BUSINESS TAX TRAIN
VALUE-ADDED TAX
ZERO-RATED
What is a zero-rated sale?
It is a sale, barter or exchange of goods,
properties and/or services subject to 0% VAT
pursuant to Sections 106 (A) (2) and 108 (B) of
the Tax Code. It is a taxable transaction for VAT
purposes, but shall not result in any output tax.
However, the input tax on purchases of goods,
properties or services, related to such zero-rated
sales, shall be available as tax credit or refund in
accordance with existing regulations.
What transactions are considered as zero-
rated sales?
The following services performed in the
Philippines by VAT-registered person shall be
subject to zero percent (0%) rate:
a. Processing, manufacturing or
repacking goods for other persons doing
business outside the Philippines which
goods are subsequently exported where
the services are paid for in acceptable
foreign currency and accounted for in
accordance with the rules and
regulations of the Bangko Sentral ng
Pilipinas (BSP);
b. Services other than processing,
manufacturing or repacking rendered
VAT-EXEMPT
What is VAT-exempt sale?
It is a sale of goods, properties or service and the use or
lease of properties which is not subject to output tax and
whereby the buyer is not allowed any tax credit or input tax
related to such exempt sale.
What are the VAT-exempt transactions?
a. Sale or importation of agricultural and marine The term "goods or properties" shall mean all
food products in their original state, livestock and
poultry of a kind generally used as, or yielding or
producing foods for human consumption; and
breeding stock and genetic materials therefore;
b. Sale or importation of fertilizers; seeds, seedlings
and fingerlings; fish, prawn, livestock and poultry
feeds, including ingredients, whether locally
produced or imported, used in the manufacture of
finished feeds (except specialty feeds for race
horses, fighting cocks, aquarium fish, zoo animals
and other animals considered as pets);
c. Importation of personal and household effects
belonging to residents of the Philippines returning
from abroad and non-resident citizens coming to
resettle in the Philippines; Provided, that such
SUBJECT TO VAT
What is the 12% VAT?
Value-Added Tax (VAT) is a form of sales tax. It is
a tax on consumption levied on the sale, barter,
exchange or lease of goods or properties and
services in the Philippines and on importation of
goods into the Philippines. It is an indirect tax,
which may be shifted or passed on to the buyer,
transferee or lessee of goods, properties or services.
What comprises "goods or properties"?
tangible and intangible objects, which are capable
of pecuniary estimation and shall include, among
others:
a. Real properties held primarily for sale to
customers or held for lease in the
ordinary course of trade or business;
b. The right or the privilege to use patent,
copyright, design or model, plan, secret
formula or process, goodwill, trademark,
trade brand or other like property or
right;
c. The right or privilege to use in the
Philippines of any industrial, commercial
or scientific equipment;
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 to a person engaged in business
conducted outside the Philippines or to
a non-resident person engaged in
business who is outside the Philippines
when the services are performed, the
consideration for which is paid for in
acceptable foreign currency and
accounted for in accordance with the
rules and regulations of the Bangko
Sentral ng Pilipinas (BSP);
c. Services rendered to persons or entities
whose exemption under special laws or
international agreements to which the
Philippines is a signatory effectively
subjects the supply of such services to
zero percent (0%) rate;
d. Services rendered to persons engaged in
international shipping or air transport
operations, including leases of property
for use thereof; Provided, that these
services shall be exclusively for
international shipping or air transport
operations. (Thus, the services referred
to herein shall not pertain to those made
to common carriers by air and sea
relative to their transport of passengers,
goods or cargoes from one place in the
Philippines to another place in the
Philippines, the same being subject to
twelve percent (12%) VAT under Sec.
108 of the Tax Code, as amended);
e. Services performed by subcontractors
and/or contractors in processing,
converting, or manufacturing goods for
an enterprise whose export sales
exceeds seventy percent (70%) of total
annual production;
goods are exempt from custom duties under the d. The right or the privilege to use motion
Tariff and Customs Code of the Philippines; picture films, films, tapes and discs; and
