INCOME TAX

DETAILS CURRENT NATIONAL INTERNAL REVENUE R.A. No. 10963 (TRAIN)

CODE OF 1997, AS AMENDED

Rates for Individual Rates of Income Tax on Individual Citizen and

Citizen and Individual Individual Resident Alien of the Philippines. 
Resident Alien of the
Philippines The tax shall be computed in accordance with Tax Schedule Effective January 1, 2018 until
and at the rates established in the following December 31, 2022:
Section 24(A)(2) schedule:

5% Not Over P250,000 0%

Not over Over P250,000 but 20% of the excess
P10,000……………………… not over P400,000 over P250,000
Over P10,000 but not over P500+10% of Over P400,000 but P30,000 + 25% of the
P30,000…… the excess not over P800,000 excess over P400,000
over P10,000 Over P800,000 but P130,000 + 30% of the
Over P30,000 but not over P2,500+15% of Not over excess over P800,000
P70,000…… the excess P2,000,000
over P30,000
Over P2,000,000 P490,000 + 32% of the
Over P70,000 but not over P8,500+20% of
but not over excess over
P140,000… the excess
P8,000,000 P2,000,000
over P70,000 Over P8,000,000 P2,410,000 + 35% of
Over P140,000 but not over P22,500+25% the excess over
P250,000… of the excess P8,000,000
over P140,000
Over P250,000 but not over P50,000+30%
P500,000… of the excess
over P250,000
Over P500,000 P125,000+34%
…………………………… of the excess
over P500,000
in 1998.

Tax Schedule Effective January 1, 2023 and

onwards:

Not over P250,000 0%

Over P250,000 but 15% of the excess

not over P400,000 over P250,000
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
not over P2,000,000 the excess over
P800,000
Over P2,000,000 but P402,500 + 30% of
not over P8,000,000 the excess over
P2,000,000
Over P8,000,000 P2,202,500 + 35% of
the excess over
P8,000,000

Additional Provisions under Section 24 (A):

Self-employed individuals and/or professionals

shall have the option to avail of an eight percent
(8%) tax on gross sales or gross receipts and
other non-operating income in excess of Two
hundred fifty thousand pesos (P250,000) in lieu
of the graduated income tax rates under
Subsection (A)(2)(a) of this Section and the
percentage tax under Section 116 of this Code.

Taxpayers earning both compensation income

and income from business or practice of
profession shall be subject to the following taxes:

(1) All Income from Compensation – The

rates prescribed under Subsection (A)(2)
(a) of this Section.

(2) All Income from Business or Practice

of Profession

(a) If Total Gross Sales and/or Gross

Receipts and Other Non-operating
Income Do Not Exceed the VAT
Threshold as Provided in Section 109(BB)
of this Code:

The rates prescribed under Subsection

(A)(2)(a) of this Section on taxable
income, or eight percent (8%) income tax
based on gross sales or gross receipts
and other non-operating income in lieu of
the graduated income tax rates under
Subsection (A)(2)(a) of this Section and
the percentage tax under Section 116 of
this Code.

(b) If Total Gross Sales and/or Gross

Receipts and Other Non-operating
Income Exceeds the VAT Threshold as
Provided in Section 109(BB) of this Code:

The rates prescribed under Subsection

(A)(2)(a) of this Section.
Passive income from A final tax at the rate of twenty percent (20%) is
interest, royalties, hereby imposed upon: Other winnings (except
prizes and other Philippine Charity Sweepstakes and Lotto
winnings of individual winnings), derived from sources within the
citizen and resident Philippines: Provided, however, interest income
alien received by an individual taxpayer (except a
nonresident individual) from a depository bank
Sec. 24 (B)(1) under the expanded foreign currency deposit
system shall be subject to a final income tax at the
rate of seven and one-half percent (7 1/2%) of
such interest income.
A final tax at the rate of twenty percent (20%) is
now imposed upon Other winnings (except
winnings amounting to Ten thousand pesos
(P10,000) or less from Philippine Charity
Sweepstakes and Lotto which shall be exempt),
derived from sources within the
Philippines. Provided, however that interest
income received by an individual taxpayer
(except a nonresident individual) from a
depository bank under the expanded foreign
currency deposit system shall be subject to a
final income tax at the rate of fifteen percent
(15%) of such interest income.

Capital gains from sale Capital gains tax of 5% on the first P100,000 and Capital gains tax on sale of shares not traded in
of shares of stock not 10% in excess thereof is imposed on sale of the local stock exchange is increased to a flat
traded in the local stock shares not traded in the local stock exchange. rate of 15%.
exchange of individual
citizen and resident
alien

Sec. 24 (C)

Alien individuals and A rate of 15% final withholding tax on the gross
qualified Filipinos compensation income of alien individuals and
employed by specific qualified Filipinos employed by the following
employers employers: • Regional or area headquarters
(“RHQ”) and regional operating headquarters
Sec. 25 (F) (“ROHQ”) of multinational companies; • Offshore
banking units (“OBU”); and Petroleum service
contractors and subcontractors.
Preferential tax treatment shall not apply for
employees of ROHQ, RHQ, OBU, and Petroleum
service contractors and subcontractors which
registered with the Securities and Exchange
Commission beginning 1 January 2018.
Government owned or The Government Service Insurance System, the The Philippine Charity Sweepstakes Office
controlled corporations, Social Security System, the Philippine Health (PCSO) is removed from the exception.
agencies or Insurance Corporation, the local water districts
instrumentalities and the PCSO are exempt from corporate income
tax.
Sec. 27 (C)

Passive income on Interest income derived by a domestic corporation A final tax at the rate of fifteen percent (15%)
interest from deposits from a depository bank under the expanded shall be imposed.
and yield or any other foreign currency deposit system shall be subject
monetary benefit from to a final income tax at the rate of seven and one-
deposit substitutes, half percent (7 1/2%) of such interest income. 
trust funds and royalties

Sec. 27 (D) (1)

Taxable Income Defined The term taxable income means the pertinent
items of gross income specified in this Code, less
Sec. 31 the deductions and/or personal and additional
exemptions, if any, authorized for such types of
income by this Code or other special laws.
The term ‘taxable income’ means the pertinent
items of gross income specified in this Code, less
deductions, if any, authorized for such types of
income by this Code or other special laws.”
Personal and additional exemptions removed
from the definition of taxable income.

13th Month Pay and 13th month pay and other benefits amounting to Amount of exempt 13th month pay and other
Other Benefits P82,000 is excluded from the computation of benefits is increased to P90,000.
gross income.
Sec. 32 (B) (7) (e)
Fringe benefit tax given A final tax of thirty-two percent (32%) is hereby Effective January 1, 2018 and onwards, a final
to non-rank and file imposed on the grossed-up monetary value of tax of thirty-five percent (35%) shall be
employees fringe benefit. imposed.

Sec. 33 The grossed-up monetary value of the fringe
benefit shall be determined by dividing the actual
monetary value of the fringe benefit by sixty-eight
percent (68%).
The grossed-up monetary value of the fringe
benefit shall be determined by dividing the actual
monetary value of the fringe benefit by sixty-five
percent (65%) effective January 1, 2018 and
onwards.

Optional Standard In lieu of the itemized allowable deductions, an In case of a general professional partnership, the
Deduction individual subject to tax, other than a nonresident OSD may be availed only once by either the
alien, may elect an OSD of 40% of gross sales general professional partnership or the partners
Sec. 34 (L) or gross receipts. comprising such partnership.

Deduction of premium Allowed deduction of P2,400 per year or P200 per Repealed
payments on health month worth of premium payments on health
and/or hospitalization and/or hospitalization insurance of an individual
insurance provided that the family has a gross income not
exceeding P250,000 for the taxable year.
Sec. 34 (M)
On personal and Exemptions on the following: Repealed
additional exemptions • P50,000 worth of basic personal exemption
• P25,000 worth of additional exemption per
Sec. 35 qualified dependent not exceeding four.
• Personal exemption allowable to nonresident
alien individual

Exemption allowed to Exemption of P20,000 allowed from the income of Repealed

estate and trust the estate or trust.

