BULLET NOTES ON OTHER PERCENTAGE TAXES (OPT)

 Sale, lease of goods or properties or performance of services the gross annual sales
and/or receipts of which do not exceed P3,000,000 and who are not VAT
registered.
 Tax Rate and Tax Base: 3% of gross sales/receipts; 1% (July 1, 2020 to June 30,
2023).
 If a taxpayer has two or more lines of businesses that would otherwise be subject to
the value-added tax, the gross sales/receipts will be combined for purposes of
determining if the threshold of P3,000,000 was exceeded.
 In determining the threshold amount, the husband and wife will be considered as
separate taxpayers.

Optional registration
 A person subject to the three percent (3%) percentage tax under paragraph (y) of
Section 109 of the NIRC may opt to be registered under the VAT system.

Return and payment of the 3% (1%) percentage tax

 The taxpayer may file a separate return for each branch or place of business, or a
consolidated return for all.
 The return is a monthly return and must be filed within twenty (20) days after the
end of each taxable month.

Tax on international carriers

 International sea or air carriers for passengers or cargoes from the Philippines to a
foreign country.
 Tax Rate and Tax Base: 3% (1%) of gross receipts
 The business tax is imposable on international carriers is summarized below:

Passenger Goods or Cargo

Abroad to Philippines Not taxable Not taxable
Philippines to Abroad Not taxable 3% OPT
Philippines to Philippines Not taxable Not taxable

 The transport of passengers by international carriers doing business in the

Philippines shall be exempt from value-added tax (VAT) and shall not be allowed to
register for VAT purposes.

Franchise Tax
 Who are subject? Franchise holders of:
o Radio and/or television broadcasting companies whose annual gross
receipts of the preceding year do not exceed P10,000,000 – 3%
o Gas and water utilities – 2%
 All other franchise holders shall pay the value-added tax. The radio and television
broadcasting companies shall have an option to be registered as a value-added
taxpayer and pay the tax due thereon. Provided, however, that once the option is
exercised, it shall be irrevocable.

Stock transaction tax

Tax Base: Gross selling price
Tax Rates:
o On the sale, barter, exchange or other disposition of shares listed and traded
thru a local stock exchange, other than by a dealer in securities: 6/10 of 1%
 Filing and payment – within 5 banking days from the date of collection
o On the sale, barter, exchange or other disposition thru initial public offering
of shares of stock in a closely-held corporation, in accordance with the
proportion of the shares sold, bartered, exchanged or otherwise disposed of to
the total outstanding shares of stock after the listing in the local stock
exchange, as follows:

Up to 25% 4%
Over 25% but not over 33 1/3 2%
Over 33 1/3% 1%
TAXATION BULLET NOTES – OTHER PERCENTAGE TAXES (OPT) Compiled by Vhin

 Initial public offering (IPO) refers to a public offering of shares of stock

made for the first time in the Local Stock Exchange.
 Primary offering refers to the original sale made to the investing public
by the issuer corporation of its unissued shares of stock.
 Secondary offering refers to an offer for sale to the investing public by
the existing shareholders of their securities which is conducted during
an IPO or a follow-on/follow-through offering.
 Filing and Payment – within 30 days from the date of listing of
the shares in the local stock exchange.

Summary
Coverage Taxable Base Tax Rate
Non-VAT registered persons
Gross sales or receipts 3%
under Section 109 (BB)
Domestic carriers and
Gross receipts 3%
keepers of garages
International air/shipping Gross receipts on
carriers doing business in transport of cargo from
3%
the Philippines the Philippines to a foreign
country
Franchise grantees:

Gas and water utilities Gross receipts 2%

Radio and television Gross receipts 3%

broadcasting companies
whose annual gross receipts
of the preceding year do not
exceed P10,000,000 and
did not opt to register as
VAT taxpayer
Overseas dispatch, message
or conversation originating
from the Philippines
Banks and non-bank
financial intermediaries
performing quasi-banking
functions
Other non-bank financial
intermediaries
Amount paid for the 10%
service
Interest, commissions and discounts from 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
5%
years or less
If maturity period is more
1%
than five years
Dividends and equity
shares and net income of 0%
subsidiaries
Royalties, rentals of
property, real or personal,
profits from exchange and
all other items treated as 7%
gross income under Sec.
32 of the Tax Code, as
amended
Net trading gains within
the taxable year of foreign
currency, debt securities, 7%
derivatives and other
similar financial
instruments
Interest, commissions,
discounts and all other
5%
items treated as gross
income under the Tax
TAXATION BULLET NOTES – OTHER PERCENTAGE TAXES (OPT) Compiled by Vhin

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
5%
years or less
If maturity period is more
1%
than 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 Insurance Code to
procure policies of insurance
Total premiums collected 4%
for companies not authorized
to transact business in the
Philippines
Owners of property obtaining
insurance directly with Total premiums paid 5%
foreign insurance companies
Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%
Cabarets, Night or Day
Clubs, videoke bars, karaoke
bars, karaoke televisions, Gross receipts 18%
karaoke boxes and music
lounges
Boxing exhibitions (except
when the World or Oriental
Championship is at stake in
any division, provided
further that at least one of
the contenders for World
Championship is a citizen of
Gross receipts 10%
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 other
Gross receipts 15%
percentage taxes of whatever
nature and description)
Jai-alai and race track Gross receipts 30%
Winnings or 'dividends' 10%
Winnings from double
forecast/quinella and 4%
Winnings on horse races
trifecta bets
Prizes of owners of
10%
winning race horses

Notes:
 Daily double is an event wherein the bettor selects a number in each of two
consecutive races and the selection in each race must finish first.
 Extra double is an event wherein the bettor selects a number in each of two selected
races and the selection in each race must finish first.
 Forecast is an event wherein the bettor selects two numbers in a selected race, and
the selection must finish first and the second in the correct order.
TAXATION BULLET NOTES – OTHER PERCENTAGE TAXES (OPT) Compiled by Vhin

 Double quinella is an event wherein the bettor selects the numbers in each of two
selected races, and the selection in each race must finish first and second in either
order.
 Trifecta is an event wherein the better selects three numbers in a selected race and
the selections must finish first, second and third in the correct order.

Return and payment of Percentage Taxes

 The taxpayer may file a separate return for each branch or place of business, or a
consolidated return for all.
 General rule:
o Every person liable to pay percentage tax must file a monthly return of the
amount of his gross receipts and pay the tax thereon, within twenty (20) days
after the end of each taxable month.
 Exception:
Overseas Within twenty (20) days after the end of the quarter
communications tax
Amusement tax Within twenty (20) days after the end of the quarter
Remitted to the Bureau of Internal Revenue within
Tax on winnings
twenty (20) days from the date withheld
Remitted to the Bureau of Internal Revenue within five
Stock transaction tax (5) banking days of 6/10 of 1% from the date withheld
by the broker.
On primary offering, within 30 days from the date of
Stock transaction tax
listing in the local of 4% 2% and 1% stock exchange