1 Day TRAIN PDF

RA 10963  
Tax Reform for Acceleration and

Inclusion (TRAIN) –
2
RA 8424 effective 1-1-1997
Amended Sections:
5,6,24,25,27,31,32,33,34,51,52,56,57,58,74,79,84,86,90,91,97,99,100
101, 106,107,108,109,110,112,114,116,127,128,129,145,148,149,151
155, 171 174,175,177,178,179,180,181,182,183,186,188,189,190, 191
192,193, 194, 195,196, 197,232,236,237,249,254,264,269 and 288
NEW SECTIONS:
51-A, 148-A, 150-A, 150-B,237-A, 264-A, 264-B
and 265-A
REPEALED SECTIONS:
35, 62 and 89
Repealed
Section 35 – Allowance of Personal
Exemption for Individual
Taxpayer
Section 62 – Exemption Allowed to Estates
and Trusts
Section 89 – Notice of Death to be Filed
Tax Particulars National Internal R.A. No. 10963
Revenue Code of 1997
On the powers and authority granted to the Commissioner of Internal
Revenue
Power to obtain Sec. 5 (B) Commissioner’s Additional provision:
power to obtain information Submission of a tax incentive
information, and to from any person other than r e p o r t b y C o o p e r a t i v e
the person whose internal Development Authority to the
summon, examine, revenue tax liability is subject BIR and the DOF. The report
and take testimony to audit or investigation or shall include information on
the income tax, VAT, and
from any office or officer of other tax incentive availed of.
of persons t h e n a t i o n a l a n d l o c a l The tax incentive report shall
governments, government be included in the database
agencies a n d c r e a t e d u n d e r t h e Ta x
instrumentalities. Incentives Management and
Transparency Act (“TIMTA”).
Tax National Internal R.A. No. 10963
Revenue Code of 1997
Particulars
Sec. 6 (A) The The Commissioner or his
Commissioner’s Commissioner or his duly authorized
authority on duly authorized
representative shall have
Examination of representative may
authorize the the said authority
Returns and NOTWITHSTANDING ANY
examination of any
determination
taxpayer and the LAW requiring the prior
of tax due assessment of the authorization of any
correct amount of government agency or
tax after a return
instrumentality.
has been filed.
6
Tax Old tax rules TRAIN
Particulars
Sec. 6 (B) The • Requires consultation with
Commissioner’s Commissioner is public and private appraisers’
authority to authorized to and prior notice to affected
prescribe real determine the taxpayers.
• Automic adjustment every 3
property fair market value years
values of real • No adjustment in zonal
properties. valuation shall be valid unless
published or posted.
• Records thereof shall be open
to the public
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Revenue Regulations No. 8-2018
on Income Tax
2
NIRC NIRC TRAIN
Provision
Section 24 Taxable income of individuals are subject to the Revised personal income tax
Income tax following graduated rates: brackets of 2018-2022:
rates on Tax Schedule Tax Schedule effectiveJanuary 1, 2018to
individual December31,2022
citizen and Not over P10,000 5%
individual Not over 0%
resident alien Over P10,000 but not P500 +10% of over
P250,000
over P30,000 P10,000
of the
Philippines Over P30,000 but not P2,500 +15% of over
over P70,000 P30,000
Over P70,000 but not P8,500 +20% of over

over P140,000 P70,000
Over P140,000 but not over P22,500 +25% of over
P250,000 P140,000
3 NIRC NIRC TRAIN
Provision
Section 24 Taxable income of individuals are subject Revised personal income tax brackets of
Income tax to the following graduated rates: 2018-2022:
rates on Tax Schedule Tax Schedule effectiveJanuary 1, 2018to December31,
2022
individual
citizen and Over P250,000 but not P50,000 +30%of the Over P250,000 but not 20%of the excess over
individual over P500,000 excess over over P400000 P250,000
resident alien P250,000
Over P400,000 but not P30,000 +25% of the
of the over P800,000 excess over P400,000
OverP500,000 P125,000 +32% of the
Philippines excess over P500,000 Over P800,000 but not P130,000 +30% of the
over P2million excess over P800,000
Over P2Million but not P490,000 +32% of the

over P8Million excess over P2Million
OverP8Million P2,410,000 +35% of
the excess over
P8Million
4 NIRC NIRC TRAIN
Provisio
n
Section 24 For 2023 onwards:
Income tax rates Tax Schedule effectiveJanuary 1, 2023 onwards
on individual
citizen and Not over P250,000 0%
individual
resident alien of Over P250,000 but 15%of the excess over
not over P400,000 P250,000
the Philippines
Over P400,000 but P22,500 +20% of the
not over P800,000 excess over P400,000
Over P800,000 but P102,500 +25% of the
not over P2,000,000 excess over P800,000
Over P2Million but P402,500 +30% of the
not over P8Million excess over P2Million
Over P8Million P2,202,500 +35% of the
excess over P8Million
5
➢ Individuals Earning Purely Compensation Income
• Taxed based on the graduated income tax rates

Sec. 3 prescribed.
Income Tax • Taxable income is the gross compensation income less
Rates on non-taxable income/benefits such as but not limited to:
Individual
Citizen & 1. 13th month pay and other benefits
Individual (subject to limitations)
Resident 2. de minimis benefits
Alien 3. employee’s share in the SSS, GSIS,
PHIC, Pag-ibig contributions
4. union dues.
6
➢ Individuals Earning Purely Compensation Income.
1. Minimum wage earners (MWE) shall be
Sec. 3 exempt from income tax:
Income Tax • statutory minimum wage
Rates on • holiday pay
Individual
• overtime pay
Citizen &
Individual • night shift differential pay and
Resident • hazard pay
Alien
2. Husband & wife shall compute their individual income
tax separately based on their respective taxable
income;
7 NIRC NIRC TRAIN
Provisio
n
Section 24 Taxable income For purely self-employed and/or professionals
Income tax of self-
employed and/or is subject to the whose gross sales/receipt and other non-
professionals same graduated operating income do not exceed the VAT
rates threshold of P3Million, the tax shall be, at the
taxpayer’s option, either:
1. Income tax based on the graduated income
tax rates for individuals; OR
2. 8% income tax on gross sales/receipts and
other non-operating income in excess of
P250,000 in lieu of the graduated income tax
rates and the percentage tax under Sec. 116
8
➢ Taxpayer shall be considered as having availed

of the graduated income tax rates
Sec. 3
• unless signifies the intention to elect the 8%
Income Tax
Rates on income tax rate in the 1st Quarter Percentage
Individual and/or Income Tax Return or on the initial
Citizen & quarter return;
Individual
Resident • election shall be irrevocable and no
Alien amendment of option shall be made
9
➢ The option to be taxed at 8% income tax rate is NOT

available to:
Sec. 3
Income Tax • individuals with gross sales/receipts and other non-
Rates on operating income which exceeded
Individual ₱3,000,000.00
Citizen & • a VAT-registered taxpayer
Individual • those subject to Other Percentage Taxes under Title V
Resident of the Tax Code, as amended, except under Section
Alien 116
• partners of a General Professional Partnership
(GPP)
• have not signified intention to avail of this
10
A taxpayer who signifies the intention to avail of the 8% income tax rate
option, and is conclusively qualified for said option at the end of the
taxable year:
Sec. 3
Income Tax • shall compute the final annual income tax due based on
the actual annual gross sales/receipts and other non-
Rates on operating income
Individual
Citizen & • Income tax is in lieu of the graduated rates of income tax
Individual and the percentage tax under Sec. 116
Resident • Financial Statements (FS) is not required
Alien • Bookkeeping and invoicing/ receipting rules still apply
11
➢ Automatically subject to the graduated rates even if

Sec. 3 initially selected the 8% income tax rate option:
Income Tax
Rates on • if taxpayer’s gross sales/receipts and other non-
Individual
operating income exceeded the VAT threshold of
Citizen &
Individual P3,000,000 at any time
Resident • allowed a tax credit for the previous quarter/s
Alien income tax payment/s under the 8% income tax
rate option
12 • A taxpayer subject to the graduated income
tax rates (either selected this or failed to
signify chosen intention or failed to qualify)
Sec. 3
Income Tax is also subject to the applicable business
Rates on tax, if any.
Individual
Citizen & • FS shall be required
Individual • Audited FS mandatory for those with
Resident
Alien gross sales/receipts of more than the VAT
threshold
14 NIRC NIRC TRAIN
Provision
Section 24 Taxable income For mixed income earners (earning both compensation
Income tax of is subject to the income and income from business and/or practice of
mixed same graduated profession), their income taxes shall be:
income rates 1. For income from compensation: based on
earners
graduated income tax rates for individuals, AND
2. For income from business and/or practice of profession:
a. Gross sales/receipts and other non-operating
income which do not exceed the VAT threshold of
P3Million –
income tax based on graduated income tax rates on
taxable income OR 8% income tax on gross sales/
receipts and other non-operating income, at the
taxpayer’s OPTION
b. Gross sales/receipts and other non-operating
income which exceeds the VAT threshold of P3Million –
income
tax based on graduated tax rates for individuals
16 Mixed Income (Continuation) under 8%...
• The excess of the P250,000.00 over the actual taxable

compensation income is not a reduction against the taxable
Sec. 3 income from business/practice of profession under the 8%
Income Tax income tax rate option.
Rates on
Individual • The total tax due shall be the sum of:
Citizen & (1) tax due from compensation computed using the
Individual graduated income tax rates; and
Resident
Alien (2) tax due from self-employment/practice of profession
(product of 8% IT rate multiply with the total gross
sales/receipts and other non-operating income)
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Sec. 3 • option to be taxed under the graduated income tax

Income Tax rates for income from business/practice of
Rates on
Individual profession, tax due shall be based on the total
Citizen & taxable income:
Individual
Resident combine the taxable income from both
Alien
compensation and business/practice of
profession multiply by the graduated tax rate
18
A taxpayer who initially presumed that the gross sales/receipts for the
taxable year and other non-operating income will not exceed the
₱3,000,000.00 VAT threshold but has actually exceeded the same during
Sec. 12 the taxable year, shall
Registration
Updates • immediately update registration from non-VAT to a VAT
taxpayer
• update registration immediately within the month following the
month the sales/receipts exceeded the VAT threshold
• be liable to VAT prospectively starting on the first day following
the month when the threshold is breached
19 A taxpayer who initially presumed that the gross sales/receipts for the taxable
year and other non-operating income will not exceed the P3,000,000.00 …,
shall: (continuation)
Sec. 12
• pay the required percentage tax from the beginning of the taxable
Registration year or commencement of business/practice of profession until
Updates the time the taxpayer becomes liable for VAT - without imposition
of penalty if timely paid on the immediately succeeding month/
quarter.
Thus, there may be an instance when a taxpayer files two (2)

business tax returns in a month/quarter –i.e., percentage and VAT
returns.
20
A VAT taxpayer who did notexceed theVAT threshold within the
immediately preceding three (3) year period, mayopttobe a non-
VAT taxpayer and avail of the8% income taxrate option:
Sec. 12
Registration
Updates • update the registration records on or before the first
quarter of a taxable year
• remain liable for VAT for as long as there is no update
of registration and VAT-registered invoices/receipts are
continuously issued
• updates shall be subject to existing rules and
regulations
21 A non-VAT taxpayer who volunteers to be a VAT taxpayer knowing that
sales/receipts and other non-operating income will exceed the VAT
threshold, shall update registration records - becomes liable to VAT on the
day when updating is made.
Sec. 12
Registration • automatically be subject to the graduated IT rates if the 8% IT
Updates rate option is initially selected; any income tax paid previously
shall be deducted from the income tax due under the graduated
IT rates; percentage tax due from the beginning shall be due on
the month/quarter immediately following registration update.
• However, if the graduated income tax rates is selected from the
beginning - ceases to be liable to percentage tax and instead is
now liable to VAT.
22 In connection with the provision on the 8% income tax
rate option under Section 24(A)(2)(b) and Section
24(A)(2)(c)
Sec. 13 - All existing VAT registered taxpayers whose gross sales/
receipts and other non-operating income in
Transitory the preceding year did not exceed the VAT
Provisions threshold of ₱3,000,000.00:
• option to update their registration to non- VAT on or

before March 31, 2018 (now April 30, 2018)
• existing procedures on registration updates, and the
inventory and surrender/cancellation of unused
VAT invoices/receipts shall apply
23
NIRC Provision NIRC TRAIN
Section 24 (B) Philippine Charity Philippine Charity Sweepstakes

(1) Sweepstakes and Lotto and Lotto winnings of more than
Final tax on winnings –exempt from the P10,000 shall be subject to the
winnings 20% final tax 20% final tax
Section 24 (B) Interest income received by The rate of final tax on interest
(1) an individual taxpayer income received by resident
Final tax on (except a non-resident individual taxpayer under the
interest on individual) from a depository expanded foreign currency
foreign currency bank under the expanded deposit system increased from
deposit foreign currency deposit 7.5% to 15% final tax
(EFCD) system is subject to
7.5% final tax
24
Section 24 (C) The capital gains tax on net capital The final tax rate of 15% for net capital
Capital gains tax gains realized from sale, barter, or gains realized during the taxable year from
on sale of shares exchange or other disposition of the sale, barter, exchange or other
not traded through shares of stock in a domestic disposition of shares of stock in a domestic
the stock corporation not traded through the corporation except shares sold or
exchange stock exchange is: disposed of through the stock exchange
Not over P100,000 –5%