Sec. 62

Income tax collected at Husband deemed head of the family and proper Repealed
source – husband and claimant of the additional exemption.
wife
Taxes to be withheld from the wages of the wife
must be in accordance with the table for zero
exemption of the withholding tax table.

Individual Return The following individuals shall not be required to
file an income tax return:
Sec. 51 (A)(2) An individual whose gross income does not
exceed his total personal and additional
exemptions for dependents under Section 35:
Provided, that a citizen of the Philippines and any
alien individual engaged in business or practice of
profession within the Philippine shall file an
income tax return, regardless of the amount of
gross income;  income tax return, regardless of the amount of
The following individuals shall not be required to
file an income tax return:
An individual whose taxable income does not
exceed Two hundred fifty thousand pesos
(P250,000) under Section24(A)(2)(a): Provided,
That a citizen of the Philippines and any alien
individual engaged in business or practice of
profession within the Philippines shall file an
 gross income.

Additional provisions under Section 51:

The income tax return (ITR) shall consist of a

maximum of four (4) pages in paper form or
electronic form, and shall only contain the
following information:

(A) Personal profile and information;

(B) Total gross sales, receipts or income from

compensation for services rendered, conduct of
trade or business or the exercise of a
profession, except income subject to final tax as
provided under this Code;

(C) Allowable deductions under

this Code;

(D) Taxable income as defined in

Section 31 of this Code; and

(E) Income tax due and payable.

Substituted Filing of No provision in NIRC Individual taxpayers receiving purely

Income Tax Returns by compensation income, regardless of amount,
Employees Receiving from only one employer in the Philippines for the
Purely Compensation calendar year, the income tax of which has been
Income withheld correctly by the said employer (tax due
equals tax withheld) shall not be required to file
Sec. 51 - A an annual income tax return. The certificate of

Corporation Returns The return shall be filed by the president, vice-
president or other principal officer, and shall be
Sec. 52 sworn to by such officer and by the treasurer or
assistant treasurer.
withholding filed by the respective employers,
duly stamped ‘received’ by the BIR, shall be
tantamount to the substituted filing of income tax
returns by said employees.
The income tax return shall consist of a
maximum of four (4) pages in paper form or
electronic form, be filed by the president, vice
president or other principal officer, shall be sworn
to by such officer and by the treasurer or
assistant treasurer, and shall only contain the
following information:
(1) Corporate profile and information;
(2) Gross sales, receipts or income from
services rendered, or conduct of trade
or business, except income subject to
final tax as provided under this Code;
(3) Allowable deductions under this Code;
(4) Taxable income as defined in Section
31 of this Code; and
(5) Income tax due and payable.
Provided, That the foregoing provisions
shall not affect the implementation of
Republic Act No. 10708 or TIMTA.
Payment and Installment of Payment. - When the tax due is in The second installment shall be paid on or
Assessment of Income excess of Two thousand pesos (P2,000), the before October 15 following the close of the
Tax for Individuals and taxpayer other than a corporation may elect to pay calendar year.
Corporation the tax in two (2) equal installments in which case,
the first installment shall be paid at the time the
Sec. 56 (A)(2) return is filed and the second installment, on or
before July 15 following the close of the calendar
year.

Withholding of Tax at The Secretary of Finance may, upon the Beginning January 1, 2019, the rate of
Source recommendation of the Commissioner, require the withholding shall not be less than one percent
withholding of a tax on the items of income (1%) but not more than fifteen percent (15%) of
Sec. 57 (B) payable to natural or juridical persons, residing in the income payment.
the Philippines, by payor-corporation/persons as
provided for by law, at the rate of not less than
one percent (1%) but not more than thirty-two
percent (32%) thereof, which shall be credited
against the income tax liability of the taxpayer for
the taxable year.

Returns and Payment of The return for final withholding tax shall be filed
Taxes Withheld at and the payment made within twenty-five (25)
Source days from the close of each calendar quarter,
while the return for creditable withholding taxes
Sec. 58 (A) shall be filed and the payment made not later than
the last day of the month following the close of the
quarter during which withholding was made.
The return for final and creditable withholding
taxes shall be filed and the payment made not
later than the last day of the month following
the close of the quarter during which
withholding was made.
Declaration of Income File a declaration of estimated income for the Instead of April 15, it is now on or before
Tax for Individuals current taxable year on or before April 15 of the May 15.
same taxable year.
Sec. 74 (A)
Amendments under Section 74(B): 

The fourth installment shall be paid on or before The fourth installment shall be paid on or before
April 15 of the following calendar year when the May 15 of the following calendar year when the
final adjusted income tax return is due to be filed.  final adjusted income tax return is due to be filed.

Income Tax Collected at (D) Personal Exemptions Repealed

Source
(F) Husband and Wife
Sec. 79
 ESTATE TAX

DETAILS CURRENT NATIONAL INTERNAL REVENUE CODE OF R.A. No. 10963 (TRAIN)
1997, AS AMENDED

Rates of Estate Tax If the net estate is: The tax rate is now six percent (6%)
Over But Not The Tax Plus Of the based on the value of such net estate.
Sec. 84 Over shall be Excess
Over
P 200,000 Exempt
P 200,000 550,000 0 5%  P 200,000

500,000 2,000,000 P 15,000 8%  500,000

2,000,000 5,000,000 135,000 11%  2,000,000

5,000,000 10,000,00 465,000 15%  5,000,000

0
10,000,00 And Over 1,215,00 20%  10,000,00
0 0 0

Computation of Net Deductions Allowed to the Estate of Citizen or a Resident. Deductions Allowed to the Estate of a
Estate Citizen or a Resident:
 Expenses, Losses, Indebtedness, and taxes. -
Sec. 86 Such amounts:  Standard Deduction of Five
million pesos (P5,000,000).
  The Family Home:
An amount equivalent to the
(a) For actual funeral expenses or in an amount equal to current fair market value of the
five percent (5%) of the gross estate, whichever is lower, decedent’s family home:
but in no case to exceed Two hundred thousand pesos
(P200,000);  Provided, however, That if the
said current fair market value
(b) For judicial expenses of the testamentary or intestate exceeds Ten million pesos
proceedings;  (P10,000,000), the excess shall
be subject to estate tax.
 The Family Home:
(B) Deductions Allowed to Nonresident
An amount equivalent to the current fair market value
Estates.
of the decedent's family home: Provided, however,
That if the said current fair market value exceeds One
million pesos (P1,000,000), the excess shall be  Standard Deduction of Five
subject to estate tax. As a sine qua non condition for hundred thousand pesos
the exemption or deduction, said family home must (P500,000)
have been the decedent's family home as certified by
the barangay captain of the locality.  Note:

*Actual Funeral Expense, Judicial

 Standard Deduction: expenses, and medical expenses are
no longer deductible.
An amount equivalent to One million pesos
(P1,000,000).

 Medical Expenses:

Medical Expenses incurred by the decedent within

one (1) year prior to his death which shall be duly
substantiated with receipts: Provided, That in no case
shall the deductible medical expenses exceed Five
Hundred Thousand Pesos (P500,000). 
 (A) Deductions Allowed to Nonresident Estates.

 Expenses, Losses, Indebtedness and Taxes

 Miscellaneous Provisions:

No deduction shall be allowed in the case of a

nonresident not a citizen of the Philippines, unless the
executor, administrator, or anyone of the heirs, as the
case may be, includes in the return required to be filed
under Section 90 the value at the time of his death of that
part of the gross estate of the nonresident not situated in
the Philippines.

