Integrated Review for BSMA/BSAIS Learning Material #2 Module 3:

Level 3 CERTIFIED

ACCOUNTING TECHNICIAN LEVEL 3

MODULE 3: BUSINESS TAXES: PERCENTAGE TAXES

Percentage Tax Description

Percentage tax is a business tax imposed on persons, entities, or transactions specified under Sections
116 to 127 of the National Internal Revenue Code of 1997 (also known as Tax Code), as amended, and as
required under special laws.

Quarterly Percentage Tax under Sections 116 to 126 of the Tax Code, as amended

BIR Form 2551Q - Quarterly Percentage Tax Return

Who are required to file?

Persons refer to individuals and non-individuals, which include, but are not limited to, estates, trusts,
partnerships, and corporations.

1. Persons, who are not VAT-registered, who sell goods, properties or services, whose annual gross sales
and/or receipts do not exceed three million pesos (Php3,000,000.00) and are exempt from value-added
tax (VAT) under Section 109 (BB) of the National Internal Revenue Code, as amended by Republic Act
(RA) No. 10963.
2. Persons who lease residential units where the monthly rental per unit exceeds fifteen thousand pesos
(Php15,000.00) but the aggregate of such rentals of the lessor during the year does not exceed three
million pesos (Php3,000,000.00)
3. Persons engaged in the following industries/transactions:
a. Cars for rent or hire driven by the lessee, transportation contractors, including persons who
transport passengers for hire, and other domestic carriers by land for the transport of passengers
(except owners of bancas and owners of animal-drawn two-wheeled vehicle) and keepers of
garages
b. International air/shipping carriers doing business in the Philippines on their gross receipts derived
from transport of cargo from the Philippines to another country
c. Franchise grantees of –
i. radio and/or television broadcasting companies whose annual gross receipts for the
preceding year do not exceed Php 10,000,000.00 and did not opt to register as VAT
taxpayers, and
ii. gas and water utilities.
d. Overseas dispatch, message or conversation transmitted from the Philippines by telephone,
telegraph, tele-writer exchange, wireless and other communication equipment services, except
those transmitted by:

i.The Philippine Government or any of its political subdivisions or instrumentalities;

ii.Diplomatic services;
iii.Public international organizations or any of their agencies based in the Philippines
enjoying privileges, exemptions and immunities which the Philippine Government is
committed to recognize pursuant to international agreement; and
iv. News services for messages which deal exclusively with the collection of news items for,
or the dissemination of news item through, public press, radio or television broadcasting
or a newsticker service furnishing a general news service similar to that of the public press.
e. Banks, non-bank financial intermediaries performing quasi-banking functions
f. Other non-bank financial intermediaries (including pawnshops as clarified under Revenue
Regulations [RR] No. 10 – 2004)
g. Person, company or corporation (except purely cooperative companies or associations) doing life
insurance business in the Philippines
h. Fire, marine or miscellaneous agents of foreign insurance companies
i. Proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions,
professional basketball games, Jai-Alai and racetracks, including videoke bars, karaoke bars,
karaoke televisions, karaoke boxes and music lounges as clarified under Revenue Memorandum
Circular (RMC) No. 18 – 2010
j. Winnings or 'dividends' in horse races

How to file/pay?

Documentary Requirements

1. BIR Form 2551Q - Quarterly Percentage Tax Return Form

2. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable
Integrated Review for BSMA/BSAIS Learning Material #2 Module 3:
Level 3 CERTIFIED

3. Duly approved Tax Debit Memo, if applicable

4. For amended return, proof of payment and the return previously filed
5. Authorization letter, if filed by an authorized representative
6. Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives, and
from the National Electrification Administration for electric cooperatives

