Taxation

- It is an inherent power of the states to demand contribution for public purposes

Taxes
- Are the enforced proportional contribution from persons and property levied by the lawmaking body
of the states by virtue of its sovereignty for the support of the government and all public need.
Bureau of Internal Revenue (BIR)
Republic Act no. 10963
Tax Reform for Acceleration and Inclusion (TRAIN)
- Amending numerous sections of the Republic Act no. 8424, National Internal Revenue Code of 1997
Essential Characteristics of Taxes
- It is enforced contribution
- It is generally payable in money
- It is proportional in character
- It is levied on person or property
- It is levied by the state that had jurisdiction over the person or property
- It is levied by the lawmaking body of the state (Executive, Legislative, and Judiciary)
- It is levied for public purposes or purposes
- It is commonly required to be paid at regular periods or intervals (Monthly - wages, Quarterly –
income taxes, business income taxes VAT, Annually, and One time – One Time Taxes Transaction
Documentary Tax stamp)
Capital Gain Tax
- Is s tax imposed on the gains presumed to have been realized by the seller from the sale, exchange or
other disposition of capital assets located in the Philippines
Documentary Stamp Tax
- Is a tax on documents, instruments, loan agreement and papers evidencing the acceptance,
assignment, sale or transfer of an obligation, rights or property incident
Donor’s Tax
- Is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or
more persons who are living at the time of the transfer
- Less than 250k it is except for donor’s tax
Estate
- Is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and
beneficiaries at the time of death and on certain transfers which are made by law as equivalent to
testamentary disposition.
- 6%
- 10M for Family home deduction
Percentage Tax
- Is a business tax imposed on persos or entities who sell or lease goods, properties or services in the
course of trade or business whose gross annual sales or receipts do not exceed on a certain threshold
and are not VAT-registered
Value-added Tax
- Is a business tax imposed and collected from seller in the course of trade or business on every sale of
properties (real or personal) lease of goods or properties or vendors of services
- It is an indirect tax; thus, it can be passed on to the buyer
- 12%
Income Tax
- Is a tax on all yearly profits arising from property, professions, trades or offices or as a tax on a
person’s income and profits
Withholding Tax on Compensation
- Is the tax withheld from individuals receiving purely compensation income
Two basic types of Income Tax
Individual Income Tax
Corporate Income Tax