d. Importation of professional instruments and e. Radio, television, satellite transmission
implements, tools of trade, occupation or and cable television time.
employment, wearing apparel, domestic animals,
and personal and household effects ( except What comprises "sale or exchange of
vehicles, vessels, aircrafts machineries and other services"?
similar goods for use in manufacture which are
subject to duties, taxes and other charges)
belonging to persons coming to settle in the The term "sale or exchange of services" means the
Philippines or Filipinos or their families and performance of all kinds of services in the
descendants who are now residents or citizens of Philippines for others for a fee, remuneration or
other countries, such parties hereinafter referred consideration, whether in kind or in cash,
to as overseas Filipinos, in quantities and of the including those performed or rendered by the
class suitable to the profession, rank or position of following:
the persons importing said items, for their own use
and not barter or sale, accompanying such a. Construction and service contractors;
persons, or arriving within a reasonable time; b. Stock, real estate, commercial, customs
Provided, That the Bureau of Customs may, upon and immigration brokers;
the production of satisfactorily evidence that such c. Lessors of property, whether personal or
persons are actually coming to settle in the real;
Philippines and that the goods are brought from
d. Persons engaged in warehousing services;
their place of residence, exempt such goods from
payment of duties and taxes. e. Lessors or distributors of
cinematographic films;
e. Services subject to percentage tax under Title V of
the Tax Code, as amended; f. Persons engaged in milling, processing,
manufacturing or repacking goods for
f. Services by agricultural contract growers and
others;
milling for others of palay into rice, corn into grits,
and sugar cane into raw sugar; g. Proprietors, operators or keepers of
hotels, motels, rest houses, pension houses,
g. Medical, dental, hospital and veterinary services
inns, resorts, theatres, and movie houses;
except those rendered by professionals;
h. Proprietors or operators of restaurants,
h. Educational services rendered by private
refreshment parlors, cafes, and other
educational institutions duly accredited by the
eating places, including clubs and
Department of Education (DepED), the
caterers;
Commission on Higher Education (CHED) and the
Technical Education and Skills Development i. Dealers in securities;
Authority (TESDA) and those rendered by the j. Lending investors;
government educational institutions;
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 f. Transport of passengers and cargo by
domestic air or sea carriers from the
Philippines to a foreign country. (Gross
receipts of international air carriers and
international sea carriers doing
business in the Philippines derived from
transport of passengers and cargo from
the Philippines to another country shall
be exempt from VAT; however they are
still liable to a percentage tax of three
percent (3%) based on their gross
receipts derived from transport of cargo
from the Philippines to another country
as provided for in Sec. 118 of the Tax
Code, as amended); and
g. Sale of power or fuel generated through
renewable sources of energy such as,
but not limited to, biomass, solar, wind,
hydropower, geothermal and steam,
ocean energy, and other shipping
sources using technologies such as fuel
cells and hydrogen fuels; Provided,
however that zero-rating shall apply
strictly to the sale of power or fuel
generated through renewable sources of
energy, and shall not extend to the sale
of services related to the maintenance or
operation of plants generating said
power.
The following sales by VAT-registered persons
shall be subject to zero percent (0%) rate:
a. Export sales
1. The sale and actual shipment of
goods from the Philippines to a
foreign country, irrespective of
any shipping arrangement that
i. Services rendered by individuals pursuant to an
employer-employee relationship;
j. Services rendered by regional or area
headquarters established in the Philippines by
multinational corporations which act as
supervisory, communications and coordinating
centers for their affiliates, subsidiaries or branches
in the Asia-Pacific Region and do not earn or
derive income from the Philippines;
k. Transactions which are exempt under
international agreements to which the Philippines
is a signatory or under special laws except those
granted under P.D. No. 529 - Petroleum
Exploration Concessionaires under the Petroleum
Act of 1949;
l. Sales by agricultural cooperatives duly registered
and in good standing with the Cooperative
Development Authority (CDA) to their members,
