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SCOPE of OPT TRANSACTIONS

TAX BASIS

REQUIRED
TAX
FILLING
When
RATES
What?
?

BELOW VAT THRESHOLD; paragraph A to U of Section 109 (1) of NIRC


Sale, 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 P 1,919,500 and who are not VAT-registered;

Gross Sales or
Receipts

Sales to Govt of Non-VAT Business:


-subject to:
1) Withholding percentage tax
2) Creditable withholding income taxes (CWIT) of goods/services

Monthly

20 days
following
the end of
the
taxable
month

Monthly

20 days
following
the end of
the
taxable
month

3%

3%
1%/ 2%

VAT THRESHOLD EXCEPTION


Non-VAT TV/ Radio franchise grantees whose annual gross receipts do not
exceed 10, 000, 000
(has the option to register under the VAT system, said option is irrevocable; Sec.
119 NIRC, RA 9337)

Gross receipts

3%

SPECIFIC OPT (subject to OPT even if the annual gross receipts of the business exceed VAT
Threshold)
Domestic carriers and keepers of garages, Sec. 117 of NIRC RA. 9337, includes:
1) Cars for rent or for hire driven by the lessee
2) Transportation contractors, including those paid to transport passengers
3) Other domestic carriers by land for the transport of passengers (except
owners of bancas and of animal-drawn two-wheeled vehicles
4) Keepers of garages
International Air and Shipping Carriers
1) Foreign corporation permitted to do business in the Philippines (Philippine
origin only) transport of:
a) PASSENGERS
b) CARGOES; Sec 113 of NIRC RA. 10378
2) Domestic corporation engaged in the transport of passengers and/or
cargoes by:
a) DOMESTIC TRANSPORT
b) FOREIGN TRNSPORT

Franchises; Sec 119 of NIRC

Gross receipts
Or Minimum
quarterly or
monthly Gross
receipts (Sec. 117
of NIRC RA. 8424)
Whichever is
HIGHER

3%

Gross Philippine
Billing
(revenue from
passage of persons,
excess baggage,
cargo and or mail
originating from the
Philippines)

VATexempt
3% OPT

Monthly

20 days
following
the end of
the
taxable
month

Monthly

20 days

12%VAT
0% VAT

PERCENTAGE TAX
-also called NON-VAT
-treatment:
1) Buyer/ one who shoulders the tax- imputed part of COST OF GOODS purchased/ operating expense (Input VAT- non-creditable)
2) Seller/ actual payer or remitter- not allowed to collect VAT but he can add or impute the amount of OPT on the selling price
-characteristics:
1)
2)
3)
4)
5)

BUSINESS TAX- imposed on business transactions


Follows the CONSUMPTION/ DESTINATION PRINCIPLE (Note! The place of sale is presumed to be the place of consumption.)
INDIRECT TAX- passed on to the buyer as an imputed percentage tax on the sales price
PRIVELEGE TAX- imposed on the right to sell or purchase, exchange or barter goods or services
AD VALOREM TAX- basis of determining the amount of tax is the value or the sales price of the goods/ services