On any amount in excess
of P100,000 –10%
26 NIRC Provision NIRC TRAIN
Section 32 (B) The amount of tax-exempt 13th The amount of tax-exempt 13th month pay
Tax exempt 13th month pay and other benefits is and other benefits is increased to
month pay P82,000. P90,000.
Section 33 (A) Tax Fringe benefits given to non- The Fringe Benefits Tax is increased
on fringe benefits rank and file employees are to 35% effective January 1, 2018
given to non-rank subject to 32% final tax The grossed up monetary value of the
and file employees The grossed up monetary value fringe benefit given to non- rank and file
of the fringe benefit given to non- employees shall be determined by
rank and file employees shall be dividing the actual monetary value by
determined by dividing the actual 65%
monetary value by 68%
Section 34 (M) The allowable deduction for Allowable deduction for premium
Allowable premium payments on health payments on health and/or hospitalization
deduction for and/or hospitalization insurance insurance of an individual taxpayer is
premium payments of an individual taxpayer is removed.
on health and/or P2400 per year or P200 per
hospitalization month, subject to a gross family
insurance income threshold of P250,000.
Section 51 An individual whose gross Individual taxpayers whose taxable income

Filing of individual income does not exceed his does not exceed P250,000 shall not be
income tax return total personal and additional required to file an income tax return:
exemptions for dependents are Provided, That a citizen or alien individual
not required to file income tax engaged in business or practice of
return (ITR). profession within the Phils. shall file an ITR
regardless of the amount of gross income
29
Section 51-A No provision Substituted filing of ITRs is available for individual

Substituted Filing taxpayers (requirements):
of income tax Receiving purely compensation income,
returns by regardless of amount
employees From only one employer in the Philippines for the
receiving purely calendar year
compensation The income tax of which has been correctly
income from only withheld by the employer (i.e., tax due =tax withheld)
one employer in the The Certificate of Withholding filed by the employers
Philippines duly stamped “RECEIVED” by the BIR shall be the
substituted filing by such employees.
Section 56 (A) (2) When tax due exceeds ₱2,000, the The new deadline of payment of
Installment taxpayer (other than a corporation) second installment is October 15
Payment of may elect to pay the tax in two equal following the close of the calendar
tax due for installments. Payment of installments: year. (TY 2018 onwards)
individuals and First installment –time of filing of
corporations return
Second installment – on or
before July 15 following
the close of the calendar year.
Section 62 There is allowed personal exemption The exemption for estates

Exemption for of ₱50,000 from the income of the and trusts is removed.
estates and trusts estate or trust.
Section 74 The amount of estimated The payment shall be made:
Declaration income with respect to which First – May 15
of estimated a declaration is required shall Second – August 15
income for be paid in four (4) Third – November 15
individuals installments: Fourth – on or before April
First – at time 15 of the following calendar
of declaration year when the final adjusted
Second – August 15 income tax return is due to
Third – November 15 be filed [Sec. 77(B)]
Fourth – on or before April
15 of the following
calendar year when the
final adjusted income tax
return is due to be filed.
33
Summary:IndividualTaxpayers–ResidentCitizen/Alien
Particulars Graduated IT Rates 8% IT Rates

Basis of IT net taxable income gross sales/
receipts and other
non- operating
income
Deductions Allowable itemized or OSD (40%) n/a
Business Tax PT/VAT Not subject to PT

Financial Statements 1. If Itemized: if qualified: No
FS if gross is less than 3M; FS required
Audited FS if gross is more
than
3M
2. If OSD: no FS required
Summary:IndividualTaxpayers–ResidentCitizen/Alien
34
Source of Graduated IT and 8%IT Rates Remarks
Income Rates /or
Basis of IT net taxable gross sales/receipts
income and other non-
operating income
a. Purely Yes n/a n/a No option

Compensation
b. Purely Yes OR Yes, if qualified: gross Option when sales/receipts and other income
Business/ sales/receipts and other did not exceed VAT threshold; if graduated IT
Practice of non- operating income rates –subject to applicable business tax/es;
Profession did not exceed ₱3M if 8% IT rate- taxable on amount in excess of
threshold ₱250Th and shall be in lieu of
graduated rates and PT under Sec. 116
35 Summary:IndividualTaxpayers–ResidentCitizen/Alien
and/
Source of Income Graduated IT Rates 8% IT Rates Remarks
or
c. Mixed Income
c1. compensation Yes n/a n/a No option
c2. business/ Yes or Yes, if qualified: Option available to taxpayers who
practice of gross sales/receipts did not exceed VAT threshold:
profession and other non- 1.if graduated IT rates – subject
operating income did to applicable business tax/es; or
not exceed ₱3M 2. if 8% IT rate- based on entire
threshold gross amount and the IT rate is in
lieu of graduated income tax rates
& PT-Sec. 116
Note: If both under Note: Total Income Tax For business/practice of

graduated IT rates – Due is the sum of the profession: in case of deductions
income tax due is Income tax due from under the graduated IT rate -
based on the sum of compensation
option to elect itemized or OSD to
both the taxable (graduated), and the
income tax due from compute the net taxable income
income from subject to income tax
business/practice of
compensation and
profession (8% of gross
W business/profession sales/receipts & other non-
T operating income)
Revenue Regulations No. 11-2018
on Withholding Tax
37
A. Professional fees, talent fees, etc. for

services rendered:
Sec. 2.57.2
Income
Payments • Individualpayee:
Subject to • Gross income of P3M and below –5%
Creditable • Gross income above P3M/VAT-registered TP - 10%
Withholding
Tax
• Non-IndividualPayee:
• Gross income P720,000 and below –10%
• Gross income above P720,000 –15%
38
Included under this section are payments previously

under the following subsections:
Sec. 2.57.2
Income
Payments
• Subsection B –professional fees, talent fees, etc. for services
Subject to
rendered by juridical persons
Creditable • Subsection G –payments to certain brokers and
Withholding agents
Tax • Subsection I –payment to medical practitioners
• Subsection O –Commissions of independent and/or
exclusive sales representatives
39
How will theWithholding Agent Determine theApplicable WT Rates

tobe Applied tothe Payee?
Sec. 2.57.2
Income • The individual payee shall execute a sworn declaration (Annex B-1 of the
Payments RR) and, together with a copy of COR, provide all income payors every
Subject to January 15 of each year, or prior to the initial income payment
Creditable
Withholding • Withholding agent shall likewise execute sworn statement
(Annex C of the RR) declaring the number of payees who have
Tax executed sworn declaration (Annex B-1, B-2, B-3 of the RR), and submit
the same not later than January 30 of each year or within fifteen (15) days
following the month when new recipient of income have submitted a sworn
declaration with a copy of COR
40
Sec. 2.57.2
What Shall be the Applicable
Income Withholding Tax Rates If the
Payments Individual Payee Did Not Submit Any
Subject to Sworn Declaration to the Payor?
Creditable
Withholding
Tax
• The withholding agent shall withhold the higher
rate of withholding TAX WHICH IS 10%
41
Section2.57.2IncomePaymentsSubjecttoCreditable WithholdingTax
NatureofIncomePayments (No Old New Rate

Change in Rate) SubSec Sub Sec
Rentals C B 5%
Income Payments to Certain Contractors E C 2%
Income Distribution to the Beneficiaries F D 15%
Income Payments to Partners of GPP H E 15%

Gross Selling Price or Total Amount of Consideration 1.5% /
or Its Equivalent Paid to the Seller/Owner for he Sale, 3% / 5%
Exchange or Transfer of Real Property Classified as J F / 6%
Ordinary Asset
42
NatureofIncome Payments (No Old New Rate

Change in Rate) Sub Sec Sub
Sec
Additional Income Payments to Government Personnel from
Importers, Shipping and Airline Companies, or their Agents K G 15%
Certain Income Payments Made by Credit Card 1% of

Companies L H ½ of
Gross
Income Payments Made by Top Withholding Agents M, W I 1% /
2%
Income Payments made by the Government N J 1% /
2%
Tolling Fees Paid by the Refineries P K 5%
43
NatureofIncomePayments (No Old New Rate

Change in Rate) Sub Sec Sub Sec
Payments Made by Pre-Need Companies to Q L 1%
Funeral Parlors
Payments Made to Embalmers R M 1%
Payments Made to Suppliers of Agricultural S N 1%
Products
Income Payments on Purchases of Minerals,
Mineral Products and Quarry Resources T O 1% / 5%
MERALCO Payments U P 10%

44
NatureofIncomePayments (No Old New

Change in Rate) Sub Sec Sub Sec Rate
Interest Income on the Refund Paid by Other Electric V Q 10% /

Distribution Utilities (DUs) 20%
Income Payments Made by Political Parties and
Candidates of Local and National Election X R 5%
Interest Income Derived from Any Other Debt Instruments

Not Within the Coverage of Deposit Substitutes Y S 20%
Income Payments to Real Estate Investment Trust (REIT) Z T 1%
Income Payments on Sugar AA U 1%

45
Amendments pertain to:

Sec. 2.57.3
Persons • Refusal of seller/payee to be subjected to withholding tax –may
Required be imposed penalties pursuant to Section 275 of the Tax Code
to Deduct (in addition to the conduct of audit)
and • Inclusion of provisions regarding non-withholding of tax from
Withhold individuals whose gross income in a year does not exceed
P250,000 from a lone payor subject to certain requirements
46
Requirements:
Sec. 2.57.3
Persons • Individual shall execute a sworn declaration of gross income
(with provided format-Annex B-2 of the RR);
Required
• The sworn declaration shall be submitted to the lone payor;
to Deduct • The lone payor shall likewise execute a sworn declaration
and (format also provided –Annex C of the RR) which shall be
Withhold submitted to the concerned BIR office, together with the list of
payees who shall not be subjected to withholding tax
47
Sec. 2.57.3 What if the individual did not submit the

Persons sworn declaration and a copy of COR
Required to the lone payor?
to Deduct
and
Withhold • The lone payor is required to withhold the
prescribed rate of withholding on the entire
payments made
48
Sec. 2.57.3 What if the income payments exceed

Persons P250,000 but the individual payee
Required submitted the sworn declaration?
to Deduct
and
Withhold • The lone payor is required to withhold the
prescribed rate of withholding only on the excess
over P250,000
49
Illustration1
Ms. Tina supplies special cupcakes on a regular basis to RPSV
Supermarket, a top withholding agent pursuant to Section 2.57.2 (I) of
these regulations. Prior to 2018, her annual sales to RPSV
Sec. 2.57.3 Supermarket never exceeded
Persons ₱250,000. She only bakes cupcakes upon order. RPSV
Required Supermarket is her lone payor of income; thus, she executed
the sworn declaration of gross receipts stating that her gross expected
to Deduct receipts shall not exceed ₱250,000 for the year from RPSV
and Supermarket. However, in the latter part of 2018, RPSV Supermarket
Withhold noted that its purchase of cupcakes shall exceed ₱250,000. As
expected, in 2018 the total purchase of cupcakes by RPSV
Supermarket from Ms. Tina amounted to ₱300,000.
Compute for the amount to be withheld.
50
Illustration1: Computation
Gross Receipts ₱ 300,000.00
Less: Amount not subject to withholding tax Income 250,000.00
subject to withholding tax ₱ 50,000.00
Multiply by EWT rate X 1%
Amount of withholding tax ₱ 500.00
*RPSV Supermarket is included as “Top Withholding Agent,” thus, the rate of

income tax withholding is 1% for the payments made to Ms. Tina, the supplier
of goods
51
A. National government agencies and instrumentalities, except GOCCs B. Persons
enjoying exemption from income tax, as follows:
Sec. 2.57.5
Exemption • Sale of real property by person engaged in social housing project where the SP does
not exceed the socialized housing price applicable to the area as prescribed by
from HLURB/HUDCC
Withholding • Corporations duly registered with the Board of Investments (BOI), Philippine
Export Processing Zones and Subic Bay Metropolitan Authority enjoying
of CWT exemption from income tax pursuant to E.O. 226;
• Corporations exempt from income tax under Section 30 of the Tax Code as amended
Withhold and GOCCs, namely: GSIS; SSS; PHIC and LWDs;
• GPPs;
• Joint Ventures or consortium formed for the purpose of undertaking construction
project…
• Individuals who earn P250,000 and below from a lone payor subject to compliance
with some requirements
52
Section2.58ReturnsandPaymentofTaxes Withheldat Source
Manual Not later than the last day of the

month following the close of the
quarter
But, withheldtaxes are requiredtobe remittednotlater

thanthe10thday following theclose of themonth(for the
firsttwo monthsof the quarter)
53
Not later than the last day of the month

eFPS followingtheclose ofthe quarter
But,withheldtaxesarerequiredtobe remittednot
laterthan the 15th day
followingtheclose ofthemonth(forthe firsttwo
monthsofthequarter)
54
Expanded • 0619-E BIR Form 1601-EQ

Withholding (first 2
Tax • • months)
• 0619-F BIR Form 1601-FQ

Final BIR Form 1602
(first 2
Withholding• • months)
BIR Form 1603
Tax
55
For Sale of Real Property Considered For Sale of Real

Capital Asset and Shares of Stock Not Property Considered
Traded Thru a Local Stock Exchange Ordinary Asset
▪ Due date is within thirty (30) days from the date of ▪ Due date is on or
transactions before the tenth (10TH)
▪ BIR Form to be used: day following the
▪ BIR Form 1706 – Sale of Real Property month of transaction
Considered Capital Asset
▪ BIR Form 1707 –Sale of Shares of Stocks Not
▪ BIR Form to be used:
Traded in Local Stock Exchange BIR FORM NO. 1606
56
Certificate/StatementofTax WithheldatSource
Expanded/Creditable • BIR Form 2307 (20 days from the close of

Withholding Tax the quarter or upon demand of the payee)
• BIR Form 2306 (20 days from the close of

Final Withholding Tax the quarter or upon demand of the payee)
57
AnnualInformation Return
Expanded • BIR Form1604-E (March 1)

Withholding Tax
Final Withholding
Tax • BIR Form1604-F (January 31)
59
Illustration2
Ms. Alona is employed in CSO Corporation. She received the
Sec. 2.78.1 SMW for 2018 in the total amount of
₱175,000, inclusive of the 13th month pay. In the same year,
Withholding
she also received overtime pay of
Tax on ₱40,000 and night-shift differential of ₱25,000. She also
Compensation received commission income from the same employer of
₱20,000, thus, total income received amounted to ₱260,000.
Compute for the withholding tax due.