as well as of their produce, whether in its original
state or processed form, to non-members, their
importation of direct farm inputs, machineries and
equipment, including spare parts thereof, to be
used directly and exclusively in the production
and/or processing of their produce;
m. Gross receipts from lending activities by credit or
multi-purpose cooperatives duly registered and in
good standing with the Cooperative Development
Authority;
n. Sales by non-agricultural, non-electric and non-
credit cooperatives duly registered with and in
good standing with CDA; Provided, that the share
capital contribution of each member does not
exceed Fifteen Thousand Pesos (P15,000.00) and
regardless of the aggregate capital and net surplus
ratably distributed among the members;
o. Export sales by persons who are not VAT-
registered;
k. Transportation contractors on their
transport of goods or cargoes, including
persons who transport goods or cargoes
for hire and other domestic common
carriers by land relative to their transport
of goods or cargoes;
l. Common carriers by air and sea relative
to their transport of passengers, goods or
cargoes from one place in the Philippines
to another place in the Philippines;
m. Sale of electricity by generating,
transmission by any entity including the
National Grid Corporation of the
Philippines (NGCP), and distribution
companies including electric cooperatives
shall be subject to twelve percent (12%)
VAT on their gross receipts.;
n. Franchise grantees of electric utilities,
telephone and telegraph, radio and/or
television broadcasting and all other
franchise grantees, except franchise
grantees of radio and/or television
broadcasting whose annual gross receipts
of the preceding year do not exceed Ten
Million Pesos (P10,000,000.00), and
franchise grantees of gas and water
utilities;
o. Non-life insurance companies (except
their crop insurances), including surety,
fidelity, indemnity and bonding
companies; and
p. Similar services regardless of whether or
not the performance thereof calls for the
exercise of use of the physical or mental
faculties.
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 may be agreed upon which may
influence or determine the
transfer of ownership of the
goods so exported, paid in
acceptable foreign currency or
its equivalent in goods or
services, and accounted for in
accordance with the rules and
regulations of the Bangko
Sentral ng Pilipinas (BSP);
2. The sale of raw materials or
packaging materials to a non-
resident buyer for delivery to
as a resident local export-
oriented enterprise to be used
in manufacturing, processing,
packing or repacking in the
Philippines of the said buyer's
goods, paid for in acceptable
foreign currency, and
accounted for in accordance
with the rules and regulations
of the BSP;
3. The sale of raw materials or
packaging materials to an
export-oriented enterprise
whose export sales exceed
seventy percent (70%) of total
annual production;
4. Transactions considered
export sales under Executive
Order No. 226, otherwise
known as the Omnibus
Investments Code of 1987, and
other special laws; and
5. The sale of goods, supplies,
equipment and fuel to persons
engaged in international
p. The following sales of real properties: The phrase "sale or exchange of services" shall
i. Sale of real properties not primarily held likewise include:
for sale to customers or held for lease in
the ordinary course of trade or business.
ii. Sale of real properties utilized for low-cost
housing as defined by RA No. 7279,
otherwise known as the "Urban
Development and Housing Act of 1992"
and other related laws, such as RA No.
7835 and RA No. 8763;
iii. Sale of real properties utilized for
specialized housing as defined under RA
No. 7279, and other related laws, such as
RA No. 7835 and RA No. 8763, wherein
price ceiling per unit is Php 450,000.00 or
as may from time to time be determined
by the HUDCC and the NEDA and other
related laws;
iv. Sale of residential lot valued at One
Million Five Hundred Thousand Pesos
(P1,500,000.00) and below, or house and
lot and other residential dwellings valued
at Two Million Five Hundred Thousand
Pesos (P2,500,000.00) and below, as
adjusted using latest Consumer Price
Index values. (If two or more adjacent
lots are sold or disposed in favor of one
buyer, for the purpose of utilizing the lots
as one residential lot, the sale shall be
exempt from VAT only if the aggregate
value of the lots do not exceed One Million
Five Hundred Thousand Pesos
(P1,500,000.00). Adjacent residential lots,
although covered by separate titles and/or
separate tax declarations, when sold or
disposed to one and the same buyer,
whether covered by one or separate Deed