Notice of Death to be In all cases of transfers subject to tax, or where, though Repealed
Filed exempt from tax, the gross value of the estate exceeds
Twenty thousand pesos (P20,000), the executor,
Sec. 89 administrator or any of the legal heirs, as the case may be,
within two (2) months after the decedent's death, or within a
like period after qualifying as such executor or administrator,
shall give a written notice thereof to the Commissioner.

Estate Tax Returns Requirements. - In all cases of transfers subject to the tax
imposed herein, or where, though exempt from tax, the gross
Sec. 90 value of the estate exceeds Two hundred thousand pesos
(P200,000), or regardless of the gross value of the estate,
where the said estate consists of registered or registrable
In all cases of transfers subject to the
tax imposed herein, or regardless of the
gross value of the estate, where the
said estate consists of registered or
registrable property shall file a return
 property such as real property, motor vehicle, shares of stock under oath in duplicate.
or other similar property for which a clearance from the
Bureau of Internal Revenue is required as a condition Estate tax returns showing a gross
precedent for the transfer of ownership thereof in the name of value exceeding Five million pesos
the transferee, the executor, or the administrator, or any of (P5,000,000) shall be supported with a
the legal heirs, as the case may be, shall file a return under statement duly certified to by a Certified
oath in duplicate, setting forth:  Public Accountant.

Time for Filing: For the purpose of

(3) Such part of such information as may at the time be determining the estate tax provided for
ascertainable and such supplemental data as may be in Section 84 of this Code, the estate
necessary to establish the correct taxes.  tax return required under the preceding
Subsection (A) shall be filed within one
Provided, however, That estate tax returns showing a gross (1) year from the decedent’s death.
value exceeding Two million pesos (P2,000,000) shall be
supported with a statement duly certified to by a Certified
Public Accountant containing the following:

Time for filing. - For the purpose of determining the estate

tax provided for in Section 84 of this Code, the estate tax
return required under the preceding Subsection (A) shall be
filed within six (6) months from the decedent's death. 

A certified copy of the schedule of partition and the order of

the court approving the same shall be furnished the
Commissioner within thirty (30) after the promulgation of such
order.

Payment of Tax No provision on Payment by Installment. Additional provision under Section

91:
Sec. 91
Payment by Installment:
In case the available cash of the estate
is insufficient to pay the total estate tax

Payment of Tax If a bank has knowledge of the death of a person, who
Antecedent to the maintained a bank deposit account alone, or jointly with
Transfer of Shares, another, it shall not allow any withdrawal from the said
Bonds or Rights deposit account, unless the Commissioner has certified that
the taxes imposed thereon by this Title have been paid:
Sec. 97 Provided, however, That the administrator of the estate or
any one (1) of the heirs of the decedent may, upon
authorization by the Commissioner, withdraw an amount not
exceeding Twenty thousand pesos (P20,000) without the said
certification.
due, payment by installment shall be
allowed within two (2) years from the
statutory date for its payment without
civil penalty and interest.
Amendments under Section 97:
If a bank has 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%).
 DONORS TAX

DETAILS CURRENT NATIONAL INTERNAL REVENUE CODE OF R.A. No. 10963 (TRAIN)
1997, AS AMENDED

Rates of Tax The tax for each calendar year shall be computed on the Amendments under Section 99:
Payable by basis of the total net gifts made during the calendar year in
Donor accordance with the following schedule:   The tax for each calendar year shall be
six percent (6%), regardless of the
Sec. 99 If the net gift is: relationship of donor and done,
computed on the basis of the total gifts
Over But Not The Tax Plu Of the in excess of Two hundred fifty thousand
Over shall be s Excess pesos (P250,000) exempt gift made
Over during the calendar year.
P 100,000 Exempt
P 100,000 200,000 0 2%  P100,000  Any contribution in cash or in kind to any
200,000 500,000 2,000 4%  200,000 candidate, political party or coalition of
500,000 1,000,000 14,000 6%  500,000 parties for campaign purposes shall be
1,000,000 3,000,000 44,000 8%  1,000,000 governed by the Election Code, as
amended.”
3,000,000 5,000,000 204,000 10%  3,000,000
5,000,000 10,000,00 404,000 12%  5,000,000
0
10,000,00 1,004,00 15%  10,000,00
0 0 0
 Tax Payable by Donor if Donee is a Stranger. - When the
donee or beneficiary is stranger, the tax payable by the
donor shall be thirty percent (30%) of the net gifts. For the
purpose of this tax, a 'stranger,' is a person who is not a: 

(1) Brother, sister (whether by whole or half-blood), spouse,

ancestor and lineal descendant; or 

(2) Relative by consanguinity in the collateral line within the

fourth degree of relationship.

Any contribution in cash or in kind to any candidate, political

party or coalition of parties for campaign purposes shall be
governed by the Election Code, as amended.

Transfer for Where property, other than real property referred to in
Less Than Section 24(D), is transferred for less than an adequate and
Adequate and full consideration in money or money's worth, then the
full amount by which the fair market value of the property
Consideration exceeded the value of the consideration shall, for the
purpose of the tax imposed by this Chapter, be deemed a
Sec. 100 gift, and shall be included in computing the amount of gifts
made during the calendar years
Additional Provision:
A sale, exchange, or other transfer of property
made in the ordinary course of business
(a transaction which is a bona fide, at arm’s
length, and free from any donative intent), will
be considered as made for an adequate and full
consideration in money or money’s worth.”

Exemption of
Certain Gifts The following gifts or donations shall be exempt from the tax Section 101 (A) (1) on dowries is removed.
Sec. 101 provided for in this Chapter:

(A) In the Case of Gifts Made by a Resident. - 

(1) Dowries or gifts made on account of marriage and

before its celebration or within one year thereafter by
parents to each of their legitimate, recognized natural, or
adopted children to the extent of the first Ten thousand
pesos (P10,000)
 VALUE-ADDED TAX
DETAILS CURRENT NATIONAL INTERNAL REVENUE CODE
OF 1997, AS AMENDED
Zero-rated sale Sec. 106 (A) (2) VAT zero-rating on sale of goods
of Goods classified as:
Sec. 106 (A)(2) a)  Export sales which include the following:
1 sale and actual shipment of goods from the
Philippines to a foreign country
2 sale of raw materials or packaging materials to a
nonresident buyer for delivery to a resident local
export-oriented enterprise;
3 sale of raw materials or packaging materials to
export- oriented enterprise whose export sales
exceed seventy percent (70%) of total annual
production;
4 sale of gold to the Bangko Sentral ng Pilipinas
(BSP);
5 those considered export sales under Executive
Order No. 226, otherwise known as the Omnibus
Investment Code of 1987, and other special laws;
R.A. No. 10963 (TRAIN)
Item A:
Item 4: Reclassified from to exempt transactions.
Items 2, 3, and 5: subject to 12% VAT upon:
(A) Successful establishment and
implementation ofan enhanced VAT refund
system that grants refundsof creditable
input tax within 90 days from filing of the
application with the BIR; and
(B) Full payment in cash by December 31,
2019 of all pending VAT refund claims as
of
31 December 2017.
Item 6: Sale of goods, supplies, equipment and
fuel shall qualify as export sales if used for
international shipping and air transport
 and
6 sale of goods, supplies, equipment and fuel to
personsengaged in international shipping or
international air transport operations.
b)  Foreign currency denominated sales; and
c)  Sales to persons or entities exempted under special
laws or international agreements
Scope of sale or Provision defines sale or exchange of services.
exchange of
services
Sec. 108 (A)
Zero-rated sales Zero-rated sales of services include:
of Services
Sec. 108 (B) 1. Processing, manufacturing or repacking goods
for other persons doing business outside the
Philippines which goods are subsequently
exported, where the services are paid for in
acceptable foreign currency and accounted for in
accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas (BSP);
2. Services rendered to persons or entities whose
exemption under special laws or international
agreements to which the Philippines is a
operations.
Item b: Removed from zero-rated sale of good.
.
Included in the definition of sale or exchange of
services are the ff.:
 sale of electricity by generation companies;
 transmission by any entity; and
 distribution companies, including electric
cooperatives.
Item 2: To qualify as a zero-rated sale, services
must be rendered to a person engaged in
business conducted outside the Philippines or
to a nonresident person not engaged in
business who is outside the Philippines when
the services are performed
Item 3: Now includes air transport operations.
Items 1 and 4: Subjected to 12% VAT upon
 signatory effectively subjects the supply of such
services to zero percent (0%) rate.
3. Services rendered to vessels engaged
exclusively in international shipping; and
4. Services performed by subcontractors and/or
contractors in processing, converting, of
manufacturing goods for an enterprise whose
export sales exceed seventy percent (70%) of
total annual production.
A. successful establishment and
implementation of an enhanced VAT refund
system that grants refunds of creditable
input tax within 90 days from filing of the
application with the BIR: and
B. Full payment in cash by
31 December 2019 of all pending VAT
refund claims as of 31 December 2017.

