Tax Reform for Acceleration

and Inclusion (TRAIN) Law

(R.A. No. 10963)

FDP Law February 22, 2018

Atty. Froilyn P. Doyaoen-Pagayatan
 Overview
2
1. History and Effectivity
2. Powers of Commissioner
3. Income Tax
4. Estate Tax
5. Donor’s Tax
6. Value-added Tax
7. Documentary Stamp Tax
8. Remedies and Procedures
9. Tax Compliance
10.Proceeds of Tax Collection
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 History
3

House Bill No. 5636: substitution and consolidation of

55 house bills
Approved by the House of Reps. on May 31, 2017
Senate Bill No. 1592: substitution and consolidation of
31 senate bills
Conference committee report: approved by both
House of Reps. and House of Senate on December
13, 2017
Signed by President Duterte on December 19, 2017,
with direct veto

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 Effectivity
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Section 87:
Takes effect on January 1, 2018 upon complete
publication in:
the Official Gazette, or
newspaper of general circulation
Published in the Official Gazette on December 27,
2017

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 Effectivity
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 Powers of Commissioner
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The Cooperative Development Authority (CDA) shall

submit tax incentive report to the BIR containing:
Income tax incentives;
VAT incentives; and
Other incentives of cooperatives
The CDA report shall form part of database created
under TIMTA.

(Section 5)

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 Powers of Commissioner
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The CIR may authorize examination and assessment

of any taxpayer, “notwithstanding any law requiring
the authorization of any government agency or
instrumentality.”

[Section 6(A)]

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 Powers of Commissioner
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 The CIR determines zonal value of real properties:

 upon mandatory consultation with appraisers
 prior notice to affected taxpayers
 subject to automatic adjustment every 3 years
 Zonal value adjustment shall be published in newspaper
of general circulation or posted in provincial capitol, city
or municipal hall and 2 other conspicuous places

[Section 6(E)]

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 Income Tax
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Individual Citizen and Resident Alien Income Tax Rates:
Old Rates: New Rates:

[Section 24(A)(2)]
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Individual Income Tax

Exclusions from gross income:
13th month pay and other benefits:
OLD LAW TRAIN LAW
PhP82,000.00 PhP90,000.00

[Section 32(B)(7)(e)]
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Individual Income Tax

Repealed:
Basic and additional personal exemption
PhP50,000.00 basic exemption
PhP25,000 per dependent child additional
exemption

(Section 35)

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Individual Income Tax:

Old Withholding Tax: New Withholding Tax:

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Individual Citizen and Resident Alien Income Tax

Rates:
Old Withholding Tax: New Withholding Tax:

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Illustration:
Using the old and the revised withholding tax
schedule, compute the withholding tax on the salary
of Mang Pedro, who has 2 qualified dependent
children, for the month of January with the following
details:
Gross Basic Pay PhP25,000.00
Overtime Pay 3,000.00
Rice Subsidy 1,500.00
SSS, Philhealth, PAG-IBIG ee share (included in gross pay) 993.80

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Illustration:
Compute taxable compensation and identify regular
taxable compensation/compensation level:
Taxable Non-taxable
Gross Basic Pay PhP25,000.00
Less: SSS, Philhealth, PAG-IBIG ee share 993.80 PhP993.80
Regular Taxable Compensation 24,006.20
Add: overtime pay 3,000.00
Rice Subsidy 0.00 1,500.00
PhP27,006.20 PhP2,493.80

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Illustration:
Compute taxable compensation (old WT table):
Taxable compensation Php27,006.20 Minimum Tax PhP1,875.00
Less: Compensation level 20,000.00 Additional Tax 1,751.55
Excess (a) 7,006.20 Total WTW PhP3,626.55
Additional Tax (b)=(a) x 25% 1,751.55

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Illustration:
Compute taxable compensation (revised WT table):
Taxable compensation Php27,006.20 Minimum Tax PhP 0.00
Less: Compensation level 20,833.00 Additional Tax 1,234.60
Excess (a) 6,173.20 Total WTW PhP1,234.60
Additional Tax (b)=(a) x 20% 1,234.60