a. The lease of use of or the right or privilege
to use any copyright, patent, design or
model, plan, secret formula or process,
goodwill, trademark, trade brand or other
like property or right;
b. The lease or the use of, or the right to use
of any industrial, commercial or scientific
equipment;
c. The supply of scientific, technical,
industrial or commercial knowledge or
information;
d. The supply of any assistance that is
ancillary and subsidiary to and is
furnished as a means of enabling the
application or enjoyment of any such
property, or right or any such knowledge
or information;
e. The supply of services by a nonresident
person or his employee in connection with
the use of property or rights belonging to,
or the installation or operation of any
brand, machinery or other apparatus
purchased from such non-resident
person;
f. The supply of technical advice, assistance
or services rendered in connection with
technical management or administration
of any scientific, industrial or commercial
undertaking, venture, project or scheme;
g. The lease of motion picture films, films,
tapes and discs; and
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 shipping or international air
transport operations;
Provided, That the goods,
supplies, equipment, and fuel
shall be used exclusively for
international shipping or air
transport operations;
Provided, that the same is
limited to goods, supplies,
equipment and fuel that shall
be used in the transport of
goods and passengers from a
port in the Philippines directly
to a foreign port, or vice-versa
without docking or stopping at
any other port in the
Philippines unless the docking
or stopping at any other
Philippine port is for the
purpose of unloading
passengers and/or cargoes that
originated from abroad, or to
load passengers and/or cargoes
bound for abroad;Provided,
further, that if any portion of
such fuel, goods or supplies is
used for purposes other than
the mentioned in this
paragraph, such portion of
fuel, goods and supplies shall
be subject to twelve percent
(12%) output VAT.
b. Sales to Persons or Entities Deemed
Tax-exempt under Special Law or
International Agreement
Sale of goods or property to persons or entities
who are tax-exempt under special laws or
of Conveyance, shall be presumed as a sale h. The lease or the use of or the right to use
of one residential lot.) radio, television, satellite transmission
q. Lease of residential units with a monthly rental and cable television time.
per unit not exceeding Fifteen Thousand Pesos
(P15,000.00), regardless of the amount of What transactions are considered deemed
aggregate rentals received by the lessor during sales?
the year; Provided, that not later than January
31, 2009 and every three (3) years thereafter, the
The following transactions are considered as
amount of P10,000.00 shall be adjusted to its
deemed sales:
present value using the Consumer Price Index, as
published by the Philippine Statistics Authority
(Formerly known as NSO); Transfer, use or consumption, not in the course of
business, of goods or properties originally intended
r. Sale, importation, printing or publication of books
for sale or for use in the course of business.
and any newspaper, magazine, review or bulletin
Transfer of goods or properties not in the course of
which appears at regular intervals with fixed
business can take place when VAT-registered
prices for subscription and sale and which is not
person withdraws goods from his business for his
devoted principally to the publication of paid
personal use;
advertisements;
s. Transport of passengers by international carriers;
t. Sale, importation or lease of passenger or cargo a. Distribution or transfer to:
vessels and aircraft, including engine equipment o Shareholders or investors as
and spare parts thereof for domestic or
share in the profits of the VAT-
international transport perations; Provided, that
the exemption from VAT on the importation and registered person; or
local purchase of passenger and/or cargo vessels o Creditors in payment of debt or
shall be subject to the requirements on restriction
obligation
on vessel importation and mandatory vessel
retirement program of Maritime Industry b. Consignment of goods if actual sale is not
Authority (MARINA); made within sixty (60) days following the
u. Importation of fuel, goods and supplies by persons
date such goods were consigned.
engaged in international shipping or air transport
operations; Provided, that the said fuel, goods and Consigned goods returned by the
supplies shall be used exclusively or shall pertain consignee within the 60-day period are not
to the transport of goods and/or passenger from a
deemed sold;
port in the Philippines directly to a foreign port, or