5. Transport of passengers and cargo by air or sea Item 5: Pertains only to domestic air or sea
vessels from the Philippines to a foreign country vessels

VAT Exemptions VAT exemptions include, among others, the following

transactions:
Sec. 109
1 Importation of professional instruments, etc. Item 1: Expansion of the importation exemption on
belonging to persons coming to settle in the professional instruments to include those belonging
Philippines, for their personal use, accompanying to overseas Filipinos, and their families and
such persons or arriving within 90 days before orafter descendants who are now residents or citizens
their arrival; of other countries accompanying such persons
or arriving within a reasonable time.
2 Sale of real property utilized for low- cost housing,
sale ofresidential lot valued at P1.5m (as adjusted by Item 2: VAT exemption limits on sale of real
Revenue Regulations (“RR”) No. 16-2011, properties not primarily held for sale:
P1,919,500) and sale of house and lot and other
residential dwellings valued at P2.5m (as adjusted by Residential lot: P1.5 million
RR No. 16-2011, P3,199,200);
House and Lot and
other residential dwellings: P2.5 million*
3 Lease of residential unit with monthly rental of
 P10,000 (as adjusted by RR No. 16-2011, P12,800);
Importation of fuel, goods, and supplies by persons
engaged in international shipping of air transport
operations; and
Other sale of lease of goods or properties or the
performanceof services, the amount of which does not
exceed P1.5m (as adjusted by RR No. 16-2011,
P1,919,500).
Creditable input Input tax on goods purchased or imported for use in
tax trade or business for which deduction for depreciation is
allowed shall be spread evenly over the month of
Sec. 110 acquisition and the 59 succeeding months if the
aggregate acquisition cost for such goods, excluding the
VAT component thereof, exceeds P1 million.
*Beginning January 1, 2021 VAT exemption limit
will be decreased to P2 million.
Item 3: The lease threshold is increased to
P15,000
Item 4: Exemption of the importation of fuel, goods
and supplies provided it will be used for
international shipping or air transport
operations.
Item 5: The VAT threshold is increased to P3M.
ADDITIONAL EXEMPTIONS:
 Sale or lease of goods and services to senior
citizens and persons with disabilities.
 Transfers of property pursuant to a plan of
merger or consolidation.
 Association dues, membership fees, and other
assessments and charges collectedby
homeowners associations and condominium
corporations.
 Sale of drugs and medicines prescribed for
diabetes, high cholesterol, and hypertensions
beginning January 1, 2019.
 Sale of gold to BSP.
The amortization of the input VAT shall only be
allowed until 31 December 2021 after which
taxpayers with unutilized input VAT on capital
goods purchased or imported shall be allowed to
apply the same as scheduled until fully utilized.
Period within The Commissioner shall grant a refund or issue the tax
which VAT credit certificate for creditable input taxes within 120
refund of input days from the date of submission of complete
taxes shall be documents.
made
In case of full or partial denial of the claim for tax refund
Sec. 112 (C) or tax credit, or the failure on the part of the
Commissioner to act on the application within the period
prescribed above, the taxpayer affected may, within 30
days from the receipt of the decision denying claim or
after the expiration of the 120 day period, appeal the
decision or the unacted claim with the Court of Tax
Appeals (CTA).
Every person liable to pay the VAT shall file a quarterly
VAT returns and return of his gross amount of his gross sales/receipts
payment within 25 days following the close of each taxable
quarter.
Sec. 114 (A)
Furthermore, VAT-registered persons shall pay VAT on
a monthly basis.
The Commissioner shall grant a refund for
creditable input taxes within 90 days from the
date of submission of the official receipts or
invoices and other documents in support of the
application led.
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.
In case of full or partial denial of claim for tax
refund, the taxpayer may within 30 days from
receipt of the decision denying the claim appeal the
decision with the CTA.
Penalty for failure on the part of any of official,
agent, or employee of the BIR to act on the
application within the 90-day period shall be
imposed.
Effective 1 January 2023, the filing and payment
of VAT shall be done within 25 days following the
close of each taxable quarter.
Withholding of The Government or any of its political subdivisions,
VAT instrumentalities or agencies shall, before making
payment of purchase of goods and services, deduct and
Sec. 114 (C) withhold a final VAT at the rate of 5% of the gross
payment thereof.
Payment for lease or use of properties or property rights
to nonresident owners shall be subject to 12%
withholding tax at the time of payment.
Beginning 1 January 2021, the VAT withholding
system shall shift from final to a creditable
system.
Payments for purchase of goods and services
arising from Official Development Assistance
funded projects shall not be subject to the final
withholding VAT.
 Percentage Tax

Disposition of There shall be levied, assessed, and collected on every The tax rate imposed is increased to 6/10 of 1%.
Shares of Stock sale, barter, exchange or disposition of shares of stock
Listed and listed and traded through local stock exchange other
Traded through than the sale by a dealer in securities, a tax rate of 1⁄2 of
Local Stock 1% of the gross selling price or gross value in money of
Exchange or the shares of stock.
through IPO

Sec. 127 (A)

Returns and The Commissioner may prescribe the time for filing the Repealed
Payment of return at intervals other than the time prescribed under
Percentage the NIRC as well as the manner and time of payment of
Taxes percentage taxes, including a scheme of tax prepayment
of other percentage taxes.
Sec. 128 (A) (3)9
 Effective
1 Jan. 2018 P32.5/ pack
1 July.
2018 P35/ pack
1 Jan. 2020 P37.5/ pack
1 Jan. 2022 P40/ pack
EXCISE TAX

DETAILS CURRENT NATIONAL INTERNAL REVENUE CODE R.A. No. 10963 (TRAIN)
OF 1997, AS AMENDED

Goods & Excise taxes apply to goods manufactured or Excise taxes apply to goods manufactured or produced
Services produced in the Philippines for domestic sales or in the Philippines for domestic sales or consumption or
Subject to consumption or for any other disposition and to things for any other disposition and to things imported as well
Excise Taxes imported. as services performed in the Philippines

Sec. 129

Excise tax on Excise tax on cigarettes packed by hand shall be Excise tax on cigarettes packed by hand and packed
cigars and based on the following schedule: by machines shall be based on the following schedule:
cigarettes
Effective
Sec. 145 1 Jan. 2013 P12/ pack
1 Jan. 2014 P15/ pack
1 Jan. 2015 P18/ pack
1 Jan. 2016 P21/ pack
1 Jan. 2017 P30/ pack

The rate of tax imposed shall be increased by 4% every

year effective on 1 January 2024, through revenue
regulations issued by the Secretary of Finance.
 Manufactures Oils and Extra Tax
other Fuels rates