Procedures

1. For Manual filing and/or payment:

a. Download the newly-revised BIR Form 2551Q pdf file format under the BIR Forms-
VAT/Percentage Tax Returns section of the BIR website.
b. Properly fill-up BIR Form 2551Q in triplicate copies.
c. Proceed to any Authorized Agent Bank (AAB)located within the territorial jurisdiction of the
Revenue District Office (RDO) where the taxpayer is registered and present the duly
accomplished BIR Form 2551Q and other requirements. If paying manually, present the
aforementioned documents together with BIR-prescribed deposit slip, and payment to the
respective AAB. The Quarterly Percentage Tax shall be paid at the time the return is filed by the
taxpayer.
d. In places where there are no AABs, the duly accomplished BIR Form 2551Q, together with the
required attachments and payment, shall be filed/paid with the Revenue Collection Officer (RCO),
thru the Mobile Revenue Collection Officers System (MRCOS) facility, or duly Authorized
Treasurer of the city or municipality where said business or principal place of business / where
the taxpayer is registered, who will issue an Electronic Revenue Official Receipt (eROR).
e. Receive copy of BIR Form 2551Q duly validated/stamp-received by the AAB/RCO/authorized
City or Municipal Treasurer.
f. Manual Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the
Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM or
Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit
Card).
2. For eFPS filing and/or payment:
a. Use the existing and enhanced old BIR Form 2551Q in the eFPS system which contains all the
alphanumeric tax codes (ATCs) enumerated in the said form in filing the return.
b. Taxable amount to be indicated in the quarterly percentage return shall be the total gross
sales/receipts for the quarter.
c. In case percentage taxes for the first, second and/or third month of the quarter had been paid,
payment/s made are to be reflected in BIR Form 2551Q in Item No. 20A-Creditable Percentage
Tax Withheld per BIR Form 2307.
d. After e-filing, proceed to online payment by clicking the proceed to payment button and pay the
quarterly percentage tax due.
3. For eBIRForms filing and/or payment:
a. Use the existing enhanced old BIR Form 2551Q in Offline eBIRForms Package V7, which
contained all the alphanumeric tax codes (ATCs) enumerated in BIR Form 2551M in filing the
return.
b. Taxable amount to be indicated in the quarterly percentage return shall be the total gross
sales/receipts for the quarter.
c. In case percentage taxes for the first, second and/or third month of the quarter had been paid,
payment/s made are to be reflected in BIR Form 2551Q in Item No. 20A-Creditable Percentage
Tax Withheld per BIR Form 2307.
d. Proceed to any AAB located within the territorial jurisdiction of the RDO where the taxpayer is
registered and present the duly accomplished BIR Form 2551Q and other requirements. If there
is payment that will be done manually, present the aforementioned documents together with BIR-
prescribed deposit slip, and payment to the respective AAB. The Percentage Tax shall be paid at
the time the return is filed by the taxpayer.
e. In places where there are no AABs, the duly accomplished BIR Form 2551Q, together with the
required attachments and payment, shall be filed/paid with the RCO, thru the MRCOS facility, or
duly Authorized Treasurer of the city or municipality where said business or principal place of
business / where the taxpayer is registered, who will issue an Electronic Revenue Official Receipt
(eROR).
f. eBIRForms Filers who want to pay online can pay through GCash Mobile Payment, LandBank of
the Philippines (LBP) Linkbiz Portal (for taxpayers who have ATM account with LBP/Bancnet ATM
or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit
Card).

Note: "No payment" returns filed late will result on imposition by the RDO of penalties, which shall be paid at
the concerned AAB.

When to File/Pay

 Within twenty-five (25) days after the end of each taxable quarter
Integrated Review for BSMA/BSAIS Learning Material #2 Module 3:
Level 3 CERTIFIED

Quarterly Percentage Tax Rates Table

Coverage Taxable Base Tax Rate

Non-VAT registered persons under Section Gross sales or receipts 3%
109 (BB)
Domestic carriers and keepers of garages Gross receipts 3%
International air/shipping carriers doing Gross receipts on transport of 3%
business in the Philippines cargo from the Philippines to a
foreign country
Franchise grantees: 2%
Gas and water utilities
Radio and television broadcasting companies 3%
whose annual gross receipts of the preceding Gross receipts
year do not exceed Php10,000,000 and did
not opt to register as VAT taxpayer Gross receipts

Overseas dispatch, message or conversation Amount paid for the service 10%
originating from the Philippines
Banks and non-bank financial intermediaries Interest, commissions and discounts from
performing quasi-banking functions lending activities as well as income from
financial leasing, on the basis of remaining
maturities of instruments from which receipts
are derived:
• If maturity period is five years or 5%
less
• If maturity period is more than 1%
five years
Dividends and equity shares and 0%
net income of subsidiaries
Royalties, rentals of property, real or 7%
personal, profits from exchange and
all other items treated as gross
income under Sec. 32 of the Tax
Code, as amended
Net trading gains within the taxable 7%
year of foreign currency, debt
securities, derivatives and other
similar financial instruments
Other non-bank financial intermediaries Interest, commissions, discounts 5%
and all other items treated as gross
income under the Tax Code, as
amended
Interest, commissions, discounts from lending
activities, as well as income from financial
leasing on the basis of remaining maturities of
instruments from which such receipts are
derived:
• If maturity period is five years or 5%
less
• If maturity period is more than 1%
five years
Life Insurance Company/Agent/Corporation Total premiums collected 2%
(except purely cooperative companies or
associations)
Agents of foreign insurance companies (except reinsurance premium):
Insurance agents authorized under the Total premiums collected 4%
Insurance Code to procure policies of
insurance for companies not authorized to
transact business in the Philippines
Owners of property obtaining insurance Total premiums paid 5%
directly with foreign insurance companies
Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%
Integrated Review for BSMA/BSAIS Learning Material #2 Module 3:
Level 3 CERTIFIED

Cabarets, Night or Day Clubs, videoke bars, Gross receipts 18%

karaoke bars, karaoke televisions, karaoke
boxes and music lounges
Boxing exhibitions (except when the World or Gross receipts 10%
Oriental Championship is at stake in any
division, provided further that at least one of
the contenders for World Championship is a
citizen of the Philippines and said exhibitions
are promoted by a citizen/s of the Philippines
or by a corporation/ association at least 60%
of the capital of which is owned by said
citizen/s)
Professional basketball games (in lieu of all Gross receipts 15%
other percentage taxes of whatever nature
and description)
Jai-alai and race track Gross receipts 30%
Winnings on horse races  Winnings or 'dividends' 10%
 Winnings from double 4%
forecast/quinella and trifecta
bets
 Prizes of owners of winning 10%
race horses

THANK YOU!!