late shall be imposed the necessary penalties by
the RDO, which shall be paid at the concerned AAB.

When to File/Pay

Manual Filing

Within twenty (20) days after the end of each taxable quarter

Electronic Filing

Within twenty (20) days after the end of each taxable quarter

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Percentage Tax Return For Transactions Involving Shares of Stocks Listed and
Traded Through the Local Stocks Exchange or Through Initial and/or Secondary
Offering
Tax Form

BIR Form 2552 - Percentage Tax Return for Transactions Involving Shares of Stocks
Listed and Traded Through the Local Stocks Exchange or Through Initial and/or
Secondary Public Offering
Documentary Requirements
1. Duly issued Certificate of Creditable Tax Withheld at Source ( BIR
applicable

Form 2307),

if

2. Proof of Exemption for transactions not subject to tax, if applicable

3. Duly approved Tax Debit Memo, if applicable
4. For amended return, proof of payment and the return previously filed
5. Authorization letter, if filed by an authorized representative
Procedures
1. Fill-up BIR Form 2552 in triplicate copies.
2. If there is payment:

Proceed to any AAB located within the territorial jurisdiction

of the RDO where the local stock exchange is located and
present the duly accomplished BIR Form 2552, together with
the required attachments and payment. The Percentage Tax
imposed shall be paid at the time the return is filed by the
taxpayer.

Receive the BIR Form 2552 taxpayer's copy duly validated

and stamp-received by the teller of the AAB

Electronic Filing
For eFPS filers, you may go to eFPS site for the Job Aid in filing and payment thru said
system.
3. If there is no payment:

Proceed to the RDO having jurisdiction over the local stock

exchange and present the duly accomplished BIR Form 2552,
together with the required attachments.

Receive the BIR Form 2552 taxpayer's copy duly stamp

received by the RDO representative.

Note: "No payment" returns filed late shall be imposed the necessary penalties by the
RDO, which shall be paid at the concerned AAB.
When to File/Pay

For tax on sale of shares of stocks listed and traded through the
local stock exchange (LSE) within five (5) banking days from
the date of collection

For tax on shares of stocks sold or exchanged through primary

offering - within 30 days from the date of listing in the LSE

For tax on shares of stocks sold or exchanged through secondary

public offering - within five (5) banking days from the date of
collection
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Tax Rates
Coverage

Basis

Tax Rate

Persons exempt from VAT under Sec. 116

Gross Sales or Receipts

3%

Domestic carriers and keepers of garages

Gross Receipts

3%

International air/shipping carriers doing business in the Gross Receipts

Philippines

3%

International Carriers:

Franchise Grantees:
Electric , gas and water utilities

Gross Receipts

2%

Radio and television broadcasting companies whose

annual gross receipts of the preceding year do not
exceed P 10,000,000 and did not opt to register asVAT
taxpayer

Gross Receipts

Banks and non-bank financing intermediaries

Interest, commissions and discounts from

lending activities as well as income from leasing
on the basis of remaining maturities of
instruments:

3%

Short term maturity (not over 2 years)

5%

Medium term maturity (over 2 years but not

over 4 years)

3%

Long term maturity

1%
Over 4 years but not over 7 years
0%
Over 7 years

Finance Companies

On Dividends

0%

On royalties, rentals of properties, real or

personal, profits from exchange and all other
items treated as gross income under Sec. 32 of
the Code

5%

On interest, discounts and other items of gross

income paid to finance companies and other
financial intermediaries not performing quasi
banking functions

5%

Interest, commissions and discounts paid from

their loan transactions from finance companies
as well as income from financial leasing shall be
taxed based on the remaining maturities of
instruments:
Short term maturity (not over 2 years)

5%

Medium term (over 2 years but not over 4

years)

3%

Long Term Maturity

Life Insurance Companies (except purely cooperative

companies or associations)

Over 4 years but not over 7 years

1%

Over 7 years

0%

Total premiums collected

5%

Agents of foreign insurance companies: (except

reinsurance premium)
Total premium collected

10%

Total premium collected

5%

Cockpits

Gross receipts

18%

Cabarets, Night or Day Clubs

Gross receipts

18%

Boxing exhibitions

Gross receipts

10%

Professional basketball games

Gross receipts

15%

Jai-alai and race track (operators shall withheld tax on

winnings)

Gross receipts

30%

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

Gross selling price or gross value in money of

shares of stocks sold, bartered, exchanged or
otherwise disposed

of 1%

A corporate issuer/stock broker, whether domestic of

foreign, engaged in the sale, barter, exchange or other
disposition through Initial Public Offering
(IPO)/secondary public offering of shares of stock in
closely held corporations

Gross selling price or gross value of in money of

shares of stocks sold, bartered, exchanged or
otherwise disposed in accordance with the
proportion of stocks sold, bartered or exchanged
or after listing in the stock exchange

Proprietors, lessee or operator of the following:

Up to 25 %

4%

Over 25% but not over 33 1/3%

2%

Over 33 1/3 %

1%

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Related Revenue Issuances

RR No. 4-95, RR 7-95, RR No. 5-97, RR No. 2-98, RR No. 7-95, RR No. 6-2001, RR
No. 12-2001, RR No. 4-2002, RR No. 26-2002, RR No. 14-2003, RR No. 9-2004, RR
No. 10-2004, RMC No. 6-2003, RMC No. 73-2004
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Codal Reference
Sections 116 to 128 of the National Internal Revenue Code
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