Lubricating oils and P4.50 per

greases liter/kg
Processed gas 0.05 per liter
Waxes and petrolatum 3.50 per kg
Denatured alcohol 0.05 per liter
Naphtha, regular gasoline 4.35 per liter
Excise tax on cigarettes packed by machine shall be
and other similar products
of distillation based on the following schedule:
Leaded premium gasoline 5.35 per liter
 
Aviation turbo jet fuel 3.67 per literNet retail price
Kerosene Effective 0.00
P 11.5 below
per liter More than P 12
Diesel fuel oil 1 Jan. 0.00 per liter
Liquefied Petroleum gas 2013 P12/
0.00 perpack
liter P25/ pack
Asphalt 1 Jan. 0.56 per kg
Bunker fuel oil 2014 P15/
0.00 perpack
liter P27/ pack
1 Jan.
2015 P18/ pack P28/ pack
1 Jan.
2016 P21/ pack P29/ pack
1 Jan.
2017 P30/ pack P30/ pack

Manufacture Effective
On Sec 148 The following items have the corresponding d Oils and
manufactures excise tax rates: other Fuels
oils and other 01/01/18 01/01/19 01/01/20
fuels a.
Lubricating
Sec. 148 oils (per liter) P
P 9.00 P 10.00
and greases 8.00
(per kg)

b. Processed 8.00 9.00 10.00

gas (per liter)
c. Waxes and
petroleum 8.00 9.00 10.00
(per kg)
d. Denatured
alcohol (per 8.00 9.00 10.00
liter)

Manufacture Effective
d Oils and
other Fuels
e. Naphtha,
regular
gasoline,
pyrolysis
gasoline and 7.00 9.00 10.00
other similar
products of
distillation
(per liter)
f. Unleaded
premium
7.00 9.00 10.00
gasoline (per
liter)
g. Aviation
turbo jet fuel.
4.00 4.00 4.00
Aviation gas
(per liter)
h. Kerosene
3.00 4.00 5.00
(per liter)
i. Diesel fuel
2.50 4.50 6.00
oil (per liter)
j. Liquefied 1.00 2.00 3.00
Petroleum
Gas (per kg)
k. Asphalt 8.00 9.00 10.00
Net manufacturer’s price/ importer's
Rate
selling price
Not over P600 Thousand 4%
Over P600 Thousand to P1 million 10% (per kg)
l. Bunker fuel 2.50 4.50 6.00
oil (per liter)
Over P1 million to P4 million 20%
m. Petroleum 2.50 4.50 6.00
Over P4 million 50% coke (per
metric ton

The scheduled increase in the excise tax on fuel for

period covering 2018 to 2020 shall be suspended if the
average Dubai Crude Oil price based on Mean of Platts
Singapore (MOPS) for three months prior to the
scheduled increase reaches or exceeds USD80 per
barrel

Mandatory fuel No existing provisions Sec. 148 – A: The Secretary of Finance shall require
markings the use of an official fuel marking or similar technology
on petroleum products refined, manufactured or
Sec. 148 - A imported in the Philippines, and that are subject to the
payment of taxes and duties.

Excise tax on There shall be levied, assessed and collected an ad New schedule under RA10963:
automobiles valorem tax on automobiles based on the
manufacturer’s or importer’s selling price, net of Hybrid vehicles shall be subject to 50% of the
Sec. 149 excise and value-added taxes, in accordance with the applicable excise tax rates on automobiles. Purely
following schedule: electric vehicles and pick-ups shall be exempt from
excise tax on automobiles.
Net manufacturer’s price/
Rate
importer's selling price  Jeeps are considered automobiles.
Up to P600 Thousand 2%  Pick-ups are considered as trucks
not automobiles
 Over P600 Thousand to P1.1 P12,000 + 20% of
million value in excess of
P600 thousand

Over P1.1 Million to P112,000 + 40% of

P2.1 million value in excess of
P1.1 million
Over P2.1 Million P512,000 + 60% of
value in excess of
P2.1 million

Non-essential None Imposes a 5% tax on gross receipts, net of VAT and

services excise tax, derived from the performance of services on
invasive cosmetic procedures, surgeries, and body
Sec. 150 - A enhancements directed solely towards improving,
altering, or enhancing the patient’s appearance and do
not meaningfully promote the proper function of the
body or prevent or treat illness or disease.

The following procedures are exempt from the above

excise tax:

•Procedures necessary to ameliorate a

deformity arising from, or directly related to a congenital
or developmental defect or
abnormality, a personal injury resulting from an accident
or trauma, or disfiguring disease, tumor, virus or
infection;

•Cases or treatments covered by the National Health

Insurance Program.
Sweetened None Imposes a tax per liter of volume capacity
Beverages on sweetened beverages based on the following
schedule:
Sec. 150 - B
Using purely caloric sweetener, purely P6.00
non-caloric, sweetener, or mixture of per liter
both
Using purely high-fructose corn syrup P12.00
or in combination with any caloric or per liter
non-caloric sweetener
Using purely coconut sap sugar / Exempt
Purely steviol glycosides

The following products are excluded from excise

tax on sweetened beverages:
1. All milk products
2. 100% natural fruit juices
3. 100% natural vegetable juice
4. Meal replacement and medically indicated beverages
5. Ground coffee, instant soluble coffee, and pre-
packaged powdered coffee products

Mineral Taxes imposed on minerals, mineral products and Increased excise taxes on domestic or imported
Products quarry resources as follows: coal and coke, notwithstanding any incentives
granted in any law or special law, to wit:
Sec. 151 • Excise tax of P10/metric ton on coal and coke
• 2% of actual market value of the gross output of all
Effective P50/
1 Jan. 2018 metric ton
nonmetallic minerals and quarry resources
• Metallic minerals are subject to the following taxes:
P100/
1 Jan. 2019 metric-Copper
ton and other metallic
P150/ minerals at 1%/2%
1 Jan. 2020 metric-Gold
ton and chromite at 2%
• Indigenous petroleum is subject to 3% excise tax

• Excise tax on metallic and nonmetallic

minerals at 4%
• Indigenous petroleum at 6% excise tax

DETAILS
Original Issue of Shares of
Stock
Sec. 174
Sale, Agreement to Sell
Memoranda of Sale,
Deliveries or Transfer of
Shares or Certificates of
Stock
Sec. 175
Certificates or Interest in
Property or Accumulations
DOCUMENTARY STAMP TAX
CURRENT NATIONAL
INTERNAL REVENUE CODE
OF 1997, AS AMENDED
P1 on each P200, or fractional
part thereof
P0.75 on each P200 or
fractional part thereof
**No Par – 25% of the DST
paid upon the original
issuance of said stock
P0.50 on each P200, or
fractional part thereof
R.A. No. 10963 (TRAIN)
P2 on each P200, or fractional
part thereof
P1.50 on each P200, or
fractional part thereof
P1.00 on each P200, or
fractional part thereof
BASIS
Par Value of the shares of
stock;
No Par – Actual consideration
Stock Dividends – Actual value
represented by each share
Par Value of the shares of
stock;
No Par – 50% of the DST paid
upon the original issuance of
said stock
Face Value of such certificates
or memorandum
Sec. 177

Bank Checks, Drafts, P1.50 P3.00 On each bank check, draft, or

Certificates of deposit not certificate of deposit not
Bearing Interest, and Other drawing interest, or order for
Instruments the payment of any sum
Sec. 178 money drawn upon or issued

by any bank, trust company, or

any person or persons,
companies or corporations

All Debt Instruments P1 on each P200, or fractional P1.50 on each P200, or Issue Price of any such debt
part thereof fractional part thereof instruments
Sec. 179

All Bills of Exchange or P0.30 on each P200, or P0.60 on each P200, or Face Value of the bill of
Drafts fractional part thereof fractional part thereof exchange or draft