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Illustration:
Compute taxable compensation and identify regular
taxable compensation/compensation level:
Taxable Non-taxable
Gross Basic Pay Ph50,000.000
Less: SSS, Philhealth, PAG-IBIG ee share 1,231.00 PhP1,231.00
Regular Taxable Compensation 48,769.00
Rice Subsidy 0.00 1,500.00
PhP48,769.00 PhP2,731.00

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Illustration:
Compute taxable compensation (old WT table):
Taxable compensation Php48,769.00 Minimum Tax PhP4,166.67
Less: Compensation level 29,167.00 Additional Tax 5,6880.60
Excess (a) 19,602.00 Total WTW PhP10,047.27
Additional Tax (b)=(a) x 30% 5,880.60

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Illustration:
Compute taxable compensation (revised WT table):
Taxable compensation PhP48,769.00 Minimum Tax PhP2,500.00
Less: Compensation level 33,333.00 Additional Tax 3,859.00
Excess (a) 15,436.00 Total WTW PhP6,359.00
Additional Tax (b)=(a) x 25% 3,859.00

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Illustration:
Compute taxable compensation and identify regular
taxable compensation/compensation level:
Taxable Non-taxable
Gross Basic Pay PhP250,000.000
Less: SSS, Philhealth, PAG-IBIG ee share 1,231.00 PhP1,231.00
Regular Taxable Compensation 248,769.00
Rice Subsidy 0.00 1,500.00
PhP248,769.00 PhP2,731.00

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Illustration:
Compute taxable compensation (old WT table):
Taxable compensation Php248,769.00 Minimum Tax PhP10,416.67
Less: Compensation level 50,000.00 Additional Tax 63,606.08
Excess (a) 198,769.00 Total WTW PhP74,022.75
Additional Tax (b)=(a) x 32% 63,606.08

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Illustration:
Compute taxable compensation (revised WT table):
Taxable compensation PhP248,769.00 Minimum Tax PhP40,833.33
Less: Compensation level 166,667.00 Additional Tax 26,272.64
Excess (a) 82,102.00 Total WTW PhP67,105.97
Additional Tax (b)=(a) x 32% 26,272.64

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Comparison:

Taxable Old WT Revised WT % of

Compensation Decrease
PhP27,006.20 PhP3,503.10 PhP1,234.60 65%
PhP48,769.00 PhP10,047.27 PhP6,359.00 36%
PhP248,769.00 PhP74,022.75 PhP67,105.97 9.3%

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Individual Income Tax Rates in 2023:

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Individual Income Tax

Purely self-employed individuals and
professionals:
 8% on gross sales/receipts and other non-operating
income in excess of PhP250,000.00
 As long as the VAT threshold of PhP3,000,000 is not
exceeded
 In lieu of graduated income tax rates and percentage tax
[Section 24(A)(2)(b)]
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Individual Income Tax
Mixed Income Earners:
 Compensation: schedular rates
 Business/Profession:
If total gross sales/receipts PhP3,000,000 or less, the
schedular income tax rates or 8% gross income tax, in
lieu of scheduler income tax and percentage tax
The schedular income tax rates, if gross sales/receipts
exceed PhP3,000,,000
[Section 24(A)(2)(b)]

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Individual Income Tax

Deductions from gross income:
 Purely compensation income earners: no deductions
 Self-employed/professional opting for 8% gross income tax: no
deductions
 Self-employed/professionals opting for schedular income tax:
 Itemized deductions; or
 Optional standard deduction
 Individuals: 40% of gross sales or receipts
 Corporations: 40% of gross income
(Section 34)

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Individual Income Tax

Optional standard deduction
not required to submit financial statements
GPP and individual partners may avail of OSD
only once, either the GPP or individual partners
[Section 34(L)]

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Individual Income Tax Summary

Income Tax Business Tax
FDP Law
20%-35% on 8% on gross Deductions Percentage VAT
taxable income sales/receipts Tax (3%) (12%)
Pure compensation income
Pure self- Annual sales
employed ≥PhP3,000,000
/profession Annual sales
al ≤PhP3,000,000

Mixed Compensation
income
Business/ Annual sales
Profession ≥PhP3,000,000

Annual sales
≤PhP3,000,000
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Question:
Mang Jose earns PhP800,000.00 annual gross
compensation and PhP2,000,000.00 gross sales from
his business. What are the taxes due from him?
Group A: compute income tax and percentage tax
assuming Mang Jose opts for schedular income tax.
Assume that Mang Jose opts for OSD and that total
non-taxable compensation is PhP100,000.00.
Group B: compute 8% gross income tax.