60
The employer of Ms. Alona shall determine the nature of income payments. The amount to be subjected to income
tax withholding shall be computed as follows:
Total Income received ₱ 260,000.00
Less:Incomeexemptfrom tax
Basic SMW ₱175,000.00
OvertimePay 40,000.00
NightShift Differential 25,000.00
TotalExemptIncomeas MWE Taxable 240,000.00
Income- Commission ₱ 20,000.00
Tax Due:
On not overP250,000.00(₱20,000.00x 0%) ₱ 0.00
* Taxpayer’s income of SMW, overtime pay, and night shift differential pay are expressly exempt from income
tax under the law and consequently from withholding tax.
* Commission income from the same employer is taxable, however, under the graduated income tax rates
since it is less than ₱250,000, there is no tax due.
61
Illustration3
Ms. Cyril is employed in MAFD Corporation and is also a

Sec. 2.78.1
Withholding part-time real estate agent for a real estate broker. In addition to
Tax on the SMW of ₱180,000 she received from her employer, she
Compensation likewise received
₱75,000 as commissions from her real estate dealings for the
year 2018.
Compute for the tax due.

62
The amount subject to income tax and withholding tax shall be computed
depending on the income tax regime selected by Ms. Cyril, since she is
qualified to avail of such option (income from business/practice of profession
did not exceed ₱3,000,000) and such option was reflected in the payee’s
sworn declaration given by the taxpayer to the payor/withholding tax agent-real
estate broker, as follows:
63
1. Underthegraduateincometax(IT) regime: Total
Income received ₱ 255,000.00
Less: Income exempt from income tax –SMW 180,000.00
Taxable Income- Commission ₱ 75,000.00
▹Tax Due
▹On not over ₱250,000.00 (₱75,000.00 x 0%) ₱ 0.00
2. Underthe8% IT regime: Total

Income received ₱ 255,000.00
Less: Income exempt from income tax- SMW 180,000.00
Taxable Income- Commission ₱ 75,000.00
▹Tax Due
▹₱75,000.00 x 8% ₱ 6,000.00
66
WithholdingTax Table (To beuseduntilDec. 31, 2022)
REVISED WITHHOLDING TAX TABLE

Effective January 1, 2018 to December 31, 2022
DAILY 1 2 3 4 5 6
Compensation Range P 685 and below P685 – P1,095 P1,096 – P2,191 P2,192 – P5,478 P5,479 – P21,917 P21,918 and
above
Prescribed 0.00 P 82.19 P 356.16 P 1,342.47 P 6,602.74

Withholding 0.00 + 25% over P + 35% over
Tax 1,096 P21,918
+ 20% over P 685 + 30% over P2,192 + 32% over P 5,479
WEEKLY 1 2 3 4 5 6
Compensation Range P 4,808 and P 4,808 – P 7,691 P 7,692 – P15,384 P 15,385 – P 38,461 P 38,462 P 153,846 and
below – above
P153,84
5
Prescribed 0.00 P 576.92 P 2,500.00 P 9,423.08 P 46,346.15
Withholding 0.00 + 20% over P + 25% over P + 30% over P + 32% over P + 35% over P
Tax 4,808 7,692 15,385 38,462 153,846
SEMI-MONTHLY 1 2 3 4 5 6
Compensation Range P 10,417 and P 10,417 – P 16,667 – P P 33,333 – P 83,332 P 83,333 – P 333,333 and
below P16,666 33,332 P333,332 above
Prescribed 0.00 P 1,250.00 P 5,416.67 P 20,416.67 P 100,416.67

Withholding 0.00 + 20% over P + 25% over P + 30% over P + 32% over P + 35% over P
Tax 10,417 16,667 33,333 83,333 333,333
MONTHLY 1 2 3 4 5 6
Compensation Range W P 20,833 and P 20,833 – P P 33,333 – P P 66,667 – P P 166,667 – P 666,667 and
T below 33,332 66,666 166,666 P666,666 above
20,833 33,333 66,667 166,667 666,667
Prescribed 0.0 P 2,500.00 P 10,833.33 P 40,833.33 P 200,833.33
Withholding Tax 0.00
+ 20% over + 25% over + 30% over P66,667 + 32% over +35% over
67 WithholdingTax Rates (StartingJanuary 1, 2023)
Range of Taxable Tax Due = a + (b x c)

Income
Over Not Over Basic Amount Additiona Of
(a) l Rate Excess
(b) Over
(c)
- 250,000.00 - - -
250,000.00 400,000.00 - 15% 250,000.00
400,000.00 800,000.00 22,500.00 20% 400,000.00
800,000.00 2,000,000.00 105,000.00 25% 800,000.00
2,000,000.00 8,000,000.00 402,500.00 30% 2,000,000.00
8,000,000.00 - 2,202,500.00 35% 8,000,000.00

68
WithholdingTax Table (StartingJan. 1, 2023)
REVISED WITHHOLDING TAX TABLE
Effective January 1, 2023 and onwards
DAILY 1 2 3 4 5 6
Compensation P 685 and below P 685 – P 1,095 P 1,096 – P 2,191 P 2,192 – P 5,478 P 5,479 – P 21,917 P 21,918 and above
Range
Prescribed 0.00 0.00 P 61.65 P 280.85 P 1,102.60 P 6,034.00.30
Withholding + 20% over P
Tax + 15% over P 685 1,096 + 25% over P2,192 + 30% over P 5,479 + 35% over P 21,918
WEEKLY 1 2 3 4 5 6
Compensation P 4,808 and P 4,808 – P 7,691 P 7,692 – P P 15,385 – P P 38,462 – P 153,845 P 153,846 and above
Range below 15,384 38,461
Prescribed 0.00 0.00 P 432.60 P 1,971.20 P 7,740.45 P 42,355.65
Withholding + 15% over P + 20% over P + 25% over P + 35% over P
Tax 4,808 7,692 15,385 + 30% over P 38,462 153,846
SEMI-MONTHLY 1 2 3 4 5 6
Compensation P 10,417 and P 10,417 – P P 16,667 – P P 33,333 – P P 83,333 – P 333,332 P 333,333 and above
Range below 16,666 33,332 83,332
Prescribed 0.00 0.00 P 937.50 P 4,270.70 P 16,770.70 P 91,770.70
Withholding + 15% over P + 20% over P + 25% over P + 35% over P
Tax 10,417 16,667 33,333 + 30% over P 83,333 333,333
MONTHLY 1 2 3 4 5 6
Compensation P 20,833 and P 20,833 – P P 33,333 – P 66,667 – P P 166,667 – P666,666 P 666,667 and above
Range below 33,332 P66,666 166,666
Prescribed 0.00 0.00 P 1,875.00 P 8,541.80 P 33,541.80 P 183,541.80
Withholding & + 15% over P + 20% over P + 25% over P + 30% over P + 35% over P
Tax WT 20,833 33,333 66,667 166,667 666,667
77
Section2.80Liabilityfor Tax
Interest –There shall be assessed and collected on any unpaid amount of tax, interest
at the rate of double the legal interest rate for loans or forbearance of any money in the
absence of an express stipulation set by the Bangko Sentral ng Pilipinas from the date
prescribed for payment until the amount is fully paid. Provided, that in no case shall the
deficiency and the delinquency interest prescribed under Subsections (B) and (C) of
Section 249 of the Tax Code, be imposed simultaneously.
Deficiency Interest –Any deficiency in the tax due, as the term is defined in this Code,
shall be subject to the interest prescribed in Subsection (A) of Section 249 of the Tax
Code, which interest shall be assessed and collected from the date prescribed for its
payment until the full payment thereof, or upon issuance of a notice and demand by the
Commissioner of Internal Revenue, whichever comes earlier.
78
Section2.83.1EmployeesWithholdingStatement (BIR Form2316)
DUPLICATE
FOR THE BIR
EMPLOYER BIR FORM

SHALL ISSUE NOT 2316 TRIPLICATE
BIR FORM LATER ORIGINAL FOR THE
2316 TO THAN EMPLOYER
JANUARY COPY FOR (TO BE RETAINED
EMPLOYEES 31 THE FOR A PERIOD OF
EMPLOYEE 10 YEARS)
80
Section2.83.1EmployeesWithholdingStatement (BIR Form2316)
CERTIFIED
LIST OF
EMPLOYEES
DUPLICATE
QUALIFIED NOT LATER
COPIES OF FOR THAN
BIR FORM SUBSTITUTED FEBRUARY
28
BIR
2316 FILING OF
ANNUAL
INCOME TAX
RETURN (AITR)
81
Section2.83.4SubstitutedFilingofIncomeTax Returnsby
EmployeesReceivingPurely CompensationIncome
CERTIFIED LIST CONCERNED BIR OFFICE

OF SHALL STAMP
“RECEIVED” THE
EMPLOYEES CERTIFIED LIST OF
QUALIFIED FOR EMPLOYEES QUALIFIED
NOT LATER TO AVAIL OF THE
SUBSTITUTED THAN SUBSTITUTED FILING OF
FILING OF FEBRUARY 28 AITR, WHICH SHALL BE
ANNUAL TANTAMOUNT TO BIR
FORM 1700 (AITR) OF
INCOME TAX THE QUALIFIED
RETURN (AITR) EMPLOYEES
83
For individuals subject toexpanded withholding tax under Section
2.57.2 of RR No. 2-98, as amended, but availing tobe exemptfrom
thesaid withholding must satisfy the following:
Transitory
Provisions
A. The gross receipts/sales in a year must not exceed
P250,000;
B. The income of the said individual comes only from a lone
payor;
C. The individual must submit the “Sworn Declaration
of Gross Receipts/Sales” not later than April 20, 2018, to
his/her lone payor.
84
What the income payor should do in case of receipt from individual payees of
the “Sworn Declaration of Gross Receipts/Sales” ?
Transitory
Provisions 1. Execute Sworn Declaration and submit the same to the concerned
RDO, with the List of Payees who submitted the “Sworn Declaration
of Gross Receipts/Sales”;
2. Refund to the individual the excess tax withheld on
income payments made prior to the issuance of RR 11- 2018;
3. Issue the correct Certificate of Tax Withheld (BIR Form 2307); and
4. The list of payees who were refunded shall also be
attached to the 1st Quarterly Withholding Tax Return
Tax Rates If Graduated IT rates If 8% IT rate
Particulars Tax Taxability WT Taxability WT
Gross IT Taxable at 0% Not subject Exempt, if earnings from purely No, for purely
P250,000 business/practice of profession; business;
and below 8% if mixed income earner, based on
gross sales/receipts & other non- Yes, if
operating income mixed income
earner
BT PT/VAT Subject, if Not subject to PT Not subject
govt payor
Doc Payee’s Sworn Declaration Payee’s Sworn Declaration
Above IT Taxable at Subject at 8% on gross sales/receipts and other Subject to
250,000 to applicable grad applicable non-operating income; however, for applicable rate
3M r a t e s o n n e t rates purely business/practice – entitled to
income reduction of P250,000
BT PT/VAT Subject, if Not subject to PT Not subject
govt payor
Doc Payee’s Sworn Declaration Payee’s Sworn Declaration
Above IT Subject to subject Not entitled to avail
P3M applicable rate
BT VAT Subject WT of
W VAT, if
T
govt payor
86
SwornDeclarations
1. Annex A: Affidavit-Declaration that No Professional Fee Has Been
Charged by Medical Practitioner
2. Annex B-1: Income Payee’s Sworn Declaration of Gross
Receipts/Sales (For Self-Employed and/or Engaged in the Practice of Profession
with Several Income Payors)
Receipts/Sales (For Self-Employed and/or Engaged in the Practice of Profession
with Lone Income Payor)
Receipts/Sales (For Non-Individual Taxpayer with Several Income
Payors)
5. Annex C: Income Payor/Withholding Agent’s Sworn Declaration
6. Annex F: Certification
Revenue Regulations No. 13-
2018
on Value-Added
Tax
2
Reg u lations Im p lem en ting the