Sec. 180

Acceptance of Bills of P0.30 on each P200, or P0.60 on each P200, or Face Value of the bill of
Exchange and Others fractional part thereof fractional part thereof exchange or draft

Sec. 181

Foreign Bills of Exchange P0.30 on each P200, or P0.60 on each P200, or Face Value of the bill of
and Letters of Credit fractional part thereof fractional part thereof exchange or draft

Sec. 182
Life Insurance Policies 0 – P100,000 0 – P100,000 Amount of Insurance
Exempt Exempt
Sec. 183 P100,001 – P300,000 P10 P100,001 – P300,000 P20
P300,001 – P500,000 P25 P300,001 – P500,000 P50
P500,001 – P750,000 P50 P500,001 – P750,000 P100
P750,001 – P1,000,000 P75 P750,001 – P1,000,000 P150
Over P1,000,000 P100 Over P1,000,000 P200

Policies of Insurance upon P0.50 on each P4.00, or No change. Amount of Premium Charged
Property fractional part thereof

Sec. 184

Fidelity Bonds and Other P0.50 on each P4.00, or No change Amount of premium charged
Insurance Policies fractional part thereof

Sec. 185

Policies of Annuities P0.50 on each P200, or P1 on each P200, or fractional Premium or installment
fractional part thereof part thereof payment on contract price
Sec. 186 collected

Policies of Pre-Need Plans P0.20 on each P200, or P0.40 on each P200, or Premium or installment
fractional part thereof fractional part thereof payment on contract price
Sec. 186 collected
Indemnity Bonds P0.30 on each P200, or No change Premium charged
fractional part thereof
Sec. 187

Certificates P15 P30 On each certificate

Sec. 188

Warehouse Receipts P15 P30 On each warehouse receipt

Sec. 189 **No tax shall be collected on

each warehouse receipt
issued to any one person in
any one calendar month
covering property the value of
which does not exceed P200.

Jai-alai, Horse Race, Tickets,
Lotto or Other Authorized
Numbers Games
Sec. 190
P0.10
**If the cost of the ticket
exceed P1, an additional tax of
P0.10 on every P1, or
fractional part thereof, shall be
collected.
P0.20 On each Jai-alai, Horse Race,
Tickets, Lotto or Other
**If the cost of the ticket Authorized Numbers Games
exceed P1, an additional tax of
P0.20 on every P1, or
fractional part thereof, shall be
collected.
Bills of Lading or Receipts P101 – P1,000 P1.00 P101 – P1,000 P2.00 On each set of bills of lading or
Over P1,000 P10.00 Over P1,000 P20.00 receipts
Sec. 191

Proxies P15.00 P30.00 On each proxy

Sec. 192

Powers of Attorney P5.00 P10.00 On each power of attorney

Sec. 193

Lease and Other Hiring P3.00 for the first P2,000, or
Agreements fractional part thereof; and
additional P1.00 for every
Sec. 194 P1,000 in excess of the first
P2,000 for each year of the
term of said contract
P6 for the first P2,000, or On each lease, agreement,
fractional part thereof; and memorandum, or contract for
additional P2.00 for every hire
P1,000 in excess of the first
P2,000 for each year of the
term of said contract

Mortgages, Pledges and P0 – P5,000 P20.00 P0 – P5,000 P40.00 Amount secured

Deeds of Trust
On each P5,000, or fractional
Sec. 195 part thereof in excess of
P5,000 additional tax of
P10.00
On each P5,000, or fractional
part thereof in excess of
P5,000 additional tax of
P20.00
Deed of Sale, Conveyances Not exceed P1,00 P15.00 Not exceed P1,000 P15.00 Consideration contracted to be
and Donation of Real For each For each paid for such realty or on its
Property additional P1,000 P15.00 additional P1,000 P15.00 fair market value

Sec. 196 Transfers exempt from donor’s

tax under Sec. 101(a) and (b)
shall be exempt from tax
imposed under this Section.

Charter Parties and Similar  Does not exceed 1,000 tons,  Does not exceed 1,000 tons, Registered gross tonnage of
Instruments and the duration of the and the duration of the the ship, vessel or steamer
charter or contract does not charter or contract does not
Sec. 197 exceed 6 months – P500; exceed 6 months – P1,000;
and additional P50 for each and additional P100 for each
month or fraction thereof in month or fraction thereof in
excess of 6 months excess of 6 months
 Exceeds 1,000 tons but not  Exceeds 1,000 tons but not
more than 10,000 tons, and more than 10,000 tons, and
the duration of the charter or the duration of the charter or
contract does not exceed 6 contract does not exceed 6
months – P1,000; and months – P2,000; and
additional P100 for each additional P200 for each
month or fraction thereof in month or fraction thereof in
excess of 6 months excess of 6 months
 Exceeds 10,000 tons, and  Exceeds 10,000 tons, and
the duration of the charter or the duration of the charter or
contract does not exceed 6 contract does not exceed 6
months – +P1,500; and months – P3,000; and
additional P150 for each additional P300 for each
month or fraction thereof in month or fraction thereof in
excess of 6 months excess of 6 months
 DETAILS CURRENT NATIONAL INTERNAL REVENUE CODE R.A. No. 10963 (TRAIN)
OF 1997, AS AMENDED

Th
Power of the e Commissioner is authorized:  Additional Provision:
Commissioner
to Obtain (B) To Obtain on a regular basis from any person The Cooperative Development Authority shall submit
Information, other than the person whose internal revenue tax to the Bureau a tax incentive report, which shall
and to liability is subject to audit or investigation, or from any include information on the income tax, value-added
Summon, office or officer of the national and local governments, tax, and other tax incentives availed of by
Examine, and government agencies and instrumentalities, including cooperatives registered and enjoying incentives
Take Testimony the Bangko Sentral ng Pilipinas and government- under Republic Act No. 6938, as
of Persons owned or -controlled corporations, any information amended: Provided, further, That the information
such as, but not limited to, costs and volume of submitted by the Cooperative Development Authority
Sec. 5 (B) production, receipts or sales and gross incomes of to the Bureau shall be submitted to the Department
taxpayers, and the names, addresses, and financial of Finance and shall be included in the database
statements of corporations, mutual fund companies, created under Republic Act No. 10708, otherwise
insurance companies, regional operating headquarters known as ‘The Tax Incentives Management and
of multinational companies, joint accounts, Transparency Act (TIMTA)’.”
associations, joint ventures of consortia and registered
partnerships, and their members; 

Power of the (A) Examination of Returns and Determination of Additional Provision under Section 6 (A)
Commissioner
to Make The Commissioner or his duly authorized
Assessments Tax Due. representative has the authority notwithstanding any
and Prescribe law requiring the prior authorization of any
Additional After a return has been filed as required under the government agency or instrumentality.
Requirements provisions of this Code, the Commissioner or his
for Tax duly authorized representative may authorize the
Administration examination of any taxpayer and the assessment Additional Provisions under Section 6(E)
and of the correct amount of tax: Provided, however; The Commissioner is now mandated to have a
Enforcement That failure to file a return shall not prevent the consultation with competent appraisers both from
Commissioner from authorizing the examination of the private and public sectors, and with prior notice
Sec. 6 any taxpayer.  to affected taxpayers, determine the fair market
value of real properties located in each zone or area,

(E) Authority of the Commissioner to Prescribe The fair market value shall be subject to automatic
Real Property Values. adjustment once every three (3) years through rules
and regulations issued by the Secretary of Finance
The Commissioner is hereby authorized to divide based on the current Philippine valuation standards.
the Philippines into different zones or areas and
shall, upon consultation with competent appraisers No adjustment in zonal valuation shall be valid
both from the private and public sectors, determine unless published in a newspaper of general
the fair market value of real properties located in circulation in the province, city or municipality
each zone or area. For purposes of computing any concerned, or in the absence thereof, shall be
internal revenue tax, the value of the property shall posted in the provincial capitol, city or municipal hall
be, whichever is the higher of; and in two (2) other conspicuous public places
therein.
(1) the fair market value as determined by the
Commissioner, or (2) the fair market value as shown The basis of any valuation, including the records of
in the schedule of values of the Provincial and City consultations done, shall be public records open to
Assessors. the inquiry of any taxpayer.

