REVIEWER: FINALS ON BUSINESS AND TRANSFER TAXES

PART 1
Basic concepts Deadlines BIR Forms
Excise Tax Nature: Time of Payment Various Forms
 Imposed on specific good or On Domestic Product
services such as tobacco,  Before removal from the place of
fuel and alcohol. production
 Some calls this tax “sin tax” On imported products
 Also known as tax on  Before release from custom’s custody
production, sale, or
consumption of a
commodity in a country,
including services
 Imposed in addition to VAT
or Percentage Tax
Purpose: (PPD)
 Promote Health
 Protect the Environment
 Discourage purchase of
certain articles

DST Nature and Definition When DST returns are filed and paid Tax Forms
DST is an excise tax levied on Within 5 days after the close of the month when -BIR Form 2000-OT (one
documents, instruments, loan, the taxable document was signed, issued, time);
agreements and papers evidencing accepted or transferred (constructive affixture) -BIR Form 2000 (monthly)
the acceptance, assignment, sale or
transfer of an obligation, rights, or
property incident thereto.

Liability to pay DST

- paid by the person making, signing,
issuing, accepting or transferring the
documents

Tax Remedies Tax Assessment Prescriptive Period of Assessment

Refers to the determination of
amounts due from a person obligated
to make payments.
Deficiency Tax Assessment
It is a deficiency tax liability that is
determined after a tax audit and
examination.
3 years from whichever is later of:
-the last day prescribed by law for the filing of
the return
-the date of actual filing of return
NOTE: the prescription period will be interrupted
upon the issuance of Final Assessment Notice
(FAN)

Community Tax Definition and Nature Time Payment

- It is a local tax levied by cities or
municipalities as provided for under
Section 156 to 164 of the LGC
- it is a personal tax
Community Tax Certificate
(Cedula)
Shall be issued to every person or
corporation upon payment of the
community tax. It ay be also be
issued to any person or corporation
not subject to the community tax
upon payment of P1.00.
GR: shall accrue on the 1st day of January of
each year which shall be paid not later than last
day of February each year.
Rules on Individual - If a person reaches the
age of 18 years or loses the exemption benefit:
a. Before the last day of March – he shall have
twenty days to pay the community tax without
becoming delinquent.
b. Before the last day of June - he shall be liable
on the day he
reaches 18 or upon the day his exemption ends
Rules on corporation – If corporation is
established:
a. Before the last day of March – it shall have
twenty days to pay
the community tax without becoming delinquent.
b. Before the last day of June – shall be liable
upon establishment Time for Payment
Penalties If not paid within the time prescribed –
interest of 24% per annum
Real property Definition
Tax - Is a direct tax on ownership of lands
and buildings or other improvements
thereon not specifically exempted
and is payable regardless of whether
the property is used or not, although
the value may vary in accordance
with such factor.
- It is a property tax
Assessment Levels
An assessment level shall be applied
to the fair market value of the real
property to determine its assessed
value which shall be fixed by
ordinances of the sangguniang
panlalawigan, sangguniang
panlungsod or sangguniang bayan of
a municipality within Metro Manila
based on the class of Real Property.
Accrual of Real Property Tax
Shall accrue on the 1st day of January and from
that date it shall constitute a lien on the property
which shall be superior to any other lien,
mortgage or encumbrance of any kind,
whatsoever, and shall be extinguished only upon
the payment of delinquent tax.
Installment
1st – On or before march 31
2nd – on or before June 30
3rd – on or before September 30
4th – on or before December 31

PART 3
Types of Excise Tax

 Specific Tax
 Ad Valorem Tax
Major Classification of Excisable Products

 Alcohol products
 Tobacco products
 Petroleum Products
 Miscellaneous Articles
o Automobiles
o Non-essential goods
o Non-essential Services: Invasive Cosmetic procedure
o Sweetened Beverages
 Mineral products
Forms of Payment of Documentary Stamp Tax

 Constructive affixture
 Web-based Electronic DST System
 Loose DST Stamp
Types pf Local Taxes imposed by Province

 Tax on transfer of real property ownership

 Tax in business of printing and publication
 Franchise tax
 Tax on sand, gravel and other quarry resources
 Professional tax
 Amusement tax
 Annual fixed tax
Exemptions from Real Property Tax

 Real property owned by the Government except when the beneficial use thereof has
been granted to a taxable person
 Real property used by Religious, Charitable, and Educational Institutions
 Machinery and equipment actually, directly, and exclusively used in the water distribution
or generation of power
 Real property owned by duly registered Cooperatives.
  Machinery and equipment used for pollution control and protecting the environment
Tax Incentives under CREATE Law

 Income Tax Holiday

 5% Special Corporate Income Tax
 Enhanced Deduction
 Tax-and-duty-free Importation
 VAT Exemption and zero-rating for Registered Export Enterprise
 Exemption from payment of local taxes and fees

HIGHLIGHTED RATES
EXCISE TAX
Alcohol Products

Tobacco products
Petroleum products
Mineral products

Automobiles

On

Non-essential Goods

 20% based on the wholesale price of the value of importation used by he Bureau of
Customs in determining Tariff and Customs, net of Excise and VAT
Invasive Cosmetic Products

 5% - performance of services o invasive cosmetic products

Sweetened Beverages

 Using purely caloric sweeteners, and purely on-caloric sweeteners, or a mix of caloric
and non-caloric sweetener – P6.00
 Using purely high fructose corn syrup or in combination with any caloric or non-caloric
sweetener – P12.00
 Using purely coconut sap sugar and purely steviol glucosides – Exempt

DOCUMENTARY STAMP TAX

Tax Tax Due
Code Document Taxable Unit per unit % of Taxable Base
Section Unit
174 -Original issue of shares pf stock P200 or fraction 2.00 1% Par value of shares of stock
with par value thereof
Actual consideration for the
-Original issue of shares of stock P200 or fraction 2.00 1% issuance of shares of stock
w/o par value thereof
Actual value represented by
each share

-Stock dividend P200 or fraction

2.00 1%
thereof
175 Sales, agreements to sell, P200 or fraction 1.50 0.75% Par value of such stock
memoranda of sales, deliveries of thereof
transfer of shares or certificates to DST paid upon the original
stock issuance of said stock

Stock without par value

50%
179 All debt instruments P200 or fraction 1.50 .75% Issue price of any such debt
thereof instruments or fraction of 365
days for instrument with term
of less than 1 year
188 Certificates of damage or otherwise Each Certificate 30.00
and cert. of document issued by any
customs officers, marine surveyor,
notary public and cert. required by
law or by rules and regulations of a
public office
194 Leases and other hiring agreements First 2,000 or 6.00 0.3%
or memorandum or contract for hire, fraction thereof
use or rent of any lands or
tenements or portions thereof For every P1,000 2.00 0.2%
of fractional part in
excess of the first
P2,000 for each
year of the term of
the said contract
or agreement
195 Mortgage or pledge of lands, estate, First 5,000 40.00 0.8% Amount secured
or property and deeds of trust

On each P5,000 20.00 0.4% Amount secured

or fraction thereof
in excess of 5,000

196 Deed of sale, conveyances, 1st 1,000 15.00 1.5%

donations of real property (except
grants, patents or original certificate For each 15.00 1.5% Consideration or FMV,
of adjudication issued by the gov’t) additional P1,000 whichever is higher
or fraction thereof
in excess of
P1,000
ADDITIONAL NOTES:
Classes of Real of Properties (RACIMTS)
1. Residential
2. Agricultural
3. Commercial
4. Industrial
5. Mineral
6. Timberland
7. Special