COMMUNITY TAX

COMMUNITY TAX
is a local tax levied by cities or municipalities as provided
under Sections 156 to 164 of the Local Government Code
(LGC).

is a poll or capitation tax, a tax of a fixed amount upon

all persons of a certain class
WHO ARE LIABLE?
Individuals
Every individual inhabitant of the Philippines eighteen (18)
years of age or over who:
1.has been regularly employed on a wage or salary basis for at
least 30 consecutive working days during any calendar year;
2.is engaged in business or occupation;
3.owns real property with an aggregate assessed value of 1,000
pesos or more; or
4.is required to file an income tax return
 Shall pay an annual community tax of five pesos (P5.00) and an annual
additional tax of one peso (P1.00) for every one thousand pesos
(P1,000) of income, which in no case shall exceed five thousand
pesos(P5,000). The source of income earned during the preceding year
may be from business, exercise of profession or pursuit of any
occupation, or real property.

Tax on individual Basic P5.00

Additional P1.00 per P1,000.00

income

Not to exceeed P5,000.00

ILLUSTRATION:
Sonny Taizer, single, is engaged in a trading
business in Cebu City. He had a monthly gross
receipts of P50,000 for taxable year 2007. His Looking for
ka-Duo!!!
community tax for 2008 is computed as follows:

Basic community Tax 5.00

Additional Community Tax
Gross Receipts (P50,000 x 12) 600,000.00
Divide by 1,000.00 600.00
Community Tax Due 605.00
In the case of husband and wife, each of them is liable to pay the basic tax five pesos
(P5.00). However, the additional tax to be imposed on the husband and wife shall be one peso (P1.00) for
every one thousand pesos (P1,000.00) of income from the total property owned by them and the total
gross receipts or earnings derived by them.

Illustration:
Mr. and Mrs. Labanuy are newly-weds residing in Cebu City. In 2019, Mr. Labanuy earned P125,000 a
month as a practicing lawyer while Mrs. Labanuy, P100,000, as a family physician. For the taxable
year 2020, the couple shall be liable for community tax as computed below:

Basic Basic
Mr. Tax Mrs. Tax Total Tax Due
Basic community Tax 5.00 5.00
Additional Community Tax
Gross Receipts 1,500,000 1,200,000 2,700,000
Divide by 1,000 2,700.00
Juridical Persons
Every corporation no matter how created or organized engaged in or doing business
in the Philippines shall pay an annual community tax of five hundred pesos
(P500.00) and an annual additional tax, which in no case shall exceed ten thousand
pesos (P10,000), according to the following schedule:
1. For every five thousand pesos (P5,000) worth of real property in the Philippines it
owned during the preceding year based on the valuation usedfor the payment of the
real property tax - two pesos (P2.00); and
2. For every five thousand pesos (P5,000) of gross receipts or earnings it derived
from business in the Philippines during the preceding year - two pesos (P2.00).

Tax on juridical persons Basic Community Tax P500.00

Additional Community Tax On Real Property P2.00 per P5,000.00

On Gross Receipts/Earnigs P2.00 per P5,000.00

Not to exceed P10,000.00

ILLUSTRATION:
Basic community Tax P500
Additional Community Tax
On real property:
Assessed Value P8,000,000
For the taxable year 2007, the following data
Divide by 5,000
pertain to El Cohel Corporation, a resident Multiply by 2 P 3,200
foreign corporation doing business in the On business
Philippines: Gross Receipts 24,000,000
Add: Dividends 1,300,000
Assessed Value*of Real Property in Ph P 8,000,000 Total 25,300,000
Monthly Gross Receipts from business 2,000,000 Divide by 5,000
Dividends from a Domestic Corporation 1,300,000 Multiply by 2 10,120
Total additional Community Tax 13,320
Additional Tax to be applied (Max limit) 10,000
*It is the valuation used for the payment of real property taxes. Total Community Tax Due P10,500
 EXEMPTION FROM
COMMUNITY TAX
The following are exempt from the community tax:
1) Diplomatic and consular representatives; and
2) Transient visitors when their stay in the Philippines does not
exceed three (3) months.

The following are exempt only for the current

taxable year:
1) Corporations established and organized on or after July 1;
2) Transient visitors whose stay in the Philippines is not more
than three (3) months;
3) Persons who, on or after July 1 -
a) come to reside in the Philippines, or
b) become eighteen (18) years of age
 TIME AND PLACE OF PAYMENT
The community tax shall accrue on the first day of January of each year
which shall be paid not later than the last day of February of each year.

If an individual reaches the age of 18 years or loses the benefit of exemption

on or before the last day of March, he shall have 20 days to pay the
community tax without being delinquent.

Corporations established and organized on or before the last day of March

shall have 20 days to pay the community tax without being delinquent.

The community tax due from an individual shall be paid in the city or
municipality where the individual resides; in the case of a corporation, in the
city or municipality where the principal office of thee corporation is situated.
PENALTY FOR DELINQUENCY
If the tax is not paid within the time prescribed, there shall be added to the
unpaid amount an interest of twenty-four percent (24%) per annum from the
due date until it is paid.

The total interest on the unpaid amount or portion thereof shall not exceed
thirty-six (36) months.

The prescriptive period for the collection of local taxes, community taxes
included, is five (5) years from the date of assessment by the administrative
or judicial action.
 PRESENTATION OF THE COMMUNITY TAX
CERTIFICATE
A community tax certificate shall be issued to every person or corporation upon payment of the
community tax. A community tax certificate may also be issued to any person or corporation not
subject to community tax upon payment of one peso (P1.00).
An individual subject to community tax is A corporation shall exhibit its community tax
required to present his community tax certificate when, through its authorized
certificate when he: officers, it:
acknowledges any document before a notary public; receives any license, certificate, or permit from any
takes the oath of office upon election or public authority;
appointment to any position in the government pays any tax or fee;
service;
receives any license, certificate, or permit from any receives money from public funds; or
public authority; transacts other official business
 pays any tax or fee;
receives any money from any public fund; The community tax certificate required to be presented shall be
transacts other official business; or the one issued for the current year, except for the period from
receives any salary or wage from any person or January until fifteenth (15th) of April, in which case, the previous
corporation year's certificate will suffice.
CORDAPIA, MARIA COMPUTATION:

Basic Community Tax P5.00

Additional Community Tax

Gross Receipts P20,000
Divide by 1,000 P20.00

Community Tax Due P25.00

COMPUTATION:

Basic Community Tax P 5.00

Additional Community Tax

Gross Receipts P240,000
Divide by 1,000 240.00
Interest (245x6%) 14.70
Community Tax Due P259.70
THANK YOU!