vice-versa, without docking or stopping at any c. Retirement from or cessation of business,
other port in the Philippines unless the docking or with respect to all goods on hand, whether
stopping at any other Philippine port is for the
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international agreements to which the
Philippines is a signatory, such as, Asian
Development Bank (ADB), International Rice
Research Institute (IRRI), subject such sales to
zero rate.
What are the transactions which are no
longer subject to zero-percent (0%)?
1. Sale of gold to BSP
2. Foreign-currency denominated sales
Upon the successful establishment and
implementation of an enhanced VAT refund
system by the Department of Finance (DOF),
what are the transactions that will now be
subject to twelve percent (12%) and no longer be
subject to zero percent (0%)?
1. The sale of raw materials or packaging
materials to a non-resident buyer for
delivery to a resident local export-
oriented enterprise to be used in
manufacturing, processing, packing or
repacking in the Philippines of the said
buyer's goods, paid for in acceptable
foreign currency, and accounted for in
accordance with the rules and
regulations of the BSP;
2. The sale of raw materials or packaging
materials to an export-oriented
enterprise whose export sales exceed
seventy percent (70%) of total annual
production;
3. Transactions considered export sales
under Executive Order No. 226,
otherwise known as the Omnibus
purpose of unloading passengers and/or cargoes capital goods, stock-in-trade, supplies or
that originated form abroad, or to load passengers
and/or cargoes bound for abroad; Provided, materials as of the date of such retirement
further, that if any portion of such fuel, goods or or cessation, whether or not the business
supplies is used for purposes other that the
is continued by the new owner or
mentioned in the paragraph, such portion of fuel,
goods and supplies shall be subject to 12% VAT; successor. The following circumstances
v. Services of banks, non-bank financial shall, among others, give rise to
intermediaries performing quasi-banking transactions "deemed sale";
functions, and other non-bank financial
o Change of ownership of the
intermediaries, such as money changers and
pawnshops, subject to percentage tax under business. There is a change in
Sections 121 and 122, respectively of the Tax Code; the ownership of the business
and
w. Sale or lease of goods and services to senior citizens when a single proprietorship
and persons with disabilities, as provided under incorporated; or the
Republic Act Nos. 9994 (Expanded Senior Citizens
proprietor of a single
Act of 2010) and 10754 (An Act Expanding the
Benefits and Privileges of Persons with Disability), proprietorship sells his entire
respectively; business
x. Transfer of property in merger or consolidation o Dissolution of a partnership and
(pursuant to Section 40(C)(2) of the Tax Code, as
amended); creation of a new partnership
y. Association dues, membership fees, and other which takes over the business.
assessments and charges collected on a purely
reimbursement basis by homeowners’ associations
and condominium established under Republic Act
No. 9904 (Magna Carta for Homeowners and
Homeowner’s Association) and Republic Act No.
4726 (The Condominium Act), respectively;
z. Sale of gold to the Banko Sentral ng Pilipinasn
(BSP) (previously zero-rated transaction);
aa. Sale of drugs and medicines prescribed for
diabetes, high cholesterol, and hypertension
(beginning on January 1, 2019 as determined by
the Department of Health); and
bb. Sale or lease of goods or properties or the
performance of services other than the
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 Investments Code of 1987, and other transactions mentioned in the preceding
special laws paragraphs, the gross annual sales and/or receipts
4. Processing, manufacturing or do not exceed the amount of Three Million Pesos
repacking goods for other persons doing (Php 3,000,000.00). Note: Self-employed
business outside the Philippines which individuals and professionals availing of the 8% on
goods are subsequently exported where gross sales and/or receipts and other non-
the services are paid for in acceptable operating income, under Sections 24 (A)(2)(b) and
foreign currency and accounted for in 24 (A)(2)(c)(2) of the NIRC shall also be exempt
accordance with the rules and from the payment of twelve (12%) VAT.
regulations of the Bangko Sentral ng
Pilipinas (BSP); and
5. Services performed by
subcontractors and/or contractors
in processing, converting, or
manufacturing goods for an
enterprise whose export sales
exceeds seventy percent (70%) of
total annual production.