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 Income Tax
34 Schedular Rates 8% Gross Income Tax
Compensation Income PhP800,000.00 PhP800,000.00
Less: 13th Month Pay, etc. +
SSS/Philhealth/PAG-IBIG premium 100,000.00 100,000.00
Net Taxable Compensation PhP700,000.00 PhP700,000.00
Schedular Income Tax Due (@25%) 105,000.00
Gross Sales 2,000,000.00 2,000,000.00
Less: OSD/No deductions 800,000.00 000,000.00
Taxable Income 1,200,000.00 2,000,000.00
Add: Taxable Compensation 700,000.00
Multiplied by: 30% (excess PhP800,000) 1,900,000.00 8%
330,000.00 160,000.00
Add: Basic Tax 0.00
130,000.00
Tax Due
FDP Law PhP460,000.00 PhP 265,000.00
 Income Tax
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Question:
Mang Jose is self-employed and earns
PhP2,800,000.00 gross sales from his business.
Compute the 8% gross income tax on Mang
Jose’s gross sales.

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Question:
Mang Jose is self-employed and earns PhP2,800,000.00 gross sales
from his business. Compute the 8% gross income tax on Mang
Jose’s gross sales.

Gross Sales 2,800,000.00

Less: exempt sales 250,000.00
Taxable Income 2,550,000.00
Multiplied by: 8%
Tax Due PhP204,000.00

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Creditable Withholding Tax

 Creditable withholding tax on payments to the following
reduced to 8%:
 Professional fees, talent fees, commissions for services of
individuals;
 Income distributions to beneficiaries of estates and trusts;
 Income payment to certain brokers and agents;
 Professional fees paid to medical practitioners;
 Commissions of independent and/or exclusive sales
representatives and marketing agents of companies
[RMC 1-2018]

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Billing of service provider:

Service Fee PhP250,000.000 PhP250,000.000

Plus: 12% VAT 30,000.00 30,000.00
280,000.00 280,000.00
Less: 8%/15% Creditable
Withholding Tax 20,000.00 37,500.00
PhP260,000.00 PhP242,500.00

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Individual Income Tax

Passive Income: Prizes
Winnings of more than PhP10,000.00 from PCSO or
lotto shall be subject to 20% final income tax

[Section 24(B)(1)]

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Individual Income Tax

Passive Income: Interest
Interest income of individual taxpayer (except non-
resident individual) from FCDU shall be subject to 15%
final tax

[Section 24(B)(1)]

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Individual Income Tax

Passive Income: Capital Gains
15% final tax on net capital gains from sale of shares
not traded in stock exchange
From 5%/10% under the old law

[Section 24(C)]

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Individual Income Tax

Summary of Changes in Passive Income
Passive Income Old Law TRAIN
PCSO/Lotto winnings above Exempt 20% final income tax
PhP10,000.00
FCDU interest income 7.5% final income tax 15% final income tax
(except non-resident)
Capital gains tax on sale of 5% of gain of PhP100,000.00 15% of gain
shares and below
10% of gain in excess of
PhP100,000.00

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Individual Income Tax

Alien/Filipino Employees of
RHQ/RAHQ/ROHQ/Offshore Banks/Petroleum
Service Contractor:
Schedular income tax rates, if employer is registered in
2018
Subject to veto of President

[Section 25(C)(D)(E)(F)]

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 RHQ/ROHQ, ETC. EMPLOYEES

 In a Tax Advisory dated January 31, 2018, the BIR declared
that all employees of regional headquarters, regional
operating headquarters, offshore banking units, and
petroleum service contractors/subcontractors enjoying the
15% preferential income tax rates prior to 2018 shall be
subject to the schedular income tax rates of 20% to 35%.

