Business/in the course of trade or business Should be business all the time Regular conduct Pursuit of a commercial or economic

activity Including transactions incidental thereto The activity should be a commercial or economic activity o Purpose is profit or income o Completed a business cycle There should be regularity in the activity o Regularity  Repetition  Continuity  More than 1 isolated transaction


o o o o o o o

Tobacco Products Cigarettes Cigars Automobiles Manufactured fuel oils Mineral Products Non-essential products

*not all people are subject it only those manufacturers or importers handling the 10 things mentions above. Should be movable. Value Added Tax o Sale of goods or properties o Sale of services o Importation of goods or properties Percentage Tax o 3% on sale of goods, properties or services o Common Carrier s Tax (intrnl or domestic) o Franchise Tax o Overseas Communication Tax o Tax on banks and non-bank financial intermediaries performing quasi banking fuctions and others o Tax on insurance companies o Tax on agents of intrn l insurance companies o Amusment Tax o Tax on winnings o Stock transaction tax


*you should pay business tax even without conducting business - Importation of good whether personal or for business (VAT) - Overseas Communication even if it is private (percentage tax: Overseas communication tax) - services rendered by a foreigner in the Philippines Considered as in the course of business *Some isolated transactions are business taxable - Importation of goods for personal use - Single overseas communication - winnings in a horse race or jai-alai - Single sale of shares of stock of a domestic corporation thru a local stock exchange by one who is not a dealer in securities is subject to a percentage tax. 3 major business taxes in the NIRC Excise Tax o Specific o Ad Valorem

*those that did not exceed 1,500,000 the preceding year is exempted from VAT but subject to percentage tax of 3% (this is optional) however, can t be change in the middle of the year. * those that pay excise tax either pay Vat of percentage tax depending on their sales. * if you are already subject to another tax in the percentage tax the 3% does not apply nor does VAT. *one may be subject to percentage tax because of exemption in VAT a to v. - VAT registers at the BIR P500 for very separate and distinct establishments including facilities where business is conducted.

Imposed on: Manufacturers and Importers of:
o o o Distilled Spirits Wines Fermented Liquors

Gross receipts for the last 12 months exceed 1. corn into grits and sugar cane into sugar. equipment and spare parts for domestic or international operations Importation of fuel. seedlings. salting. importation or lease of passenger or cargo vessels and aircrafts. freezing. Services subject to percentage tax Services by agricultural contract growers and milling for other palay. magazines review or bulletin which appears at regular intervals at fixed prices for subscription and sale and not principally made for the publication of advertisements.g. including engine. Mandatory Registration those in the course of trade or business. venery cervices except those rendered by those professionals Educational services by private institution that are accredited by deped ched tesda and government educational institution Services under employer-employee relationship Services by mtinational corporations that onot derive income in the Philippines Transaction exempted becaus of international agreements if the PH is a member and special laws except those under PD 529 L M N Exports to a non vat registered Lease of residential unit with a monthly rental not exceeding P10. barters or exchange of goods. or striping) Sale or importation of fertilizers. simple processing of preparation or preservation for the market is considered in original form (e.Percentage and excise tax registers at BIR P500 for every separate and distinct establishment where business is conducted. . roasting. - - - - Importations of those who come to settle in the Philippines provided that it come within 90 days from arrival. - - ** the receipts should indicate that he is a Vat tax payer Exemptions from VAT section 109 of the NIRC. seeds..5m - *exempt transactions Basic Commodities * 0% rated exporters . Sale or importation of agricultural and marine food are their original state. includes poultry and livestock. sells.000 Sale. broiling.5 in the next 12 months - - - - Optional Registration Those that are not required but opt to. smoking. non-banks financial intermediaries performing quasi-judicial functions and other non bank intermediaries Gross sales does not exceed 1. Cancellation of registration If he does not plan to commence business anymore in the next 12 months If he makes a a written apliction and can demonstrate that he does not expect his gross sales receipt to exceed 1. and ingredients to make the feedsexcept those special feeds for pets. IF. dental.if you are not a VAT tax payer you have to register as a non-VAT taxpayer. importation of printing and publication of books new papers. goods and supplies by persons engaged in international shipping or air transport operations Serviced by banks. feeds. Importation of personal and household effects from those residents returning from abroad and those resettling in the Philippines provided that they are exempt from custom duties.5m Reasonable grounds to believe that he will sell more than 1.5m in the next 12months. Medical. Sale. properties or exchange of services. This will take from the 1st day of the following month.

5m and other dwelling worth mre than 2.5m are subject to VAT if they are covered by RA7279. Gross selling price is not gross sales VAT rates: 12% gross selling price . Sale the transfer of ownership of property in consideration of money. Tax base gross selling price exclude vat include excise. use or consumption not in the ordinary course of business that is ordinarily intended to be sold.export sale .) pasteurization.foreign currency dominated sale Property includes real property G&P includes the ff: Real property for primarily for sale/lease in the ordinary course of business Right previleges to use intellectual property. mackerel. canning and activities which physical or chemical processes alter the exterior texture or form the inner substance of a product in such a manner as to prepare it for special use to which could not have been put in its original form and condition. Transactions deemed sale Transfer.sales to persons or entities whose exemption under special laws *foreign currency dominated goods are those sold in consideration of foreign currency recognized in the Philippines except for automobiles and n-essential goods subject to excise tax. sardine. etc.Goods and Properties tangible or intangible capable of monetary estimation Goods movable 0% . Distribution or transfer of inventory to creditors in payment of debt Consignment of goods if goods were not sold 60 days after consignment.g. . tapes. Distribution or transfer of inventory to sharesholders or investors for their shares in the profits of a Vat registered person. Retirement of cessation - Sale of service Must be rendered in the Philippines All kinds of service except for those that have employer and employee relationship There is a fee remuneration or consideration - *those real property not primarily held for sale/lease but used as low cost socializing housing that is worth more than 1. Everything that the buyer pays the seller except the VAT shifted to the buyer. The right/privilege to use industrial commercial. disc Radio television satellite transmission and cable transmission time. scientific equipment The right to use films. If output > input VAT PAYABLE (liability in BS) If input < output deferred input tax in assets Presumptive Input Tax 4% on gross value of primary agricultural products by (e. patent etc.

Sign up to vote on this title
UsefulNot useful