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OTHER PERCENTAGE TAX (OPT)
Quarterly Percentage Tax Rates Table

Coverage Taxable Base Tax Rate

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

Domestic carriers and keepers of garages Gross receipts 3%

International air/shipping carriers doing business in the Philippines Gross receipts on transport of cargo from the Philippines 3%
to a foreign country

Franchise grantees: 2%

Gas and water utilities Gross receipts 3%

Radio and television broadcasting companies whose annual gross receipts 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 from the Amount paid for the service 10%
Philippines
Banks and non-bank financial intermediaries performing quasi-banking Interest, commissions and discounts from lending activities as well as income
functions 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%

8
 Dividends and equity shares and net income of subsidiaries 0%

Royalties, rentals of property, real or personal, profits from 7%

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 foreign 7%

currency, debt securities, derivatives and other similar
financial instruments

Other non-bank financial intermediaries Interest, commissions, discounts and all other items treated 5%
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%

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

companies or associations)

Agents of foreign insurance companies (except reinsurance premium):

Insurance agents authorized under the Insurance Code to procure policies Total premiums collected 4%
of insurance for companies not authorized to transact business in the
Philippines

Owners of property obtaining insurance directly with foreign insurance Total premiums paid 5%
companies
Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%

9
Cabarets, Night or Day Clubs, videoke bars, karaoke bars, karaoke Gross receipts 18%
televisions, karaoke boxes and music lounges

Boxing exhibitions (except when the World or Oriental Championship is at Gross receipts 10%
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 percentage taxes of Gross receipts 15%
whatever nature and description)

Jai-alai and race track Gross receipts 30%

Winnings on horse races  Winnings or 'dividends' 10%
 Winnings from double forecast/quinella and trifecta 4%
bets
 Prizes of owners of winning race horses 10%

10
 Percentage Tax for Transactions Involving Shares Rates Table

Coverage Basis Tax Rate

Sale, barter, exchange or other disposition of shares of stock listed and traded through Gross selling price or gross value in money 6/10 of 1%
the Local Stock Exchange other than the sale by a dealer of securities
Sale, barter or exchange or other disposition through: Gross selling price or gross value in money

 Initial Public Offering (IPO) – the issuing corporation shall pay the imposed tax Proportion of disposed shares to total outstanding shares after
the listing in the local stock exchange:
 Secondary Public Offering – the seller shall pay the imposed tax  Up to 25% 4%

 Over 25% but not over 33 1/3% 2%

 Over 33 1/3% 1%

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EXCISE TAX
EXCISE TAX RATES:

A. ALCOHOL PRODUCTS

NEW TAX RATES based on Republic Act No. 10351 Remarks

PARTICULARS 2018
2013 2014 2015 2016 2017
onwards
A. DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX
1) AD VALOREM TAX RATE - Based on
the Net Retail Price (NRP) per proof
(excluding the excise and value-added 15% 15% 20% 20% 20% 20%
taxes);
and
Effective 1/1/2016, the
specific tax rate shall be
2) SPECIFIC TAX - Per proof liter Php20 Php20 Php20 Php20.80 Php21.63
increased by 4% every year
thereafter
B. WINES, per liter of volume capacity
1) Sparkling wines/ champagnes, where the
NRP (excluding the excise and VAT) per
bottle of 750ml volume capacity, regardless
of proof is: Effective 1/1/2014, the
specific tax rate shall be
Php500.00 or less Php250 Php260 Php270.40 Php281.22 Php292.47
increased by 4% every year
More than Php500.00 Php700 Php728 Php757.12 Php787.40 Php818.90
thereafter
2) Still wines and carbonated wines
containing 14% of alcohol by volume or Php30.00 Php31.20 Php32.45 Php33.75 Php35.10
less

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3) Still wines and carbonated wines
containing more than 14% (of alcohol by
Php60.00 Php62.40 Php64.90 Php67.50 Php70.20
volume) but not more 25% of alcohol by
volume
4) Fortified wines containing more than
Taxed as distilled spirits
25% of alcohol by volume
C. FERMENTED LIQUORS , per liter of volume capacity
1) If the NRP (excluding excise and VAT) Effective 1/1/2018, the
per liter of volume capacity is: specific tax rate shall be
Php 50.60 and below Php15.00 Php17.00 Php19.00 Php21.00 Php23.50 increased by 4% every year
More than Php 50.60 Php20.00 Php21.00 Php22.00 Php23.00 Php23.50 thereafter
Effective 1/1/2014, the
2) If brewed and sold at microbreweries or
specific tax rate shall be
small establishments such as pubs and Php28.00 Php29.12 Php30.28 Php31.50 Php32.76
increased by 4% every year
restaurants, regardless of the NRP
thereafter
NOTE:
IN CASE OF FERMENTED LIQUORS AFFECTED BY THE "NO DOWNWARD RECLASSIFICATION " PROVISION, THE 4%
INCREASE SHALL APPLY TO THEIR RESPECTIVE APPLICABLE TAX RATES