Va lu e -A d d e d Ta x P r o v is io n s
u
t hned eRre p u b l i c A c t ( R A ) No. 10963,
or th e “Ta x R e fo r m fo r
a n d AIcnccel ulesrai otio
n n(TRAIN),” Fu r t h e r
Amending Revenue Regulations
(RR) No. 1 6 - 2 0 0 5 ( C o n s o l i d a t e d
Va l u e - A d d e d Ta x R e g u l a t i o n s of
2005), as Amended.
Amendments to Revenue Regulations  
No. 16-2005
3
Sections
1. 4.106-5 - Zero Rated Sale of Goods or Properties
2. 4.108-3 - Definition and Specific Rules on Selected Services
3. 4.108-5 - Zero Rated Sale of Services
4. 4.109-1 - VAT-Exempt Transactions
5. 4.109-2- Exempt Transactions May be Registered for VAT Purposes
6. 4.110-3 - Claims for Input Tax on Depreciable Goods
7. 4.112-1 - Claims for Refund/Credit of Input Tax
8. 4.114-1 - Filing of Return and Payment of VAT
9. 4.114-2 - Withholding of VAT on Government Money Payments
and Payments to Non-Residents
10. 4.116 - Tax on Persons Exempt from Value-added Tax
4
(5) The sale of goods, supplies,

equipment and fuel to persons
S E C . 4.106-5.
Zero engaged in international shipping or
Rated international air transport operations:
Sales of Provided, That the goods, supplies,
Goods or
equipment, and fuel shall be used
Properties
exclusively for international shipping or air
transport operations.
5 Shall be subject to the twelve
percent VAT (12%):
(2)The sale of raw materials or packaging materials to a
S E C . 4.106-5.
non- resident buyer for delivery to a resident local export-
Zero
oriented enterprise to be used in manufacturing,
Rated processing, packing or repacking in the Philippines of the
Sales of said buyer's goods, paid for in acceptable foreign
Goods or currency, and accounted for in accordance with the rules
Properties and regulations of the B S P
(3)The sale of raw materials or packaging materials to an
export-oriented enterprise whose export s a l e s exceed
seventy percent (70%) of total annual production.
(4)Transactions considered export sales under Executive
Order No. 226, otherwise known a s the Omnibus
Code of 1987, and other special
Investments
laws.
6 Conditions for vatability:
1. The successful establishment and implementation of an
enhanced VAT refund system that grants and pays
S E C . 4.106-5.
refunds of creditable input tax within ninety (90) days
Zero
from the filing of the VAT refund application with the
Rated Bureau
Sales of
Goods or 2. The Secretary of Finance shall provide transitory rules for
Properties the grant of refund under the enhanced VAT Refund
System after the determination of the fulfilment of the
condition by the Commissioner of Internal Revenue
3. Department of Finance shall establish a VAT refund center
in the BIR and in the Bureau of Customs (BOC) that will
handle the processing and granting of cash
refunds of creditable input tax
7
(f) Sale of electricity by generation,

S E C . 4.108-3. transmission by any entity including the
Definitions National Grid Corporation of the
and
Specific Philippines (NGCP), and distribution
Rules on companies including electric
Selected cooperatives shall be subject to twelve
Services. percent (12%) VAT on their gross
receipts.
8
(4) Services rendered to persons engaged in
international shipping or air transport operations,
S E C . 4.108-5. including leases of property for use thereof:
Zero Provided, that these services shall be exclusively for
Rated international shipping or air transport operations.
Sale of Thus, the services referred to herein shall not
Services pertain to those made to common carriers by air
and s e a relative to their transport of passengers,
goods or cargoes from one place in the
Philippines to another place in the Philippines,
the s a m e being subject to twelve percent (12%)
VAT under Sec. 108 of the Tax Code.
9
(6) Transport of passengers and cargo by
domestic air or s e a vessels from the
S E C . 4.108-5. Philippines to a foreign country. Gross
Zero receipts of international air or shipping
Rated carriers doing business in the Philippines
Sale of derived from transport of passengers and
Services 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 a s provided for
in Sec. 118 of the Tax Code; and
10
Shall be subject to the
twelve percent (12%):
S E C . 4.108-5. (1) Processing, manufacturing or repacking goods for
Zero other persons doing business outside the Philippines,
Rated which goods are subsequently exported, where the
Sale of services are paid for in acceptable foreign currency
Services and
a ccounted for in a ccorda nce with the rules
a nd
regulations of the
BSP;
(5) Services performed by subcontractors and/or
contractors in processing, converting, or manufacturing
goods for an enterprise whose export sales exceed
seventy percent (70%) of the total annual production;
11
Conditions for vatability :
1. The successful establishment and implementation of an
S E C . 4.108-5. enhanced VAT refund system that grants and pays
Zero refunds of creditable input tax within ninety (90) days
from the filing of the VAT refund application with the
Rated
Bureau
Sale of
Services 2. The Secretary of Finance shall provide transitory rules
for the grant of refund under the enhanced VAT Refund
System after the determination of the fulfilment of the
condition by the Commissioner of Internal Revenue
3. Department of Finance shall establish a VAT refund
center in the BIR and in the Bureau of Customs (BOC)
that will handle the processing and granting of cash
refunds of creditable input tax
12 Exempt transactions
(d) Importation of professional instruments and implements,
tools of trade, occupation or employment, wearing apparel,
S E C . 4.109-1. domestic animals, and personal and household effects
VAT- E x e m p t belonging to:
Tra n s a c t io n 1. Persons coming to settle in the Philippines or
s 2. Filipinos or their families and descendants who are now
residents or citizens of other countries, such parties
hereinafter referred to as overseas Filipinos,
a. In quantities and of the class suitable to the profession,
rank or position of the persons importing said items;
b. For their own use;
c. Not for barter or sale; and
d. Accompanying such persons, or arriving within a
reasonable time:
13
Exempt transactions
Bureau of Customs may exempt such goods from payment of
duties and taxes subjectto:
S E C . 4.109-1.
VAT- E x e m p t 1. The production of satisfactory evidence that such persons
Tra n s a c t io n are actually coming to settle in the Philippines; and
s
2. That the goods are brought from their former place of

abode.
Vehicles, vessels, aircrafts, machineries and other similar

goods for use in manufacture, shall not fall within this
classification and shall therefore be subject to duties, taxes
and other charges;
14 (p) The following s a l e s of real properties are
exempt from VAT, namely:
S E C . 4.109-1. (1) Sale of real properties not primarily held for

VAT- E x e m p t sale to customers or held for lease in the
Tra n s a c t io n ordinary course of trade or business
s
(2) S a le of rea l properties utilized f or low-cost
housing a s defined by RA No. 7279,
otherwise
known a s the "Urb a n Developm ent
a nd
Housing Act of 1992" and other related
laws.
15 (p) The following s a l e s of real properties are
exempt from VAT, namely:
(3) Sale of real properties utilized for socialized housing
S E C . 4.109-1. a s defined under RA No. 7279, and other related laws,
VAT- E x e m p t such a s RA No. 7835 and RA No. 8763, wherein the
Tra n s a c t io n price ceiling per unit is P450,000.00 or a s may from
s time to time be determined by the HUDCC and the NEDA
and other related laws.
(4) Sale of residential lot valued at One Million Five

Hundred Thousand Pesos (P1,500,000.00) and below,
or house & lot and other residential dwellings valued at
Tw o Million Five Hundred Thousand P e s o s
(P2,500,000.00) and below, as adjusted in 2011 using the
2010 Consumer Price Index values.
▸
16
Beginning January 1, 2021, the VAT exemption shall
only apply to:
S E C . 4.109-1. 1. sale of real properties not primarily held for sale to

VAT- E x e m p t customers or held for lease in the ordinary course of
Tra n s a c t io n trade or business
s
2. Sale of real property utilized for socialized housing

as defined by Republic Act No. 7279,
3. Sale of house and lot, and other residential

dwellings with selling price of not more than Two
Million Pesos (P2,000,000.00)
17 (q) Lease of residential units with a monthly
rental per unit not exceeding Fifteen Thousand
Pesos (P15,000.00).
S E C . 4.109-1.
VAT- E x e m p t The foregoing notwithstanding, lease of
Tra n s a c t io n residential units where the monthly rental per unit
s exceeds Fifteen Thousand Pesos (P15,000.00), but
the aggregate of such rentals of the lessor
during the year do not exceed Three Million Pesos
(P3,000,000.00) shall likewise be exempt from VAT;
however, the s a m e shall be subject to three percent
(3%) percentage tax under Section 116 of the Tax
Code.
18 Illustration 1: A lessor rents his 15 residential units for
P14,500 per month. During the taxable year, his
accumulated gross receipts amounted to P2,610,000.
He is not subject to VAT since the monthly rent per
S E C . 4.109-1.
unit does not exceed P15,000. He is also not subject
VAT- E x e m p t
to 3% Percentage Tax.
Tra n s a c t io n
s
Using the same example, assuming he has 20
residential units with the same monthly rent per unit
and his accumulated gross receipts during the taxable
year amounted to P3,480,000, he is still not subject to
VAT even if the accumulated earnings exceeded
P3,000,000 since the monthly rent per unit does not
exceed P15,000. He is also not subject to
3% Percentage Tax.
Illustration 2: A lessor rents his 15 residential units for
19
P15,500 per month. During the taxable year, his
accumulated gross receipts amounted to P2,790,000.
He is not subject to VAT since his accumulated gross
S E C . 4.109-1. receipts did not exceed P3,000,000. He is, however,
VAT- E x e m p t subject to 3% Percentage Tax since the monthly rent per
Tra n s a c t io n unit is more than P15,000.00.
s
Using the same example, assuming he has 20

residential units with the same monthly rent per unit and
his accumulated gross receipts during the taxable year
amounted to P3,720,000, he is already subject to VAT
since the accumulated earnings exceeded P3,000,000
and the monthly rent per unit is more than
P15,000.00.
20
Illustration 3: A lessor rents his 2 commercial and 10
residential units for monthly rent of P60,000 and
P15,000 per unit, respectively. During the taxable year,
S E C . 4.109-1. his accumulated gross receipts amounted to
VAT- E x e m p t P3,240,000 (P1,440,000 from commercial units and
Tra n s a c t io n P1,800,000 from residential units). The P1,440,000
s from commercial units is not subject to VAT since it
did not exceed P3,000,000. It is, however, subject to
3% Percentage Tax. On the other hand, the
P1,800,000 accumulated receipts from the residential
units are not subject to Percentage Tax and exempt
from VAT since the monthly rent is not more than
P15,000.
21
Using the same example, assuming the lessor has 5
commercial units and his accumulated gross
S E C . 4.109-1. receipts during the taxable year amounted to
VAT- E x e m p t P5,400,000 (P3,600,000 from commercial units and
Tra n s a c t io n P1,800,000 from residential units), he is subject to
s VAT with respect to P3,600,000 since it exceeded
P3,000,000. The P1,800,000 accumulated receipts
from residential units are not subject to Percentage
Tax and exempt from VAT since the monthly rent is
not more than P15,000.
22 Illustration 4: A lessor rents his 5
commercial and 10 residential units for
monthly rent of P60,000 and P15,500 per
S E C . 4.109-1.
unit, respectively. During the taxable year,
VAT- E x e m p t
Tra n s a c t io n his accumulated gross receipts amounting
s to P5,460,0000 (P3,600,000 from
commercial units and P1,860,000 from
residential units) shall be subject to VAT
since it exceeded the P3,000,000
threshold and the monthly rent of
residential units is more than P15,000.
23
S E C . 4.109-1.
VAT- E x e m p t
Tra n s a c t io n
s (s) Transport of passengers by
international carriers;
24
(t) Sale, importation or lease of passenger or
cargo vessels and aircraft, including engine,
S E C . 4.109-1. equipment and spare parts thereof for
VAT- E x e m p t domestic or international transport
Tra n s a c t io n operations: Provided, however, that the
s exemption from VAT on the importation and
local purchase of passenger and/or cargo
vessels shall be subject to the
requirements on restriction on vessel
importation and mandatory vessel
retirement program of Maritime Industry
Authority (MARINA);
25
(u) Importation of fuel, goods and

S E C . 4.109-1. supplies by persons engaged in
VAT- E x e m p t
international shipping or air transport
Tra n s a c t io n
s operations: Provided, That the fuel,
goods and supplies shall be used for
international shipping or air transport
operations.
26
(w) Sale or lease of goods and services to

S E C . 4.109-1. senior citizens and persons with disabilities,
VAT- E x e m p t as provided under Republic Act Nos. 9994
Tra n s a c t io n
s (Expanded Senior Citizens Act of 2010) and
10754 (An Act Expanding the Benefits and
Privileges of Persons with Disability),
respectively;
27
S E C . 4.109-1.
VAT- E x e m p t
Tra n s a c t io n (x) Transfer of Property
s pursuant to Section 40(C)
(2) of the Tax Code, as
amended;
28
(y) Association dues, membership fees,

S E C . 4.109-1. and other assessments and charges
VAT- E x e m p t collected on a purely reimbursement basis
Tra n s a c t io n
s
by homeowners’ associations and
condominium corporations established
under Republic Act No. 9904 (Magna Carta
for Homeowners and Homeowners’
Association) and Republic Act No. 4726
(The Condominium Act), respectively;
29
S E C . 4.109-1.
VAT- E x e m p t
Tra n s a c t io n
s
(z) Sale of gold to the Bangko
Sentral ng Pilipinas;
30
S E C . 4.109-1. (aa) Sale of drugs and medicines

VAT- E x e m p t
Tra n s a c t io n
prescribed for diabetes, high
s cholesterol, and hypertension to
beginning January 1, 2019 as
determined by the Department of
Health; and
31
(bb) Sale or lease of goods or

S E C . 4.109-1.
VAT- E x e m p t
properties or the performance of
Tra n s a c t io n services other than the
s
transactions mentioned in the
preceding paragraphs, the
gross annual sales and/or
receipts do not exceed the
amount of Three Million Pesos
(P3,000,000.00).
WPM is a rice dealer. His total annual gross sales and/or receipts do
34 not exceed Three Million (P3,000,000.00), allowing him to avail the
following:
(a) WPM is a VAT-exempt taxpayer. He may elect to avail of the

S E C . 4.109- optional registration for VAT of exempt person under Section 236 (H)
Exempt of the 1997 Tax Code, as amended. Upon election of such option, he
Tra n s a c t io n s shall not be entitled to cancel his VAT registration for the next three
May be (3) years;
Registered
for VAT (b) WPM may elect to pay the 8% commuted tax rate on gross sales or
receipts and other non-operating income in lieu of the graduated
Purposes. income tax rates and the percentage tax under Section 24(A)(2)(b) of
the 1997 Tax Code, as amended, since his gross sales or receipts did
not exceed Three Million Pesos (P3,000,000) during the taxable year.
If he elects to pay the 8% commuted tax, he shall not be allowed to
avail of the optional registration for VAT of exempt person provided by
Section 236(H) of the 1997 Tax Code, as
amended.
35
(c) The amortization of the input VAT