[Section 25(C)(D)(E)(F)]

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WHAT IS THE TAXATION OF NON-RESIDENT ALIENS NOT

ENGAGED IN TRADE OF BUSINESS IN THE PHILIPPINES?
 Still subject to 25% income tax on gross income

[Section 25(B)]

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Corporate Income Tax

GOCCs:
SSS, GSIS, Philhealth, local water districts are exempt
from income tax
PCSO removed from tax exempt GOCCs

[Section 27(C)]

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Corporate Income Tax

Passive income of domestic corporations
Interest income of domestic corporation from FCDU
deposit: 15% final tax
Increased from 7.5%
Capital gains from sale of unlisted shares: 15% on net
capital gains
Increased from 5%-10%
[Section 27(D)]

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Corporate Income Tax

Fringe benefits tax:
 Increased to 35% of the grossed-up monetary value, from 32%

(Section 33)

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Compliance:
Individual whose taxable income does not exceed
PhP250,000.00, not required to file income tax return
Individuals engaged in business or practice of
profession shall file income tax return, regardless of
gross income
Income tax return shall not exceed 4 pages
(Section 35)

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Estates and trusts:

The PhP20,000.00 exemption of estates and trusts
has been repealed.

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Declaration of estimated income:

 Individual subject to schedular income tax rates receiving
self-employment income, whether solely or in combination
with salaries, shall file a declaration of estimated income for
current taxable year on or before May 15 taxable year.
 The taxes on the estimated income shall be paid in May
15, August 15 and November 15.
 Due date for final adjustment return: May 15 of the
following calendar year
(Section 74)
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Draft Income Tax Revenue Regulations:

Self-employed Individuals:
If annual gross sales/receipts does not exceed VAT
threshold, shall signify choice of 8% GIT or schedular
income tax rates in 1st Quarter ITR
If opted for 8% GIT but sales/receipts exceed VAT
threshold, automatically subject to schedular rates

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Draft Income Tax Revenue Regulations:

 Self-employed Individuals:
 VAT taxpayer, regardless of sales amounts, cannot opt
for 8% GIT
 If non-VAT and opted for 8% GIT but sales/receipts
exceed VAT threshold, subject to Percentage Tax on first
PhP3,000,000.00 sales
 Sales in excess of PhP3,000,000 shall be subject to 12%
VAT
 8% GIT paid shall be credited to schedular income tax
rates

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Draft Income Tax Revenue Regulations:

Partners of GPPS:
Cannot avail of 8% GIT if distributive share in GPP is
already net of cost and expenses
Cannot claim further deduction (OSD or itemized)
from their distributive share in net income of GPP
If partner derives other income from trade or business
aside from share in income of GPP, partner can
claim OSD or itemized deductions on such other
income

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Draft Income Tax Revenue Regulations:

Filing of Individual ITR:
Quarterly ITRs shall be filed on or before May 15,
August 15, and November 15
Annual ITR shall be filed on April 15

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 6% of net estate
Previously, 5% to 20% of net estate

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57 III. Estate Tax Computation
B. Schedule of Rates for Estate Tax
Estate tax is imposed on the net estate, as follows:
Value of Net But not over The tax shall Plus Of the excess
Estate: Over be over

----- 200,000 Exempt ---- ----

200,000 500,000 0 5% 200,000
500,000 2,000,000 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 and over 1,215,000 20% 10,000,000

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Deductions from gross estate:

Standard deduction: PhP5,000,000
(PhP1,000,00, previously)
Family home: PhP10,000,000 (PhP1,000,000,
previously)

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Deductions from gross estate of non-resident

citizen:
Standard deduction: PhP500,000 (PhP1,000,00,
previously)

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60 III. Estate Tax Computation
ILLUSTRATION OF ESTATE TAX COMPUTATION: MARRIED
DECEDENT
Exclusive Conjugal Total
Family home P 2,000,000
Other real properties 5,000,000 P 7,000,000
Exclusive Properties P 2,000,000 2,000,000
Gross Estate P 2,000,000 P 7,000,000 P 9,000,000
Ordinary Deductions
Conjugal deductions
Funeral expenses (200,000) (200,000)
Other deductions (1,300,000) (1,300,000)
Net Conjugal Estate P 5,500,000 P 7,500,000

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61 III. Estate Tax Computation
ILLUSTRATION OF ESTATE TAX COMPUTATION: MARRIED
DECEDENT (cont.) Exclusive Conjugal Total
Net Conjugal Estate P 5,500,000 P 7,500,000
Special Deductions
Family home allowance (1,000,000)
Standard deduction (1,000,000)
Medical expenses (500,000)
Net Estate before share of spouse P 5,000,000