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B. TOBACCO PRODUCTS

NEW TAX RATES based on Republic Act No. 10351 Remarks 2018
PARTICULARS
2013 2014 2015 2016 2017 onwards
A. TOBACCO PRODUCTS, per kilogram
1. Tobacco Products
(a) Tobacco twisted by hand or reduced into a condition to be
consumed in any manner other than the ordinary mode of drying and Php1.75 Php1.82 Php1.89 Php1.97 Php2.05 Effective
curing; 1/1/2014, the
(b) Tobacco prepared or partially prepared with or without the use of specific tax rate
any machine or instrument or without being pressed or sweetened; Php1.75 Php1.82 Php1.89 Php1.97 Php2.05 shall be increased
and by 4% every year
(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems, thereafter
Php1.75 Php1.82 Php1.89 Php1.97 Php2.05
midribs and sweepings of tobacco;
2. Chewing tobacco unsuitable for use in any other manner Php1.50 Php1.56 Php1.62 Php1.68 Php1.75
B. CIGARS, per cigar
3. Cigars Effective
(a) Based on the NRP per cigar (excluding the excise and value-added 1/1/2014, the
20% 20% 20% 20% 20% specific tax rate
taxes), and
shall be increased
(b) Per cigar Php5.00 Php5.20 Php5.41 Php5.62 Php5.85 by 4% every year
thereafter
C. CIGARETTES , per pack
NEW TAX RATES based on RA No. 10963 (TRAIN Law)
January 1, July 1, 2018 January 1, January 1,
PARTICULARS 2018 until until 2020 until 2022 until
January 1, 2024 onwards
June 30, December December December
2018 31, 2019 31, 2021 31,2023
1. Cigarettes packed by hand Php32.50 Php35.00 Php37.50 Php40.00
2. Cigarettes packed by machine Php32.50 Php35.00 Php37.50 Php40.00

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 Effective 1/1/2024, the
specific tax rate shall be
increased by 4% every
year thereafter

INSPECTION FEE - There shall be collected inspection fees on leaf tobacco, scrap, cigars, Cigarettes and other manufactured tobacco
and tobacco products as follows:

PRODUCT TYPE INSPECTION FEE

(1) Cigars P 0.50 per thousand pieces or fraction thereof
(2) Cigarettes P 0.10 per thousand sticks or fraction thereof
(3) Leaf Tobacco P 0.02 per kilogram or fraction thereof
(4) Scrap and other manufactured tobacco P 0.03 per kilogram or fraction thereof

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C. PETROLEUM PRODUCTS

EFFECTIVITY (RA 10963-TRAIN Law)

PRODUCT TYPE January 1, 2018 January 1, 2019 January 1, 2020
(a) Lubricating oils and greases, including but not limited to base stock for lube Php9.00 Php10.00
oils and greases, high vacuum distillates, aromatic extracts and other similar
preparations, and additives for lubricating oils and greases, whether such
additives are petroleum based or not,per liter and kilogram respectively, of
volume capacity or weight
(a.1) Locally produced or imported oils previously taxed but are subsequently reprocessed, re-refined or
recycled, per liter and kilogram of volume capacity or weight.
Php8.00
(b)Processed gas, per liter of volume capacity
(c)Waxes and petrolatum, per kilogram
(d)Denatured alcohol to be used for motive power , per liter of volume capacity
(e)Asphalt, per kilogram
(f)Naphtha, regular gasoline, pyrolysis gasoline and other similar products of Php9.00 Php10.00
distillation, per liter of volume capacity
Php7.00
(g)Unleaded premium gasoline, per liter of volume capacity

(h)Kerosene, per liter of volume capacity Php3.00 Php4.00 Php5.00

(i)Aviation turbo jet fuel,aviation gas, per liter of volume capacity Php4.00 Php4.00 Php4.00
(j)Kerosene when used as aviation fuel, per liter of volume capacity
(k)Diesel fuel oil, and on similar fuel oils having more or less the same Php4.50 Php6.00
generating power, per liter of volume capacity
(l)Liquified petroleum gas used for motive power, per kilogram