S E C . 4.110-3. shall only be allowed until December
C l a i m s for 31, 2021 after which taxpayers with
I n p u t Ta x
on unutilized input VAT on capital
Depreciable goods purchased or imported shall
Goods.
be allowed to apply the same as
scheduled until fully utilized
Amanufacturer purchased capital goods on
36
different occasions as follows:
Month Amount 12% Input Usef No. of Last
S E C . 4.110-3. of (Php) Tax ul Monthly Month
Purchas Life Amortiz of
C l a i m s for
e a- tion Amortiz
I n p u t Ta x a- tion
on Jan 8,500,000.00 1,020,000.00 6 years 60 Decemb
Depreciable 2018 er 2022
Goods. Feb 8,500,000.00 1,020.000.00 4 years 48 Januar
2019 y
2022
Dec 10,000,000.0 1,200.000.00 5 years 60 Novemb
2021 0 er 2026
Jan 10,000,000.0 1,200.000.00 5 years - *Outrigh
2022 0 t claim
on
Jan.
2022
37
a. For purchase made on January 2018, the amortization shall
be for the shorter period of 5 years only or up to December
2022 although the useful life is 6 years.
S E C . 4.110-3.
C l a i m s for b. For purchase made on February 2018, the amortization shall
I n p u t Ta x be for period of 4 years only or up to January 2022 since the
on useful life of the asset is shorter than 5 years.
Depreciable
Goods. c. For purchase made on December 2021, the amortization
shall be for the period of 5 years or up to November 2026.
d. For purchase made on January 2022, no amortization shall

be made and the input VAT shall be claimed on the month of
purchase or January 2022.
38 (b) Cancellation of VAT registration
A VAT-registered person whose registration h a s

S E C . 4.112-1. been cancelled due to retirement from or
C l a i m s for cessation of business, or due to c h a n g e s in or
R e fu n d/ cessation of status under Sec. 106 (C) of the
C re d it o f Tax Code may, within two (2) years from the date
I n p u t Ta x of cancellation, apply for the issuance of tax
credit certificate for any unused input tax which
he ma y use in payment of his other internal
revenue taxes: Provided, however, that he shall be
entitled to a refund if he h a s no internal revenue
tax liabilities against which the tax credit
certificate m ay be utilized.
39
(b) Cancellation of VAT registration - Requirements
The date of cancellation being referred hereto is the

S E C . 4.112-1. date of issuance of tax clearance by the BIR, after full
C l a i m s for settlement of all tax liabilities relative to cessation of
R e fu n d/ business or change of status of the concerned
C re d it o f taxpayer: Provided, finally, that the filing of the claim
I n p u t Ta x shall be made only after completion of the mandatory
audit of all internal revenue tax liabilities covering the
immediately preceding year and the short period
return and the issuance of the applicable tax
clearance/s by the appropriate BIR Office which has
jurisdiction over the taxpayer.
40
(c)Where to file the claim for refund/credit
S E C . 4.112-1.
C l a i m s for
R e fu n d/
C re d it o f
I n p u t Ta x
Claims for refunds shall be filed with the appropriate Bureau of
Internal Revenue (BIR) Office (Large Taxpayers Service (LTS),
Revenue District Office (RDO) having jurisdiction over the principal
place of business of the taxpayer. Claims for input tax refund of direct
exporters shall be exclusively filed with the VAT Credit Audit Division
(VCAD).
41 (d) Period within which refund/credit of input taxes
shall be made
The Commissioner of Internal Revenue shall

S E C . 4.112-1.
C l a i m s for grant refund for creditable input taxes within
R e fu n d/ ninety (90) days from the date of:
C re d it o f
I n p u t Ta x submission of the official receipts or invoices and
other documents in support of the application filed in
accordance with subsections (A) and (B) hereof.
Should the Commissioner find that the grant of refund

is not proper, the Commissioner must state in writing
the legal and factual basis for the denial.
42
(d) Period within which refund/credit of input taxes
shall be made
S E C . 4.112-1. The 90-day period to process and decide, pending

C l a i m s for the establishment of the enhanced VAT Refund
R e fu n d/ System shall only be up to the date of approval of
C re d it o f the Recommendation Report on such application for
I n p u t Ta x VAT refund by the Commissioner or his duly
authorized representative: Provided, That all claims
for refund/tax credit certificate filed prior to January
1, 2018 will be governed by the one hundred twenty
(120)-day processing period.
43 (d) Period within which refund/credit of input taxes
shall be made
S E C . 4.112-1. In c a s e of full or partial denial of the claim for tax

C l a i m s for refund, the taxpayer affected may, within thirty (30)
R e fu n d/ days from the receipt of the decision denying the
C re d it o f claim, appeal the decision with the Court of Tax
I n p u t Ta x Appeals: Provided, however, that failure on the part
of any official, agent, or employee of the BIR to act
on the application within the ninety (90)- day period
shall be punishable under Section 269 of the Tax
Code, as amended.
44
(f) VAT RefundCenter

S E C . 4.112-1.
C l a i m s for The Department of Finance shall establish
R e fu n d/
a VAT refund center in the BIR and in the
C re d it o f
I n p u t Ta x Bureau of Customs (BOC) that will handle
the processing and granting of cash
refunds of creditable input tax.
45
(g) Automatic Appropriation
S E C . 4.112-1. An amount equivalent to five percent (5%) of the

C l a i m s for total VAT collection of the BIR and the BOC from
R e fu n d/ the immediately preceding year shall be
C re d it o f
automatically appropriated annually and shall be
I n p u t Ta x
treated as a special account in the general fund or
as trust receipts for the purpose of funding claims
for VAT refund: Provided, That any unused fund, at
the end of the year shall revert to the general fund.
46
(h) Quarterly Report
S E C . 4.112-1.
C l a i m s for
R e fu n d/
C re d it o f
I n p u t Ta x
The BIR and BOC shall be required to submit to the
Congressional Oversight Committee on the Comprehensive
Tax Reform Program (COCCTRP) a quarterly report of all
pending claims for refund and any unused fund.
Beginning January 1, 2023, the
47
filing and payment required under
the Tax Code shall be done within
SEC.4-114-1.
twenty-five (25) days following the
Filing of
Return
close of each taxable quarter.
and
Pa y m e n t
o f VAT.
48
Beginning January 1, 2021, the VAT withholding
system under this subsection shall shift from final
SEC.4-114-2. to a creditable system.
Withholding
o f VAT o n
Government Payments for purchase of goods and services
Money arising from projects funded by Official
Pa y m e n t s Development Assistance (ODA) as defined
and under Republic Act No. 8182, Otherwise known
Pa y m e n t s t o as the “Official Development AssistanceAct of
Non-
1996,” as amended, shall not be subject to the
Residents.
Final/Creditable Withholding Taxes
49 Any person whose sales or receipts are exempt under
Section 109 (1) (BB) of the Tax Code from the payment
of value-added tax and who is not a VAT-registered
SEC.4-116. person shall pay a tax equivalent to three percent (3%)
Ta x o n of his gross quarterly sales or receipts: Provided,
Pe r s o n s however, that the following shall be exempt from the
Exempt payment of three percent (3%) percentage tax:
f r o m Va l u e - 1. Cooperatives: and
a d d e d Ta x
( VAT ) 2.Self-employed individuals and professionals availing of
the 8% tax on gross sales and/or receipts and other non-
operating income, under Sections 24(A)(2)(b) and 24(A)(2)
(c)(2)(a) of the Tax Code, as amended..
50
In relation to Section 109(2), an existing VAT-

S E C T I O N 13. registered taxpayer whose gross sales/
T R A N S ITO R Y receipts in the preceding taxable year did not
PROVISIONS exceed the VAT threshold of P3,000,000.00
may continue to be VAT-registered taxpayer
and avail of the “Optional Registration for
Value-Added Tax of Exempt Person” provided
by Section 236(H).
Once availed, the taxpayer shall not be
entitled to cancel the VAT registration for the
next three
(3) years.
51
A VAT-registered taxpayer who opted to register a s
Non-VAT a s a result of the implementation of the
TRAIN Law, shall immediately:
S E C T I O N 13.
T R A N S ITO R Y
PROVISIONS 1. Submit a n inventory list of unused invoices
and/or receipts a s of the date of filing of
application for update of registration from VAT
to Non-VAT, indicating the number of booklets
and its corresponding serial numbers; and
2. Surrender the said invoices and/or receipts

for cancellation.
52
A number of unused invoices/receipts, a s
determined by the taxpayer with the approval of
S E C T I O N 13. the appropriate BIR Office, m ay be allowed for
T R A N S ITO R Y use, provided the phrase “Non-VAT registered as
PROVISIONS of (date of filing an application for update of
registration). Not valid for claim of input tax.” shall
be stamped on the face of each and every copy
thereof, until new registered non-VAT invoices or
receipts have been received by the taxpayer.
Upon such receipt, the taxpayer shall submit a
new inventory list of, and surrender for
cancellation, all unused previously-stamped
invoices/receipts.
These Regulations are
53
effective beginning January
1, 2018, the effectivity of the
S E C T I O N 6.
E F F E C T IV IT
TRAIN Law
Y
Briefing on R A
10963: Tax Reform for
Acceleration and
Inclusion (TRAIN) –
Transfer Taxes
2 The Law that Governs the Imposition
of Estate Tax
It is a well-settled rule that estate taxation is
governed by the statute in force at the time of
E s ta t death of the decedent. The estate tax accrues
e Ta x a s of the death of the decedent and the
accrual of the tax is distinct from the
obligation to pay the same. Upon the death of
the decedent, succession takes place and
the right of the State to tax the privilege to
transmit the estate vests instantly upon
death.
3
Rate of Estate Tax
The transfer of the net estate of

every decedent, whether resident
E s ta t or non- resident of the Philippines,
e Ta x a s determined in accordance with
the
NIRC, shall be subject to an estate
tax at the rate of six percent (6%).
4
What are included in gross estate?
For citizens/resident alien decedents:
1. Real or immovable
E s ta t property, wherever situated
e Ta x 2. Tangible personal property,
wherever situated
3. Intangible personal
property, wherever situated
5 What are included in gross estate?
For non-resident alien:
1. Real or immovable property situated
in the Philippines
E s ta t 2. Tangible personal property situated
e Ta x in the Philippines
3. Intangible personal property - with a
situs in the Philippines, subject to
the rule of reciprocity provided
under Section 104 of the NIRC
Estate Ta x
What will be used as basis in the valuation of property?

Real Properties:
1. The properties subject to Estate Tax shall be
appraised based on its Fair Market Value (FMV)
at the time of the decedent's death.
2. The appraised value of the real estate shall be
whichever is higher of the FMV, a s determined
by the Commissioner (zonal value) or the FMV,
a s shown in the schedule of values fixed by
the Provincial or City Assessor.
Estate
Ta x
Real Properties:
3. If there is no zonal value, the taxable base is
the FMV that appears in the tax declaration at
the time of death.
4. If there is an improvement, the value of
improvement i s the construction cost per
building permit or the fair market value per
latest tax declaration at the time of death
Estate
Ta x
Shares of Stocks:
Fair Market Value (FMV)

1. Unlisted in the stock exchanges
✏ common shares are valued based on
their book value
✏ preferred shares are valued at par
Estate Ta x

Shares of Stocks:

2. Listed in the stock exchange:
FMV shall be the arithmetic mean between the
highest and lowest quotation at a date nearest the
date of death, if none is available on the date of
death itself.
Estate Ta x

Shares of Stocks:

3. Unit of participation in any association, recreation or
amusement club (such as golf, polo, or similar
clubs):
FMV shall be the bid price nearest the date of
death published in any newspaper or publication
of general circulation.
11
What are excluded from gross estate?
✏ GSIS proceeds/ benefits
✏ Accruals from S S S
✏ Proceeds of life insurance where
E s ta t the beneficiary is irrevocably
e Ta x appointed
✏ Proceeds of life insurance under
a group insurance taken by
employer (not taken out upon his
life)
✏ War d a m a g e payments
✏ Transfer by way of bona fide sales
12 What are excluded from gross estate?
✏ Transfer of property to the National
G o v e r n m e n t or to a n y o f i t s
political subdivisions
E s ta t ✏ Separate property of the
e Ta x surviving spouse
✏ Merger of usufruct in the owner of
the naked title
✏ Properties held in trust by the
decedent
✏ Acquisition and/or transfer
expressly declared a s not taxable
Estate
Ta x
What are allowable deductions for Estate Tax Purposes?
For a citizen or resident alien
1. Standard deduction – A deduction in the amount of Five
Million P e s o s (P5,000,000.00) shall be allowed a s a n
additional deduction without need of substantiation.
2. Claims against the estate.
3. Claims of the deceased against insolvent persons
where the value of the decedent’s interest therein is
included in the value of the gross estate
Estate
Ta x
For a citizen or resident alien
4. Unpaid mortgages, taxes and casualty losses
5. Property previously taxed
6. Transfers for public use
7. The family home – FMV but not to exceed
P10,000,000.00
8. Amount received by heirs under Republic Act No. 4917
Net share of the surviving spouse in the conjugal partnership

or community property
Estate
Ta x
What are the allowable deductions for Estate Tax purposes?
For a non-resident alien
1. Standard deduction – P500,000.00
2. Proportion of the following deductions
✏ Claims against the estate.
✏ Claims of the deceased against insolvent persons
where the value of the decedent’s interest therein is
included in the value of the gross estate
✏ Unpaid mortgages, taxes and casualty losses
Estate Ta x
What are the allowable deductions for Estate Tax
purposes?
For a non-resident alien
3. Property previously taxed
4. Transfers for public use
Net s ha re of the s urviving s pous e in the

conjug a l partnership or community property
E s t a t e Ta x
Computation of Estate Tax – Citizen/Resident
Gross estate:
Conjugal Exclusive Total
✏ Real property
✏ Personal property
Less: Deductions:
✏ Standard deduction (P5 M)
✏ Claims against the estate – debt instrument was notarized; statement showing
disposition of proceeds of loan, if contracted within 3 years from date of death
✏ Claims of the deceased against insolvent persons
✏ Unpaid mortgages, taxes and casualty losses
✏ Properties previously taxed (vanishing deduction)
✏ Transfers for public use
✏ Family home (not to exceed P10 M)
✏ Amount received by heirs (RA 4917) amount is included in gross estate of decedent
✏ Share of the surviving spouse (50% of net conjugal estate)
Net Taxable Estate
✂ Estate tax (6%)
E s t a t e Ta x
Computation of Estate – Nonresident Alien
Gross estate: Conjugal Exclusive Total
✏ Real property
✏ Personal property
Less: Deductions:
✏ Standard deduction (P500 K)
✏ Proportion of the following:
a) Claims against the estate – debt instrument was notarized; statement showing
disposition of proceeds of loan, contracted within 3 years from date of death
b) Claims of the deceased against insolvent persons
c) Unpaid mortgages, taxes and casualty losses
✏ Properties previously taxed (vanishing deduction)
✏ Transfers for public use
✏ Share of the surviving spouse (50% of net conjugal estate)
Net Taxable Estate
19
When to file and pay?