½ Share of spouse in net conjugal

estate (P5.5M/2) (2,750,000)
Net taxable estate P 2,250,000

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Compute estate tax on net taxable estate of

PhP2,250,000.
Value of Net But not over The tax shall Plus Of the excess
Estate: Over be over

----- 200,000 Exempt ---- ----

200,000 500,000 0 5% 200,000
500,000 2,000,000 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 and over 1,215,000 20% 10,000,000

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Compute estate tax on net taxable estate of

PhP2,250,000 under the old law.
Answer:
Basic tax PhP135,000.00
11% on PhP250,000.00 27,500.00
Total PhP162,500.00

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64 III. Estate Tax Computation
Compute estate tax due under the TRAIN Law.
Exclusive Conjugal Total
Family home P 2,000,000
Other real properties 5,000,000 P 7,000,000
Exclusive Properties P 2,000,000 2,000,000
Gross Estate P 2,000,000 P 7,000,000 P 9,000,000
Ordinary Deductions
Conjugal deductions
Funeral expenses (200,000) (200,000)
Other deductions (1,300,000) (1,300,000)
Net Conjugal Estate P 5,500,000 P 7,500,000

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65 III. Estate Tax Computation
ILLUSTRATION OF ESTATE TAX COMPUTATION: MARRIED
DECEDENT (cont.) Exclusive Conjugal Total
Net Conjugal Estate P 5,500,000 P 7,500,000
Special Deductions
Family home allowance (1,000,000)
Standard deduction (1,000,000)
Medical expenses (500,000)
Net Estate before share of spouse P 5,000,000

½ Share of spouse in net conjugal

estate (P5.5M/2) (2,750,000)
Net taxable estate P 2,250,000

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66 III. Estate Tax Computation
Compute estate tax due under the TRAIN Law.
Exclusive Conjugal Total
Family home P 2,000,000
Other real properties 5,000,000 P 7,000,000
Exclusive Properties P 2,000,000 2,000,000
Gross Estate P 2,000,000 P 7,000,000 P 9,000,000
Ordinary Deductions
Conjugal deductions
Funeral expenses (200,000) (200,000)
Other deductions (1,300,000) (1,300,000)
Net Conjugal Estate P 7,000,000 P 9,000,000

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67 III. Estate Tax Computation
ILLUSTRATION OF ESTATE TAX COMPUTATION: MARRIED
DECEDENT (cont.) Exclusive Conjugal Total
Net Conjugal Estate P 7,000,000 P 9,000,000
Special Deductions
Family home allowance (1,000,000)
Standard deduction (5,000,000)
Medical expenses (500,000)
Net Estate before share of spouse P 3,000,000

½ Share of spouse in net conjugal

estate (P7M/2) (3,500,000)
Net taxable estate P (500,000)

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Compliance:
Gross estates of PhP5,000,000, supported with a
CPA certification (previously, PhP2,000,00)
Deadline for filing and payment: one year from
date of death (previously, 6 months from
death)
Payment by instalment: 2 years from due date

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Compliance:
Withdrawal from bank deposit of account
holder known to the bank to have died is
allowed, subject to 6% final withholding
tax.

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 Donor’s Tax
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Donor’s Tax Rate:

6% of total gifts in excess of PhP250,000.
Previously, 2% to 15% of total gifts in excess of
PhP100,000.00 for donations among relatives
Previously, 30% of total gifts for donations
among strangers

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Transfer for less than adequate consideration:

Amount by which the FMV exceeds the
consideration shall be subject to donor’s tax
Except: sale or exchange made in the ordinary
course of business (a transaction which is a
bona fide, at arm’s length, and free from any
donative intent)
(Section 100)
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Sale of shares not listed in stock exchange:

Book value per FS: negative
Consideration: par value @ PhP10,000,000.00
NABV: PhP15,000,000
(Section 100)

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Zero-rated sales of goods:

Includes sale and delivery of goods to registered
enterprises within tourism enterprise zones as
declared by the Tourism Infrastructure and
Enterprise Zone Authority (TIEZA), subject to
provisions of the Tourism Act of 2009

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If VAT refund in place, subject to 12%:

Sale of raw materials/packaging materials to
non-resident buyer for delivery to resident local
enterprise for manufacturing, processing,
packaging or repacking
Sale of raw materials or packaging materials to
export-oriented enterprise
Export sales under Omnibus Investment Code

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Subject to 12% VAT:

The supply of any assistance that is ancillary
and subsidiary to and is furnished as a means for
enabling the application or enjoyment of
property leased or used in the Philippines or any
knowledge or information.