Keeping of Corporations, Companies, Partnerships or Persons Corporations, companies, partnerships or persons

Books of Required to Keep Books of Accounts. - All whose gross annual sales, earnings, receipts
Accounts corporations, companies, partnerships or persons or output exceed Three million pesos
 required by law to pay internal revenue taxes shall (P3,000,000), shall have their books of
Sec. 232 keep a journal and a ledger or their equivalents: accounts audited and examined yearly by
Provided, however, That those whose quarterly sales, independent Certified Public Accountants and
earnings, receipts, or output do not exceed Fifty their· income tax returns.
thousand pesos (P50,000) shall keep and use
simplified set of bookkeeping records duly authorized
by the Secretary of Finance where in all transactions
and results of operations are shown and from which all
taxes due the Government may readily and accurately
be ascertained and determined any time of the year:
Provided, further, That corporations, companies,
partnerships or persons whose gross quarterly sales,
earnings, receipts or output exceed One hundred fifty
thousand pesos (P150,000) shall have their books of
accounts audited and examined yearly by independent
Certified Public Accountants and their income tax
returns accompanied with a duly accomplished
Account Information Form (AIF) which shall contain,
among others, information lifted from certified balance
sheets, profit and loss statements, schedules listing
income-producing properties and the corresponding
income therefrom and other relevant statements.”

Registration (A) Requirements. – xxx (1) Simplification of business registration and

Requirements tax compliance requirements of self-
xxx employed individuals and/or professionals
Sec. 236
The registration shall contain the taxpayer’s name, (2) Persons Required to Register for Value-
style, place of residence, business, and such other Added Tax
information as may be required by the Commissioner  Threshold increased to Three Million Pesos
in the form prescribed therefor. (P3,000,000)
xxx
(G) Persons Required to Register for Value-added (3) Optional Registration for Value-added Tax of
Tax. – Exempt persons
(1) xxx  Self-employed individuals and/or
professionals or Mixed Income Earners
(a) His gross sales or receipts for the past twelve (12) whose income does not exceed the VAT
months, other than those that are exempt under threshold and who elected to pay the eight
Section 109(A) to (U), have exceeded One Million percent (8%) tax on gross sales or receipts
Five Hundred Thousand Pesos (P1,500,000); or shall not be allowed to avail of this option.
(b) There are reasonable rounds to believe that his
gross sales or receipts for the next twelve (12)
months, other than those that are exempt under
Section 109(A) to (U), will exceed One Million Five
Hundred Thousand Pesos (P1,500,000).
xxx
(H) Optional Registration for Value-Added Tax of
Exempt Person.

(1) Any person is not required to register for value-

added tax under Subsection (G) may elect to
register for value-added tax by registering with the
Revenue District Office that has jurisdiction over the
head office of that person, and paying the annual
registration fee in Subsection (B) hereof.

(2) Any person who elects to register under this

Subsection shall not be entitled to cancel his
registration under Subsection (F)(2) for the next
three years.

For purposes of Title IV of this Code, any person who

has registered value-added tax as a tax type in
accordance with the provisions of Subsection (C)
hereof shall be referred to as a ‘VAT-registered
person’ who shall be assigned only one Taxpayer
Identification Number (TIN).
Issuance of All persons subject to an internal revenue tax shall, for (1) Threshold increased from P25 to P100
Receipts or each sale or transfer of merchandise or for services
Sales or rendered valued at Twenty-five pesos (P25.00) or (2) Issuance of Electronic Receipts or Sales or
Commercial more, issue duly registered receipts or sales or Commercial Invoices in lieu of Manual
Invoices commercial invoices, prepared at least in duplicate, Receipts
showing the date of transaction, quantity, unit cost and
Sec. 237 description of merchandise or nature of service: (a) Taxpayers engaged in the export of goods
Provided, however, That where the receipt is issued to and services;
cover payment made as rentals, commissions, (b) Taxpayers engaged in e-commerce; and
compensations, fees, receipts or invoices shall be (c) Taxpayers under the jurisdiction of the Large
issued which shall show the name, business style, if Taxpayers Service
any, and address of the purchaser, customer or client:
Provided, further, That where the purchaser is a VAT- Mandate:
registered person, in addition to the information herein (a) To be implemented within five (5) years
required, the invoice or receipt shall further show the from the effectivity of this Act;
Taxpayer Identification Number (TIN) of the (b) Upon establishment of a system capable of
purchaser. storing and processing the required data;
and
The original of each receipt or invoice shall be issued (c) Shall be subject to rules and regulations to
to the purchaser, customer or client at the time the be issued by the Secretary of Finance upon
transaction is effected, who, if engaged in business or recommendation of the Commissioner and
in the exercise of profession, shall keep and preserve after a public hearing shall have been held
the same in his place of business for a period of three for the purpose.
(3) years from the close of the taxable year in which
such invoice or receipt was issued, while the duplicate Taxpayers not covered by the mandate may issue
shall be kept and preserved by the issuer, also in his electronic receipts or, sales or commercial invoices,
place of business, for a like period. in lieu of manual receipts, and sales and commercial
 invoices.
The Commissioner may, in meritorious cases, exempt
any person subject to internal revenue tax from
compliance with the provisions of this Section.”

(3) Keeping and Preservation of Receipts and

Invoices
 In the place of business for a period of three
(3) years from the close of the taxable year in
which the invoice or receipt was issued;

 Includes digital records for electronic receipts

or sales or commercial invoices;

 Original – To be kept by the purchaser,

customer, or client;

Duplicate – Kept by the Issuer.

Electronic No provision in the Tax Code A new section is added as follows:

Sales
Reporting “Sec. 237-A. Electronic Sales Reporting System. –
System Within five (5) years from the effectivity of this Act
and upon the establishment of a system capable of
storing and processing the required data, the Bureau
shall require taxpayers engaged in the export of
goods and services,, and taxpayers under the
jurisdiction of the Large Taxpayers Service to
electronically report their sales data to the Bureau
through the use of electronic point of sales systems,
subject to rules and regulations to be issued by the

Interest (A) In General. – There shall be assessed and
collected on any unpaid amount of tax, interest at
Sec. 249 the rate of twenty percent (20%) 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.
(B) Deficiency Interest. – Any deficiency in the tax due, (2) In no case shall the deficiency and the
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.
Secretary of Finance as recommended by the
Commissioner of Internal Revenue: Provided, That
the machines, fiscal devices, and fiscal memory
devices shall be at the expense of the taxpayers.
The data processing of sales and purchase data
shall also comply with the provisions of Republic Act
No. 10173, otherwise known as the “Data Privacy
Act” and Section 270 of the NIRC, as amended, on
unlawful divulgence of taxpayer information and
such other laws relating to the confidentiality of
information.
The Bureau shall also establish policies, risk
management approaches, actions, trainings, and
technologies to protect the cyber environment,
organization, and data in compliance with Republic
Act No. 10175 or the “Cybercrime Prevention Act of
2012.”
(1) Interest Rate
 Double the legal interest rate for loans or
forbearance of any money in the absence of
an express stipulation as set by the BSp from
the date prescribed for payment until the
amount is fully paid.
delinquency interest prescribed under
Subsections (B) and (C) hereof, be imposed
simultaneously.
(3) Deficiency Interest shall be assessed and
collected from the date prescribed for its
 payment until the full payment thereof, or
(C) Delinquency Interest. - xxx upon issuance of a notice and demand by the
Commissioner of Internal Revenue,
whichever comes earlier.