File estate tax return and pay
E s ta t tax within one (1) year from
e Ta x date of death.
20 How about installment payments?
If case the available cash of the
estate is insufficient to pay the
total estate tax due, payment by
E s ta t
installment shall be allowed within
e Ta x
two (2) years from the statutory
date for its payment without civil
penalty and interest.
21
When is CPA certification required?

If gross estate exceeds P5
E s ta t million, attach to estate tax return
e Ta x a certified statement of assets
and itemized deductions.
Estate Ta x
Tax clearance is required before any transfer of shares m ay be
made in the name of new owners, however,
✏ If a bank h a s knowledge of the death of a person, who
maintained a bank deposit account alone, or jointly with
another, it shall allow any withdrawal from the said
deposit account, subject to a final withholding tax of six
percent (6%), without such certification from the CIR.
✏ The bank is required to withhold and remit the tax withheld
from the withdrawal of heirs from the decedent’s c a s h
deposit. A corresponding BIR Form No. 2306(Certificate of
Final Tax Withheld at Source) shall be issued to the heir/
administrator.
Estate Ta x
✏ The executor, administrator, or any of the legal heirs, withdrawing
from the deposit account shall provide the bank, where such
withdrawal shall be made, with the TIN of the estate of the
decedent. For this purpose, the bank shall require the
presentation of BIR Form No. 1904 of the estate, duly stamped
received by the BIR prior to such withdrawal.
✏ Further, all withdrawal slips shall contain the following terms
and conditions: (a) a sworn statement to the effect that all of
the joint depositors are still living at the time of withdrawal by
any one of the joint depositors; and, (b) a statement that the
withdrawal is subject to the final withholding tax of 6%.
Estate Ta x
Payment of the Estate Tax by Installment
In case of insufficiency of cash for the immediate
payment of the total estate tax due, the estate may
be allowed to pay the estate tax due through the
following options, including the corresponding
terms and conditions:
1. Cash installment
2. Partial disposition of estate and application of its
proceeds to the estate tax due
25
1. Cash Installment
✏The c a s h ins tallm ents s ha ll
be m ade within two (2)
E s ta t the
yea date of filing of the estate
rs from
e Ta x tax return
✏ The estate tax return shall be
filed within one year from the
date of decedent’s death.
26
1. Cash Installment
✏ The frequency (i.e., monthly, quarterly, semi-
annually or annually), deadline and amount
of each installment shall be indicated in
E s ta t the estate tax return, subject to the prior
approval by the BIR;
e Ta x ✏ In c a s e of lapse of two years without the
payment of the entire tax due, the remaining
balance thereof shall be due a n d
demandable
sub ject to the a pplica ble pen alties
a nd interes t reckoned f rom the
pres cribedfor filing the return and payment of
deadline
the estate tax.
27 2. Partial disposition of estate and application
of its proceedsto the estate tax due
✏ The disposition, for purposes of this

E s ta t option, shall refer to the conveyance
e Ta x of property, whether real, personal or
intangible property, with the
equivalent cash
✏ Theconsideration
es tate tax return s ha ll be
filedwithin one yea r from the da te of
decedent’s
death
✏ The written request for the partial disposition of

E s ta t estate shall be approved by the BIR. The said
request shall be filed, together with a notarized
e Ta x undertaking that the proceeds thereof shall be
exclusively used for the payment of the total
estate tax due
✏ The computed estate tax due shall be allocated
in proportion to the value of each property;
✏ The estate shall pay to the BIR the proportionate
estate tax due of the property intended to be
disposed of
✏ An electronic Certificate Authorizing

E s ta t Registration (eCAR) shall be issued upon
e Ta x presentation of the proof of payment of the
proportionate estate tax due of the property
intended to be disposed. Accordingly, eCARs
shall be issued a s many a s there are
properties intended to be disposed to cover
the total estate tax due, net of the
proportionate estate tax(es) previously paid
under this option; and
✏In case of failure to pay the total estate tax due

E s ta t out from the proceeds o f the s a i d
e Ta x disposition,
and demandable
immediately
the estate tax due shall be
due subject to the
pena lties a nd interes t reckoned from the
applicable
prescribed deadline for filing the return and
payment of the estate tax, without prejudice
of withholding the issuance of eCAR(s) on
the remaining properties until the payment
of the remaining balance of the estate tax
due, including the penalties and interest.
31
Illustrativeexample to properly
E s ta t s
e Ta x family
present home,
manner
standard
of deduction,
deducting
the
and other allowable deductions
from the gross estate in
accordance with the provisions of
the NIRC.
32 Illustrations :
1. Decedent is unmarried, family home more
than P10,000,000
2. Decedent is married, the family home is
E s ta t conjugal property, more than P10,000,000
3. Decedent is married, the family home
e Ta x exclusive property, more than P10,000,000
4. Decedent is a n unmarried, the family home is
below P10,000,000
5. Decedent is married, the family home is
conjugal property and is below 10,000,000
6. Decedent is married, the family home
exclusive property and below P10,000,000
33 Illustration No.
1
Decedent is unmarried, family home h a s
a FMV of P 30M . In
E s ta t a ddition
real and he ha s
personal properties other
amounting
e Ta x to P14M. Decedent h a s an unpaid
mortgage/unpaid taxes amounting to
P2M
Compute the taxable
estate.
Estate Ta x
Solution
Real and personal properties P 14,000,00
0
Family Home 30,000,00
0
Gross Estate P44,000,000
Less: Deductions
Ordinary Deductions 2,000,000
Special Deductions
0
Standard Deduction 5,000,000
Total Deductions (17,000,000)
NET TAXABLE ESTATE P27,000,000
35 Illustration No. 2
Decedent is m a rried, fa m ily hom e
which is conjug a l ha s a FMV
E s ta t of
conjugal P 30M ,other
properties are real and
e Ta x personal
properties amounting to P14M. In
addition,
he h a s an exclusive properties
amounting
to P 5M . Decedent ha s a n
unpa id mortgage/unpaid taxes
amounting to P2M
Compute the taxable
estate
S o lu tion
36
Exclusive Conjug al Total

Conjugal Properties:
E s ta t
Family Home P30,000,0
P30,000,000 00
Real and personal properties 14,000,000 14,000,0
e Ta x Exclusive Properties:
Gross Estate
5,000,000
5,000,000
00
5,000,0
44,000,000 Less: 00
Ordinary Deductions P49,000,000
Conjugal Ordinary Deductions (2,000,000)
Net Conjugal Estate 42,000,000
Special
Deductions (2,000,000)
Family Home
Standard
Deduction (10,000,000
)
Total Deductions (5,000,000
Net Estate )
Less: ½ Share of Surviving Spouse (17,000,000)
Conjugal Property 32,000,000
P44,000,000 Conjugal
Deductions (2,000,000) Net
Conjugal Estate
P 4 2 , 0 0 0 , 0 0 0
(P42,000,000/2)
NET TAXABLE ESTATE (21,000,000)
P11,000,000
Decedent is married, the estate

includes
E s ta t amounting
conjugal torealP14M
andand a family
personal home
propertie
e Ta x with FMV of P30M, which is exclusive.
s
Decedent h a s an unpaid mortgage/
unpaid taxes amounting to P2M
Compute the taxable

estate.
Exclusive Conjugal Total
40 Conjugal Properties
Exclusive properties
Family Home 30,000,000 30,000,000
Gross Estate 30,000,000 14,000,000 44,000,000
Less:
Solution Ordinary Deductions
Conjugal Ordinary Deductions
(2,000,000) (2,000,000)
Net Conjugal Estate
12,000,000
Special Deductions
Family Home
Standard Deduction (10,000,000)
(17,000,000)
Net Estate 27,000,000

Less: 1/2 Share of Surviving Spouse (6,000,000)
Conjugal Property P14,000,000
Conjugal Deductions (2,000,000)
(P12,000,000/2)
____________
NET TAXABLE ESTATE. P21,000,000
Decedent is unm a rried, hom e is
fa m ily In a ddition he ha s other real
P9M.
E s ta t personal properties amounting toand
e Ta x P14M.
Decedent h a s an unpaid mortgage/
unpaid taxes amounting to P2M
Compute the taxable

estate.
42
Real and P14,000,00
personal 0
properties
9,000,000
Family Home
Gross Estate P23,000,000
Solution Less: Deductions
Ordinary Deductions 2,000,000

Special Deductions 14,000,000
Standard Deduction 5,000,000
NET TAXABLE ESTATE P7,000,000

Decedent is married, family home which
is conjugal h a s a FMV of P9M, other
E s ta t conjugal properties are real and personal
properties amounting to P 1 4 M . In
e Ta x addition, he h a s exclusive properties
amounting to P5M. Decedent h a s an
unpaid mortgage/unpaid taxes
amounting to P2M
Compute the taxable estate.

Conjugal Properties
44
Family Home 9,000,000 9,000,000
Exclusive Properties 5,000,000
5,000,000
Gross Estate 5,000,000 23,000,000
Less: 28,000,000
Solution Ordinary Deductions
Conjugal Ordinary Deductions (2,000,000 (2,000,000)
)

Special Deductions
Family Home (4,500,000)
Total Deductions 11,500,000
NetConjugal
Estate Property P23,000,000 16,500,000
Less:
Conjugal Deductions Net ( Spouse
1/2 Share of Surviving 2,000,000) (10,500,000)
Conjugal Estate 21,000,000
(P21,000,000/2)
P6,000,000
NET TAXABLE ESTATE
Decedent is m a rried, the es ta te
includes conjug a l rea l a nd
E s ta t persona l properties
amounting to P14M and a family home
e Ta x with a FMV of P9M, which is exclusive.
Decedent h a s a n u n p a i d m o r t g a g e /
unpaid taxes amounting to P2M.
Compute the taxable

estate.
Conjugal Properties
46 Real and personal properties 14,000,000 14,000,000
Exclusive Properties
9,000,000
Gross Estate 14,000,000 23,000,000
9,000,000
Solution Less:
Ordinary Deductions
Conjugal Ordinary Deductions (2,000,000) (2,000,000)

Special Deductions
Family Home (9,000,000)
Total Deductions
Conjugal Property P14,000,000 16,000,000
Net Estate 7,000,000
Conjugal Deductions (2,000,000)
(P12,000,000/2)
Less Share of Surviving Spouse 6,000,000
NET TAXABLE ESTATE 1,000,000

E s t a t e Tax: S u m m a r y of
Changes RA 8424(OLD) RA 10963(TRAIN)
Rate Graduated 5%-20% on 6% based on the net value of the
the net value of the estate
estate
Deductions
Family Home 1M 10M
Standard - citizen/resident 1M 5M
- nonresident alien none 500K
Funeral Expenses 5% of Gross Estate > 200K none
Judicial Expenses allowed none
Medical Expense 500K none
Time of Filing 6 months from date of 1 year from date of death
death
Payment by Installments No provision 2 years in c a se of insufficient
c as h without civil penalty &
interest
CPA Certification 2M 5M
Withdrawal on none 6% Final Tax
deposits of decedent
Notice of Death Within 2 months repealed
48 The Law that Governs the Imposition
of Donor’s Tax
✏ The donor’s tax is not a property tax, but is a tax
imposed on the transfer of property by way of gift
D o n o r’ inter vivos. (Lladoc vs. Commissioner of Internal
s Ta x Revenue, L-19201, J u n e 16, 1965; 14 SCRA, 292)
✏ The donor’s tax shall not apply unless and until
there is a completed gift. The transfer of property
by gift is perfected from the moment the donor
knows of the a cc epta nce by the donee; it
is
com pleted by the delivery, either a ctua lly or
cons tructively, of the dona ted property to the
donee.
49
The Law that Governs the Imposition
of Donor’s Tax
D o n o r’ ✏ Thus , the la w in f orce a t the tim e of the

perfection/completion of the donation s ha l
s Ta x govern the imposition of the donor’s tax. l
50
Donations or gift with at lea s t