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Zero-rated sales of services:

Services rendered to registered enterprises within
a separate customs territory;
Services rendered to registered enterprises within
tourism enterprises declared by TIEZA

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If VAT refund in place, subject to 12%:

Processing, manufacturing, or repacking of
goods for other persons doing business outside
the Philippines, which goods are subsequently
exported
Services of subcontractors in processing,
converting or manufacturing goods for
enterprise with export of more than 70% of total
annual production

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Sale of Real Properties:

 Sale of properties not primarily held for sale or lease
in the ordinary course of trade or business
 Sale of real property used for low-cost or socialized
housing
 Residential lot valued at PhP1,500,000
 Sale of house and lot and other residential dwellings
with selling price of not more than PhP2,500,000.00

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Sale of Real Properties:

Beginning Jan. 1, 2021, only the following
are VAT exempt:
 Sale of properties not primarily held for sale or lease
in the ordinary course of trade or business
 Sale of real property used for socialized housing
 Sale of house and lot and other residential dwellings
with selling price of not more than PhP2,000,000.00

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VAT exempt:
Lease of residential unit with monthly rental of not
exceeding PhP15,000
Sale or lease of goods and services to senior citizens
and persons with disability
Transfer of property pursuant to Section 40(C)2) of
the Tax Code
Association dues, membership fees, and other
assessments and charges collected by homeowners
associations and condominium corporations

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VAT exempt (cont.):

Sale of drugs and medicines for diabetes, high
cholesterol, and hypertension beginning
January 1, 2019
Sale of gold to the BSP
Sale of goods and services, if the gross annual
sales or receipts of the seller do not exceed
PhP3,000,000
FDP Law
 Value-added Tax
82

VAT refund:
90 days from submission of official
receipts/invoices in support of application
Denial of refund: appeal to CTA within 30
days from receipt of decision

FDP Law
 Value-added Tax
83

Beginning January 1, 2023:

Filing and payment of VAT shall be done
within twenty-five (25) days after the close
of each taxable quarter

FDP Law
 Value-added Tax
84

Withholding VAT:
 beginning in Jan. 1, 2021, from creditable
withholding tax to final withholding of 5%

FDP Law
 Draft Value-added Tax Rev. Regs.
85

Lease of Real Properties:

Exempt: lease of residential units where
monthly rental per unit exceeds
PhP15,000.00 but aggregate of such
rentals do not exceed PhP3,000,000
Subject to Percentage Tax of 3%

FDP Law
 Draft Value-added Tax Rev. Regs.
86

Lease of Real Properties:

 Lessor has rentals of not exceeding PhP15,000.00
and more than PhP15,000.00
 Exempt from VAT: gross receipts from rentals of
not more than PhP15,000.00, regardless of
annual gross receipts
 Subject to VAT: gross receipts from rentals
exceeding PhP15,000.00 only if annual gross
receipts exceeds PhP3,000,000. Otherwise, 3%
Percentage Tax is applicable.
FDP Law
 Stock Transaction Tax
87

Sale or barter of shares of stock listed and traded through

the stock exchange: subject to tax of 6/10 of 1% of the
gross value in money of the shares of stock sold or
bartered.