Attempt to Any person who willfully attempts in any manner to (1) Fine
Evade or Defeat evade or defeat any tax imposed under this Code or  Not less than P500,000 but not more than
Tax the payment thereof shall, in addition to other P10,000,000
penalties provided by law, upon conviction thereof, be
Sec. 254 punished by a fine of not less than Thirty thousand (2) Imprisonment
pesos (P30,000) but not more than One hundred  Not less than 6 years but not more than 10
thousand pesos (P100,000) and suffer imprisonment years
of not less than two (2) years but not more than four
(4) 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.”

Failure or (a) Any person who, being required under Section 237 (1) Penalties for Acts Enumerated Under Sec 264
Refusal to to issue receipts or sales or commercial invoices, (B)
Issue Receipts fails or refuses to issue such receipts or invoices,  Fine – Not less than P500,000 but not more
or Sales issues receipts or invoices that do not truly reflect than P10,000,000; and
Commercial and/or contain all the information required to be  Imprisonment – Not less than 6 years but not
Invoices, known therein, or uses multiple or double receipts more than 10 years
Violations or invoices, shall, upon conviction for each act or
Related to the omission, be punished by a fine of not less than (2) Fourth item is added to Sec. 264 (B)
Printing of One thousand pesos (P1,000) but not more than  “(4) Printing of other fraudulent receipts or
such Receipts Fifty thousand pesos (P50,000) and suffer sales or commercial invoices.”
or Invoices and imprisonment of not less than two (2) years but not
Other more than four (4) years.
Violations (b) Any person who commits any of the acts
enumerated hereunder shall be penalized in the
Sec. 264 same manner and to the same extent as provided
for in this Section:

(1) Printing of receipts or sales or commercial

invoices without authority from the Bureau of
Internal Revenue; or

(2) Printing of double or multiple sets of invoices

or receipts; or

(3) Printing of unnumbered receipts or sales or

commercial invoices, not bearing the name,
business style, Taxpayer Identification
Number, and business address of the person
or entity.

Failure to No provision in the current Tax Code. A new section is added as Section 264-A:
Transmit Sales
Data Entered “Sec. 264-A. Failure to Transmit Sales Data Entered
on CRM/POS on Cash Register Machine (CRM)/ Point of Sales
Machines to the System (POS) Machines to the BIR’s Electronic
BIR’s Sales Reporting System. - Any taxpayer required to
Electronic transmit sales data to the Bureau’s electronic sales
Sales reporting system but fails to do so shall pay, for each
Reporting day of violation, a penalty amounting to one-tenth of
System one percent (1/10 of 1%) of the annual net income
as reflected in the taxpayer’s audited financial
statement for the second year preceding the current
taxable year for each day of violation or Ten
Thousand Pesos (P10,000), whichever is higher:
Provided, That should the aggregate number of the
days of violation exceed one-hundred eighty (180)
 days within a taxable year, an additional penalty of
permanent closure of the taxpayer shall be imposed:
Provided, further, That if the failure to transmit is due
to force majeure or any causes beyond the control of
the taxpayer the penalty shall not apply.”

Purchase, Use, No provision in the current Tax Code. A new section is added as Section 264-B.
Possession,
Sale or Offer to “Sec. 264-B. Purchase, Use, Possession, Sale or
Sell, Offer to Sell, Installment, Transfer, Update, Upgrade,
Installment, Keeping or Maintaining of Sales Suppression
Transfer, Devices. - Any person who shall purchase, use,
Update, possess, sell or offer to sell, install, transfer, update,
Upgrade, upgrade, keep or maintain any software or device
Keeping or designed for, or is capable of: (A) suppressing the
Maintaining of creation of electronic records of sale transactions
Sales that a taxpayer is required to keep under existing tax
Suppression laws and/or regulations; or (B) modifying, hiding, or
Devices deleting electronic records of sales transactions and
providing a ready means of access to them, shall be
punished by a fine of not less than Five Hundred
Thousand Pesos (P500,000.00) but not more than
Ten Million Pesos (P10,000,000.00); and suffer
imprisonment of not less than two (2) years but not
more than four (4) years; Provided, That a
cumulative suppression of electronic sales record in
excess of the amount of Fifty Million Pesos
(P50,000,000.00) shall be considered as economic
sabotage and shall be punished in the maximum
penalty provided for under this provision.”
Offenses No provision on Fuel Marking. A new section is added as Section 265-A.
Relating to Fuel
Marking
“Sec. 265-A. Offenses Relating to Fuel Marking. - All
offenses relating to fuel marking shall, in addition to
the penalties imposed under Title X of the NIRC, as
amended, Section 1401 of Republic Act 10863,
otherwise known as the ‘Customs Modernization and
Tariff Act (CMTA)’, and other relevant laws, be
punished as follows:

A. Any person who is found to be engaged in the

sale, trade, delivery, distribution or transportation
of unmarked fuel in commercial quantity held for
domestic use or merchandise shall, upon
conviction, suffer the penalties of:

(1) For the first offense, a fine of two million five

hundred thousand pesos (P2,500,000.00);

(2) For the second offense, a fine of five million

pesos (P5,000,000.00);

(3) For the third offense, a fine of ten million

 pesos (P10,000,000.00) and revocation of
license to engage in any trade or business.

B. Any person who causes the removal of the

official fuel marking agent from marked fuel, and
the adulteration or dilution of fuel intended for
sale to the domestic market, or the knowing
possession, storage, transfer or offer for sale of
fuel obtained as a result of such removal,
adulteration or dilution shall be penalized in the
same manner and extent as provided for in the
preceding subsection.

C. Any person who commits any of the acts

numerated hereunder shall, upon conviction, be
punished by a fine of not less than one million
pesos (P1,000,000.00) but not more than five
million pesos (P5,000,000.00) and suffer
imprisonment of not less than four (4) years but
not more than eight (8) years:

(1) Making, importing, selling, using or

possessing fuel markers without express
authority;

(2) Making, importing, selling, using or

possessing counterfeit fuel markers;

(3) Causing another person or entity to commit

any of the two preceding acts; or

(4) Causing the sale, distribution, supply or

transport of legitimately imported, in-transit,
manufactured or procured controlled
precursors and essential chemicals, in
diluted, mixtures or in concentrated form, to
 any person or entity penalized in Subsections
(a), (b), or (c) hereof, including but not limited
to packaging, repackaging, labelling, fraud,
destruction of documents, fraudulent use of
permits, misdeclaration, use of front
companies or mail fraud.

D. Any person who willfully inserts, places, adds or

attaches directly or indirectly, through any overt
or covert act, whatever quantity of any unmarked
fuel, counterfeit additive or chemical in the
person, house, effects, inventory, or in the
immediate vicinity of an innocent individual for
the purpose of implicating, incriminating or
imputing the commission of any violation of this
act shall, upon conviction, be punished by a fine
of not less than five million pesos
(P5,000,000.00) but not more than ten million
pesos (P10,000,000.00) and suffer imprisonment
of not less than four (4) years but not more than
eight 8) years.

E. Any person who is authorized, licensed or

accredited under this Act and its implementing
rules to conduct fuel tests, who issues false or
fraudulent fuel test results knowingly, willfully or
through gross negligence, shall suffer the
additional penalty of imprisonment ranging from
one (1) year and one (1) day to two (2) years and
six (6) months.

The additional penalties of revocation of the license

 to practice his profession in case of a practitioner,
and the closure of the fuel testing facility, may also
be imposed at the instance of the court.”

Violations No provision in the current Tax code (1) Tenth item is added to Sec. 269
Committed by  “ Deliberate failure to act on the application
Government for refunds within the prescribed period
Enforcement provided under Section 112 of this Act.”
Officers

Sec. 269