P250,000 worths will be impos ed
D o n o r’ a donor’s tax of 6% flat rate.
s Ta x This
will be imposed regardless of the
relationship between the donor
and the donee.
51 Exemption of Certain Gifts
Gifts Made by a Resident or by a Nonresident not a
Citizen of the Philippines
✏ Gifts made to or for the use of the National
D o n o r’ Government or any entity created by any of its
agencies which is not conducted for profit, or to
s Ta x any political subdivision of the s a i d
Government; and
✏ Gifts in favor of a n educational and/or
charitable, religious, cultural or social welfare
corporation,
institution, accredited nongovernment
organization, trust or philanthropic organization
or research institution or organization.
52 Illustration No.
1
Ms. MRU made the following donation
on:
D o n o r’ J a nua ry 30, 2018 – P 2,000,00
s Ta x M a rch 30, 2018 – 0
Aug us t 15, 2018 – 1,000,00
0
Compute the donor’s tax 500,00
due 0
Donor ’s Ta x
Solution
Date of donation Amount Donor’s Tax
J anuar y 30, 2018 P2,000,000
J anuar y 30, 2,000,000

2018donation
Less: Exempt Gift (250,000)
Net Gift
Rat 1,750,000
e 6%
Tax Due / Payable on J anuary P105,000
Donation
Donor ’s Ta x
Continuation….
Date of donation Amount Donor’s Tax

March 30, 2018 P1,000,00
0
March 30, 2018 donation 1,000,000
Add: January 2018 donation 2,000,000
Less: Exempt Gift
(250,000)
Total
Tax Due Thereon 2,750,000
165,000
Less:
Tax Tax due/paid on January
Rate 105,000
6%
donation Tax Due/Payable on the P 60,000
March donation
Donor ’s Ta x
Solution
Date of donation Amount Donor’s
August 15,2018 P500,000 Tax
August 15, 2018 donation 500,000
Add: January 2018 donation 2,000,000
March 2018 donation 1,000,000
Less: Exempt Gift
(250,000)
Total
3,250,000
Tax Rate 6%
Tax Due Thereon 195,00
0
Less: Tax due/paid on Jan/March 165,00
donation 0
Tax Due/Payable on the August P 30,000
donation
Donor ’s Tax: S u m m a r y of
Changes
RA 8424 (OLD) RA 10963(TRAIN)
Rate
Relative Graduated 2%-15% 6%
First P100,000 of net gift P250,000-Exempt
is exempt
2% on P100,001 to
P200,000
15% on amount over P10 M
Stranger 30% 6%
P250,000-Exempt
Exemption: Dowries
or gifts on account of allowed none
marriage of 10K
Tax Reform for Acceleration and
Inclusion (TRAIN) – Impact on
BIR Frontline Services
Impact of TRAIN on BIR Frontline
Services
R F P
REGISTRATION FILING PAY
Updates on BIR Submission of Payment of taxes
Registration required tax due/payable through
returns acceptable mode
3
Impact on BIR Frontline Services
1 Updates on Registration
• Self-employed/Professional/Mixed Income Earner may opt to
avail the 8% Income Tax Rate (ITR) and signify their intention to
elect the 8% ITR thru:
New Business Registrant Existing Individual Business Taxpayers

✏ BIR Form No. 1901 and/or ✏ Filing of BIR Form 1905 at the beginning
1701Q; or of the taxable year, or
✏ On the initial quarter return (BIR ✏ 1st Quarterly Percentage Tax Return;
Form No. 2551Q and/or 1701Q) and/or
of the taxable year after the ✏ 1st Quarterly Income Tax Return.
commencement of a new
business/practice of profession.
1 Update of Registration…
• VAT Taxpayers whose Gross Sales/Receipts do not
exceed the 3M VAT threshold in the Preceeding
Year may opt to register as Non-VAT Taxpayer on or
before April 30, 2018
• After April 30, 2018, VAT-taxpayers shall be
allowed and have the option to change their
status to Non-VAT if their Gross Sales/Receipts
have not exceeded the threshold for the
immediately preceeding 3 years
• Auto-registration of Form Types Nos.
o 1601EQ - Quarterly Remittance Return of Creditable
Income Taxes Withheld (Expanded);
o 1601FQ - Quarterly Remittance Return of Final

Income Taxes Withheld; and
o 2551Q – Quarterly Percentage Tax Return
• Concerned taxpayers do not need to visit their
respective Revenue District Office (RDO) to update
and replace their Certificate of Registration (COR).
Update of Registration…
1 Auto-registration of Form Types Nos. (Contd.)
• However, taxpayers of RR No. 8 – Makati and LTS [under the

(eTIS)] may opt to replace their CORs by visiting their
respective RDO/Large Taxpayer Division (LTD) starting May
16, 2018 to surrender their old CORs in order to reflect the
correct quarterly forms.
• These RDOs/LT offices under eTIS shall monitor and submit

the list of taxpayers who updated and replaced their CORs to
the office of the Assistant Commissioner, Information Systems
Project Management Service every 5th day of the following
month for monitoring purposes.
• Deadline of payee to his/her withholding agents
April 20, 2018 – submission of Income Payee’s
Sworn Declaration of Gross Receipts/Sales
together with COR
• Deadline of withholding agents to BIR
April 30, 2018 – submission of Income Payor/
Withholding Agent Sworn Declaration of Gross
Receipts/Sales together with list of payees
RR No. 14-2018
8
1 Update on Registration •
JOB ORDER – RMC No. 69-2017
1 Updates on Registration • JOB ORDER – RR 11-2018

10
2 Filing – Forms Simplification

Form No. Form Name Status
Income /Withholding Tax Forms
1. 1601-C Monthly Remittance Return of Income Taxes Withheld

on Compensation
2. 1601-EQ Quarterly Remittance Return of Creditable Income Taxes
Withheld (Expanded)
3. 1601-FQ Quarterly Remittance Return of Final Income
Taxes Withheld Approved
4. 1602Q Quarterly Remittance of Final Income Taxes Withheld on
Interest Paid on Deposits & Deposit Substitutes/Trusts, etc.
5. 1603Q Quarterly Remittance Return of Income Taxes Withheld
(on Fringe Benefits)
6. 1701Q Quarterly Income Tax Return (For Self-
Employed, Professionals, Estates, and Trusts)

• Availability of eBIRForms Package version 7.1
www.bir.gov.ph; www.knowyourtaxes.ph
Included in the new package:

✏ BIR Form No. 1601-EQ
✏ BIR Form No. 1601-FQ
✏ Updated ATCs and Tax
Rates in
BIR Form No. 2551Q
• Deadline for payment of 2nd Installment

of 2017 Annual Income Tax Return
July 15, 2018

TOBACCO 
REVISED RATES AND BASES OF EXCISE TAX ON TOBACCO PRODUCTS
TOBACCO PRODUCTS
R.A.10351 / RR 17-2012
2017 2018
(1) TOBACCO PRODUCTS, per kilo
a) Tobacco twisted by hand or reduced into a condition to be consumed in any
manner other than the ordinary mode of drying and curing; Php2.05 Php2.13
Effective
b) Tobacco prepared or partially prepared with or without the use of any machine January 1,
or instrument or without being pressed or sweetened; and Php2.05 2014, the Php2.13
tax rate
c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems, midribs and shall be
Php2.05 Php2.13
sweepings of tobacco increased
(2) CHEWING TOBACCO, per kilo Php1.75 by 4% every Php1.82
(3) CIGARS, per cigar year
AD VALOREM TAX equivalent to % of NRP/cigar and Specific Tax per cigar thereafter
AD VALOREM TAX 20% 20%
SPECIFIC TAX Php5.85 Php6.08
PETROLEUM 
RA No. 10963
PRODUCTS 2017 January 1, January 1, January 1,
2018 2019 2020
(a) Lubricating oils and greases, including but
not limited to basestock for lube oils and greases,
high vacuum distillates, aromatic extracts and
other similar preparations, and additives for
P4.50
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 P8.00 P9.00 P10.00
previously taxed but are subsequently
P4.50
reprocessed, rerefined or recycled, per liter and
kilogram of volume capacity or weight.
(b) Processed gas, per liter of volume capacity. P0.05
(c) Waxes and petrolatum per kilogram. P3.50
(d) Denatured alcohol to be used for motive
P0.05
power, per liter of volume capacity.
(e) Asphalts, per kilogram. P0.56
RA No. 10963
PRODUCTS 2017
January 1, January 1, January 1,
2018 2019 2020
(f) Naphtha, regular gasoline, and other

similar products of distillation, per liter of P4.35
volume capacity
P7.00 P9.00 P10.00
Pyrolysis gasoline -
(g) Unleaded premium gasoline, per liter of

P4.35
volume capacity
(h) Kerosene, per liter of volume capacity P0.00 P3.00 P4.00 P5.00
RA No. 10963
2018 2019 2020
(i) Aviation turbo jet fuel, per liter of volume capacity P3.67
Aviation gas - P4.00 P4.00 P4.00
(j) Kerosene, when used as aviation fuel, per liter of
P3.67
volume capacity
(k) Diesel fuel oil, and on similar fuel oils having more or
less the same generating power, per liter of volume P0.00
capacity
(l) Liquefied petroleum gas used for motive power, per
P0.00
kilogram P2.50 P4.50 P6.00
(m) Bunker fuel oil, and on similar oils having more or less
P0.00
the same generating power, per liter of volume capacity
(n) Petroleum coke, per metric ton -

RA No. 10963
2018 2019 2020
(o) Liquefied petroleum gas, per kilogram P0.00 P1.00 P2.00 P3.00
(p) Naphtha and pyrolysis gasoline, when used as a

raw material in the production of petrochemical
products or in the refining of petroleum products, or
as replacement fuel for natural-gas-fired-combined P0.00
cycle power plant, in lieu of locally-extracted natural
gas during the non-availability thereof, per liter of
volume capacity P0.00 P0.00 P0.00
(q) Liquefied petroleum gas, when used as raw

material in the production of petrochemical products, P0.00
per kilogram
(r) Petroleum coke, when used as feedstock to any
-
power generating facility, per metric ton
PETROLEUM
SUSPENSION OF SCHEDULED INCREASE. —
For the period covering 2018 to 2020, the scheduled increase

in the excise tax on fuel as imposed in this section shall be
suspended when the average Dubai crude oil based on Mean Of
Platts Singapore (MOPS) for three (3) months prior to the
scheduled increase of the month reaches or exceeds eighty
dollars (USD 80) per barrel. A separate Revenue Regulation
(RR) shall be issued for this purpose.
201
AUTOMOBILES 
AUTOMOBILES
o Automobile shall mean a four or more

wheeled motor vehicle regardless of seating
capacity, which is propelled by gasoline,
diesel, electricity or any other motive power;
o buses, trucks, cargo vans, jeepneys/jeepney
substitutes, single cab chassis, and special-
purpose vehicles shall not be considered as
automobiles
AUTOMOBILES
BASED ON THE NET MANUFACTURER’S PRICE/ IMPORTER’S SELLING PRICE
RR 25-2003 R.A. No. 10963
(RR 5-2018)
OVER UP TO RATE OVER UP TO RATE

0 P 600,000 2%
0 P 600,000 4%
P 12,000 + 20%
P600,000 P 1,100,000 in excess of P
600,000
P600,000 P 1,000,000 10%
P112,000+ 40%
P1,100,000 P2,100,000 in excess of
P1,100,000
P1,000,000 P4,000,000 20%
P512,000 +
P2,100,000 over 60% in excess
of P2,100,000 P4,000,000 50%
TAX-EXEMPT REMOVALS OF AUTOMOBILES
• PURELY ELECTRIC VEHICLES.

o HYBRID VEHICLES SHALL BE SUBJECT TO 50% OF THE APPLICABLE EXCISE
TAX RATES ON AUTOMOBILES.
o PRIOR TO THE REMOVAL OF THE AUTOMOBILES FROM THE MANUFACTURING
PLANT OR CUSTOMS CUSTODY, THE DOE SHALL DETERMINE WHETHER THE
AUTOMOBILES ARE HYBRID VEHICLES OR PURELY ELECTRIC VEHICLES, AND
INFORM THE BIR OF THE RESULTS OF SUCH EXAMINATION.
• PICK-UPS
Excise
Tax on
Non-
Essenti
al
Service
s
Invasive Cosmetic
Procedure
Surgery that is carried out by
entering the body through the
skin or through a body cavity or
anatomical opening, but with
the smallest damage possible to
these structures.
Invasive Cosmetic
Procedure
1. Liposuction
2. Mammoplasty
3. Breastlift
4. Buccal Fat Reduction
5. Buttocks Augmentation
6. Chin Augmentation
7. Facelift/Necklift
8. Thread Lift
Invasive Cosmetic
Procedure
9. Hair Restoration/Transplantation
10. Eyelid Surgery
11. Vaginal Plastic Surgery
12. Abdominoplasty or Tummy Tuck
13. Auto Grafting
14. Rhinoplasty/Alar Trimming
15. Otoplasty
  Conservative treatment that does
Non- not require incision into the body or
the removal of tissue, or when no
Invasive break in the skin is created and
Cosmetic there is no contact with mucosa, or
Procedur skin break, or internal body cavity
e beyond a natural or artificial body
orifice.
1. Acupuncture Rejuvenation Therapy
Non- 2. Air Dissector
3. Botulinum Toxin Injection/Treatment
Invasive 4. Collagen Induction Therapy
Cosmetic 5. Dermal Fillers (Crosslinked & Non-Crosslinked)
Procedure 6. Embedded Protein Threads
7. Non-surgical facelifting & skin tightening using
radio frequency, ultrasound, infrared
8. Fractional CO 2
Non- 9. Lasers and Light Treatments
Invasive 10.Body Treatments and Contouring
Cosmetic Procedures
Procedure 11.Cleanings and Facials
12.Peelings (Face and Body)
13.Injectables and Weight
Management Treatment
COVERAG Rate = five percent (5%)
Tax Base = Gross Receipts, net of
E,
excise tax and VAT
NATURE, Coverage = invasive cosmetic
BASIS AND procedures, surgeries and body
RATE OF enhancements directed solely towards
EXCISE improving, altering, or enhancing the
TAX  patient’s appearance and do not
meaningfully promote the proper
function of the body or prevent or treat
illness or disease.
Illustratio To improve her body shape, Starlet
n: S engaged the services of Dok
Salamat, a well-known cosmetic
surgeon in the country, to perform
a liposuction procedure on her
thighs, and Dok Salamat charged
Starlet S the amount of P50,000.00
inclusive of 12% VAT for the
services rendered.
Based on the foregoing, the 5% excise tax shall be computed, as follows:
Contract Price (inclusive of 12% VAT) (50,000/112%) P 50,000.00
Price (net of 12% VAT) (excise tax base) P