FDP Law
 Excise Tax
88

Amendments to excise tax rates on:

Cigarettes and tobaccos
Oils and fuels
Automobiles
Mineral products
Invasive cosmetic procedures: 5%
Sweetened beverages
FDP Law
 Excise Tax
89

Exempt:
Milk products
100% natural fruit juices
100% natural vegetable juices
Meal replacement and medically
indicated beverages
Ground coffee
FDP Law
 Documentary Stamp Tax
90

Doubling of most DST rates: check RR No. 4-

2018
TRANSACTION OLD RATE NEW RATE
Original issue of shares PhP1.00 per PhP200 PhP2.00 per PhP200
par value par value
Sale/transfer of shares PhP.75 per PhP200 par PhP1.50 per PhP200
value par value
Bank chekcs PhP1.50 PhP3.00
Debt instruments PhP1.00 per PhP200.00 PhP1.50 per PhP200.00
issue price issue price

FDP Law
 COMPLIANCE
91

Books of Accounts:
Corporations, companies, partnerships, or
persons whose gross annual
sales/receipts/earnings or output exceed
PhP3,000,000 are required to have their
books of accounts audited and examined
yearly by CPAs and their ITRs
accompanied by AIF.
FDP Law
 COMPLIANCE
92

Invoicing:
Within 5 years from effectivity of the TRAIN,
taxpayers engaged in export, e-
commerce, and large taxpayers shall issue
electronic receipts or sales or commercial
invoices in lieu of manual receipts or sales
or commercial invoices. .

FDP Law
 COMPLIANCE
93

Electronic Sale Reporting:

Within 5 years from effectivity of the TRAIN,
taxpayers engaged in export and large
taxpayers shall electronically report their
sales to the BIR.

FDP Law
 COMPLIANCE
94

Penalties:
The fines and imprisonment for tax criminal
violations have been increased
Deficiency interest cannot be collected
simultaneous with basic interest
Deficiency interest shall be assessed and
collected from the date prescribed or
upon issuance of notice and demand
FDP Law
 COMPLIANCE - TRANSITORY
95

Creditable and Final WT:

 BIR Form 0605: for CWT and FWT for 1st 2 months of every
quarter
 10th/15th day after month of withholding
 ATC: MC 200
 Tax Type: WE or WF
 BIR Form 1601EQ: for CWT and FWT for 3rd month of every
quarter
 last day of month following close of taxable quarter
 Alphalist of payees: last day of month following close of
quarter
FDP Law
 COMPLIANCE - TRANSITORY
96

Percentage Tax:
Pay Percentage Tax on quarterly basis using BIR
Form 2551Q
No need to pay monthly Percentage Tax
Withholding of Other Percentage Taxes and VAT:
Still on a monthly basis using BIR Form 1600

FDP Law
 COMPLIANCE - TRANSITORY
97

Sample 0605:
BIR Form 0605: for CWT and FWT for 1st 2 months
of every quarter
10th/15th day after month of withholding
ATC: MC 200
Tax Type: WE or WF

FDP Law
 PROCEEDS OF TAX COLLECTION
98

 70% of Incremental Revenues:

 Infrastructure programs
 Build, Build, Build Program
 Mass transport and new roads
 Military
 Sports for public schools
 Potable drinking water in public places
 30% social welfare programs
 Unconditional cash transfer
 Fuel vouchers
 Fare and rice discounts

FDP Law
 PROCEEDS OF TAX COLLECTION
99

INCREMENTAL REVENUES APPROPRIATION

Infrastructure Social Welfare

30%

70%

FDP Law
 TAX AMNESTY – HB 7105
100

Covers all internal revenue taxes for 2017 and

prior years, with or without assessments
Natural or juridical entities
Notice of Tax Amnesty accompanied by FS or
SALN

FDP Law
 TAX AMNESTY – HB 7105
101
 No assessments
 Individuals, trusts, estates: 8% of the net worth or
PhP10,000.00, whichever is higher
 Partnerships, corporations, cooperatives:
 With capital of up to PhP10M: 8% of net worth or
Php10,000, whichever is higher
 With capital of above PhP10M to PhP50M, 8% of net worth
or PhP100,000, whichever is higher
 With capital of above PhP50M to PhP100M, 8% of net
worth or PhP1,000,000, whichever is higher
 With capital of above PhP100M, 8% of net worth or
PhP10,000,000, whichever is higher

FDP Law
 TAX AMNESTY – HB 7105
102

With assessments
50% of the basic tax assessed

FDP Law
103
Questions?

Atty. Froilyn Doyaoen-Pagayatan

FDP Law
20th Floor, Zuellig Building
Makati Avenue corner Paseo de Roxas Avenue
Makati City
fdplaw1@yahoo.com
465-9271