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(m)Bunker fuel oil, and on similar oils having more or less the same generating
power, per liter of volume capacity Php2.50
(n)Petroleum coke, per metric ton
(o)Liquified petroleum gas, per kilogram Php1.00 Php2.00 Php3.00
(p)Naphtha and pyrolysis gasoline, when used as raw material in the production Php0.00 Php0.00
of petrochemical products or in the refining of petroleum products, or as
replacement fuel for natural-gas-fired-combined cycle power plant, in lieu of
lacally-extracted natural gas during the non-availability thereof, per liter of
volume capacity Php0.00
(q)Liquified petroleum gas, when used as raw material in the production of
petrochemical products, per kilogram
(r)Petroleum coke when used as feedstock to any power generating facility, per
metric ton

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D. MINERALS AND MINERAL PRODUCTS
PRODUCT TYPE
Coal and coke (Domestic and Imported)
Nonmetallic Minerals and Quarry Reources (Locally extracted or
produced)
Nonmetallic Minerals and Quarry Resources (Imported)
Locally-extracted natural gas and liquefied natural gas
All Metallic Minerals (locally extracted or produced copper, gold,
chromite and other metallic minerals)
Imported copper, gold, chromite and other metallic minerals
On indigenous petroleum
TAX RATES (RA 10963-TRAIN Law)
January 1, 2018 - Php50.00
January 1, 2019 - Php100.00
January 1, 2020 - Php150.00
and onwards
Four percent (4%) based on the actual market value of the gross output
thereof at the time of removal
Four percent (4%) based on the value used by the Bureau of Customs (BOC)
in determining tariff and customs duties, net of excise tax and value-added
tax
Exempt
Four percent (4%) based on the actual market value of the gross output
thereof at the time of removal
Four percent (4%) based on the value used by BOC in determining
tariff and customs duties, net of excise tax and value added tax
Six percent (6%) of the fair international market price thereof, on the first taxable sale, barter,
exchange or such similar transaction, such tax to be paid by the buyer or purchaser before
removal from the place of production. The phrase “first taxable sales, barter, exchange or
similar transaction’' means the transfer of indigenous petroleum in its original, state to a first
taxable transferee. The fair international market price shall be determined in consultation with
appropriate government agency.
For the purpose of this Subsection, “indigenous petroleum” shall
include locally-extracted mineral oil, hydrocarbon gas, bitumen, crude
asphalt. mineral gas and all other similar or naturally associated substances
with the exception of coal, peat, bituminous shale and/or stratified mineral
deposits."
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NOTE:
In the case of mineral concentrates not traded in commodity exchanges in the Philippines or abroad, such as copper concentrate, the actual market
value shall be the world price quotations of the refined mineral products content thereof prevailing in the said commodity exchanges, after
deducting the smelting, refining and other charges incurred in the process of converting the mineral concentrates into refined metal traded in
those commodity exchanges.

On minerals and mineral products sold or consigned abroad, the actual cost of ocean freight and insurance shall be deducted from the tax base.

E. AUTOMOBILES AND OTHER MOTOR VEHICLES

NET MANUFACTURER'S PRICE/IMPORTER'S SELLING PRICE TAX RATES (RA 10963 (TRAIN Law)
OVER UP TO RATE
0 Php600,000 4%
Php600,000 Php1,000,000 10%
Php1,100,000 Php4,000,000 20%
Php4,000,000 over 50%

F. NON-ESSENTIAL GOODS

 Twenty percent (20%) based on the wholesale price or the value of importation used by the Bureau of Customs in
determining Tariff and Customs Duties, net of Excise and Value-Added taxes

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G. SWEETENED BEVERAGES (RA 10963-TRAIN Law)

PRODUCT TAX RATE

Per Liter of Volume Capacity
Using purely caloric sweeteners, and purely non-caloric sweeteners, or a mix of caloric and non-caloric Php6.00
sweeteners
Using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener Php12.00
Using purely coconut sap sugar and purely steviol glycosides Exempt

H. INVASIVE COSMETIC PROCEDURES - (RA 10963-TRAIN Law)

SERVICE Tax Rate

Performance of Services on Invasive Cosmetic Procedures 5%

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