44,642.85
Add: 5% excise tax (44,642.85 x 5%)
2,232.15*
12% VAT (44,642.85 x 12%)
5,357.15
Total Amount to be Collected from Customer P
52,232.15
*Represents the excise tax to be withheld and remitted by the service
provider to the BIR
Sample Only DOK SALAMAT, M.D. “Annex B”
Rm. 000 St. Luke’s Hospital, E. Rodriguez Sr.,Q.C.
VAT Reg. TIN: 144-424-024-0000
In settlement of the following: OFFICIAL RECEIPT

Amount DATE January 1,
2018
Price (Net of 12% VAT) 44,642.85 Received from Starlet S with TIN_12304560789 and
Add: 5% Excise Tax 2,232.15 address at Quezon City the sum of __Fifty Two Thousand Two
Hundred Thirty Two and 15/100 pesos (P52,232.15) In partial/
12% VAT 5,357.15 full payment for liposuction procedure.
Total Amount Collected 52,232.15
By: Juana Dela Cruz
Cashier/ Authorized Representative
Form of Payment:
No. 1001
10 Bklts (3x) 1001-1500
BIR Authority to Print No. 3AU000805222
Date Issued 07-30-13: Valid until 07-29-2018 Printer’s Accreditation No. P08051200
BERTHA PRINTING SERVICES, INC. Date Issued 08-01-12
Bgy. 789, Quezon City
TIN: 123-456-789-0000
“THIS DOCUMENT IS VALID FOR CLAIM OF INPUT TAXES”
THIS OFFICIAL RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF ATP.
To improve her body shape, Starlet S engaged
the services of Dok Salamat, a well-known
cosmetic surgeon in the country, to perform a
Illustration: liposuction procedure on her thighs. Dok
Salamat’s clinic is located in ABC Hospital.
Starlet S was admitted to ABC Hospital for the
procedure. The hospital charged Starlet S the
amount of P70,000.00 inclusive of 12% VAT for
the service rendered. The professional fee
included in the contract price amounts to
P 20,000.00.
Based on the foregoing, the 5% excise tax shall be computed, as follows:
Billing by Hospital P 50,000.00

Doctor’s Fee 20,000.00
Total Price (inclusive of 12% VAT=70,000/112%) P 70,000.00
Price (net of 12% VAT) (excise tax base) P 62,500.00
Add: 5% excise tax (62,500.00 x 5%) 3,125.00*
12% VAT (62,500.00 x 12%) 7,500.00
Total Amount to be Collected from Customer P 73,125.00
*Represents the excise tax to be withheld and remitted by the service

provider to the BIR
SWEETENED BEVERAGES 
Section 150B 
 
SB Products SUBJECT to Excise Tax
Sweetened juice drinks;
Sweetened tea;
All carbonated beverages;
Flavored water;
Energy and sports drinks;
Other powdered drinks not classified as milk, juice, tea,
and coffee;
Cereal and grain beverages; and
Other non-alcoholic beverages that contain added sugar
SB Products NOT Subject to Excise Tax
a) All milk products
b) One Hundred Percent (100%) natural fruit juices
w/o added sugar/ caloric sweetener
c) One Hundred Percent (100%) natural vegetable
juices w/o added sugar/ caloric sweetener
d) Meal replacement and medically indicated
beverages for oral nutritional therapy
e) Ground, instant soluble and pre-packaged
powdered coffee products.
PERSONS LIABLE
a) Manufacturer
b) Owner or Possessor of
untaxed products
c) Importer
TAX RATES AND BASES
PRODUCT TAX RATE
(per Liter)
Using purely caloric sweeteners, and P6.00
purely non-caloric sweeteners, or a mix
of caloric and non-caloric sweeteners
Using purely high fructose corn syrup or P12.00
in combination with any caloric or non-
caloric sweetener
Using purely coconut sap sugar and Exempt
purely steviol glycosides
COMPUTATION OF EXCISE TAX
Number of Liters
EXCISE TAX DUE = X
(Specific Tax) Excise Tax Rate
ILLUSTRATION
1. Carbonated Beverages
Dulce Manufacturing Corp. will remove
100 cases of Super Cola using HFCS and
non-caloric sweetener from place of
production. Each case contains 6 bottles
of 1.5 liters each.
Compute for the excise tax.
Solution:
No. of Cases 100

Multiplied by no. of bottles per case x 6
Total no. of bottles 600
Multiplied by contents per bottle x 1.5L
Total Volume in Liters 900L
Multiplied by Specific Tax Rate x P12.00
Total Excise Tax Due P10,800.00
ILLUSTRATION
2. Powdered Juice
Sweety Import Corp. will remove from
customs custody 50 cases of Four Seasons
Juice using caloric and non-caloric sweetener
containing 144 packs by 25 grams. Each
25grams pack can make 1Liter.
Compute for the excise tax.
Solution:
No. of Cases 50
Multiplied by no. of packs per case x 144
Total no. of packs 7,200
Multiplied by consumable yield per pack x 1L
Total Volume in Liters 7,200L
Multiplied by Specific Tax Rate x P6.00
Total Excise Tax Due P43,200.00
PENALTIES
VIOLATION PENALTIES
Misdeclaration or summary cancellation or
misrepresentation of withdrawal of his permit
sworn statement
any of the acts or treble the aggregate
omissions in violation of amount of deficiency taxes,
the Act and surcharges and interest
implementing
Regulations
PENALTIES
VIOLATION PENALTIES
any of the acts or criminal liability and
omission prohibited penalty under Section 254
under the Act of the NIRC
willfully aids or abets in criminal liability as the
the commission of any principal;
such act or omission
If the offender is not a Deported immediately after
citizen of the Philippines serving the sentence
MINERALS 
R.A. No. 10963

PRODUCT TYPE 2017 January 1, January 1, January 1,
2018 2019 2020
On coal and coke,
P10.00 P50.00 P100.00 P150.00
per metric ton
MINERALS
PRODUCT TYPE 2017 R.A. No. 10963
On all non-metallic mineral and quarry resources
1. Locally extracted or
produced, based on actual 2% 4%
market value
2. In the case of importation
based on value used by Bureau
of Customs in determining tariff 2% 4%
and customs duties, net of excise
tax and VAT
3. Locally-extracted natural gas
P0.00 Exempt
and liquefied natural gas
MINERALS
PRODUCT TYPE 2017 R.A. No. 10963
On all metallic mineral and quarry resources
1. Locally extracted or produced, based on
actual market value
a) Copper and other metallic minerals 2% 4%
b) Gold and chromite 2% 4%
2. In the case of importation based on value
used by Bureau of Customs in determining tariff
and customs duties, net of excise tax and VAT
a) Copper and other metallic minerals 2% 4%
b) Gold and chromite 2% 4%
On indigenous petroleum, based on the fair
international market price thereof, on the first
3% 6%
taxable sale, barter, exchange or similar
transaction.
100% increase in rate, except for:
➢DST loans, from Php 1.00 to Php 1.50

per Php 200
➢No increase on sale of real property
and certain insurance policies
235
Corporations, companies,
SEC. 232.
Keeping of partnerships or persons whose
Books of gross quarterly annual sales,
Accounts. earnings, receipts or output
exceed One hundred fifty
thousand pesos (P150,000) P3M
shall have their books of accounts
audited and examined yearly by
independent Certified Public
Accountants
All persons subject to an internal revenue tax shall, for each
sale or transfer of merchandise or for services rendered
SEC. 237. valued at Twenty-five pesos (P25.00) P100 or more, issue
Issuance of duly registered receipts or sales or commercial invoices,
prepared at least in duplicate, showing the date of
Receipts or
transaction, quantity, unit cost and description of
Sales or merchandise or nature of service: Provided, however, That
Commercial where the receipt is issued to cover payment made as
rentals, commissions, compensations, fees, receipts or
Invoices. invoices shall be issued which shall show the name,
business style, if any, and address of the purchaser,
customer or client: Provided, further, That where the
purchaser is a VAT-registered person, in addition to the
information herein required, the invoice or receipt shall
further show the Taxpayer Identification Number (TIN) of the
purchaser.
Section
237-A • Within 5 years
Electronic
• BIR will require Electronic
Sales
Reporting
Sales Reporting for:
System ➢ Exporters
➢ Large taxpayers
SEC. 249. Interest. -
(A) In General. - There shall be assessed and collected on any unpaid

amount of tax, interest at the rate of twenty percent (20%) double the legal
interest rate for loans or forbearance of money in the absence of an express
stipulation as set by the BSP per annum, or such higher rate as may be
prescribed by rules and regulations, from the date prescribed for payment
until the amount is fully paid: Provided, That in no case shall the deficiency
and the delinquency interest prescribed under Subsections (B) and (C)
hereof, be imposed simultaneously.
(B) Deficiency Interest. - Any deficiency in the tax due, as the term is
defined in this Code, shall be subject to the interest prescribed in Subsection
(A) hereof, which interest shall be assessed and collected from the date
prescribed for its payment until the full payment thereof, or upon issuance of a
notice and demand by the CIR, whichever comes earlier.
241
SEC. 254. Attempt to Evade or Defeat Tax. - 
Any person who willfully attempts in any manner to evade or

defeat any tax imposed under this Code or the payment
thereof shall, in addition to other penalties provided by law,
upon conviction thereof, be punished by a fine not less than
Thirty thousand (P30,000) P500,000.00 but not more than One
hundred thousand pesos (P100,000) P10M and suffer
imprisonment of not less than two (2) 6 years but not more
than four (4) 10 years: Provided, That the conviction or
acquittal obtained under this Section shall not be a bar to the
filing of a civil suit for the collection of taxes.
242
Sec. 264. Failure or refusal to Issue Receipts or Sales or
Commercial Invoices, Violations related to the Printing of such
Receipts or Invoices and Other Violations. -
Fine: not less than P500,000.00 but

not more than P10,000,000.00, and
imprisonment of not less than 6 years
but not more than 10 years
243
244
245
246
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RA 10963

Tax Reform for Acceleration and

Over P70,000 but not P8,500 +20% of over

Over P2Million but not P490,000 +32% of the

• Taxed based on the graduated income tax rates

➢ Taxpayer shall be considered as having availed

➢ The option to be taxed at 8% income tax rate is NOT

➢ Automatically subject to the graduated rates even if

• The excess of the P250,000.00 over the actual taxable

Sec. 3 • option to be taxed under the graduated income tax

Thus, there may be an instance when a taxpayer files two (2)

• option to update their registration to non- VAT on or

Section 24 (B) Philippine Charity Philippine Charity Sweepstakes

Not over P100,000 –5%

Section 51 An individual whose gross Individual taxpayers whose taxable income

Section 51-A No provision Substituted filing of ITRs is available for individual

Section 62 There is allowed personal exemption The exemption for estates

Particulars Graduated IT Rates 8% IT Rates

Business Tax PT/VAT Not subject to PT

a. Purely Yes n/a n/a No option

Note: If both under Note: Total Income Tax For business/practice of

A. Professional fees, talent fees, etc. for

Included under this section are payments previously

How will theWithholding Agent Determine theApplicable WT Rates

NatureofIncomePayments (No Old New Rate

Income Payments to Partners of GPP H E 15%

NatureofIncome Payments (No Old New Rate

Certain Income Payments Made by Credit Card 1% of

NatureofIncomePayments (No Old New Rate

MERALCO Payments U P 10%

NatureofIncomePayments (No Old New

Interest Income on the Refund Paid by Other Electric V Q 10% /

Interest Income Derived from Any Other Debt Instruments

Income Payments to Real Estate Investment Trust (REIT) Z T 1%

Income Payments on Sugar AA U 1%

Amendments pertain to:

Sec. 2.57.3 What if the individual did not submit the

Sec. 2.57.3 What if the income payments exceed

*RPSV Supermarket is included as “Top Withholding Agent,” thus, the rate of

Manual Not later than the last day of the

But, withheldtaxes are requiredtobe remittednotlater

Not later than the last day of the month

Expanded • 0619-E BIR Form 1601-EQ

• 0619-F BIR Form 1601-FQ

For Sale of Real Property Considered For Sale of Real

Expanded/Creditable • BIR Form 2307 (20 days from the close of

• BIR Form 2306 (20 days from the close of

Expanded • BIR Form1604-E (March 1)

Compute for the withholding tax due.

Ms. Cyril is employed in MAFD Corporation and is also a

Compute for the tax due.

2. Underthe8% IT regime: Total

REVISED WITHHOLDING TAX TABLE

Prescribed 0.00 P 82.19 P 356.16 P 1,342.47 P 6,602.74

Prescribed 0.00 P 1,250.00 P 5,416.67 P 20,416.67 P 100,416.67

Range of Taxable Tax Due = a + (b x c)

800,000.00 2,000,000.00 105,000.00 25% 800,000.00

2,000,000.00 8,000,000.00 402,500.00 30% 2,000,000.00

8,000,000.00 - 2,202,500.00 35% 8,000,000.00

Section2.83.1EmployeesWithholdingStatement (BIR Form2316)

EMPLOYER BIR FORM

Section2.83.1EmployeesWithholdingStatement (BIR Form2316)

CERTIFIED LIST CONCERNED BIR OFFICE

RA 10963  