PREFERENTIAL TAX

SENIOR CITIZENS LAW AND EXEMPT CORPORATIONS

MAGNA CARTA FOR DISABLED PERSONS AND FISCAL INCENTIVES

Compensation as MWE – Exempt from income tax BOI – Registered Enterprises

All establishments Export Enterprises – manufacturing, assembling, processing

20% Discount Goods and services
Exclusive use IT, BPO Tourism
70% of sales/services Logistics and Warehousing
Deductible from GI/GS/GR: are exported Agro-industrial Manufacturer
HIGHER Actual discount granted Eco-Zone Development Ops
Sales discount not less than statutory rate Facility and Utility Providers

Goods and services Domestic Enterprises – edi yung hindi export :)

Medical, dental, medicines, etc.
VAT Exempt VAT on fare – land, air, sea Special Corporate Income Tax [SCIT or Gross Income Tax]

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Hotel, lodging place, theater, cinema ↳ In lieu of ALL national and taxes (except RPT - developers)
Funeral and burial services *activities w/in ECOZONE

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*only to registered activities
5% 3% National
Goods Flu, pneumonia vaccines 2% Local Government
Basic necessities (exclude pastry & cakes)*
Prime commodities (meats, groceries)* Gross Income Net of sales discounts, returns, allowances

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5% Less of cost of sales or direct costs
Service Professional fees: Direct Costs:

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Physicians, medical, dental ↳ Direct salaries, wages and labor expenses
Health workers (n/a to PWD) ↳ Raw materials used, WiP, Finished Goods sold
Hotel, lodging place, theater, cinema ↳ Supplies and fuels used
Funeral and burial services ↳ Depreciation – related to registered activity

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↳ Rent and utility charges
Only one discount – if BOTH Senior citizen and PWD
↳ Finance charge – not capitalized to fixed assets
↓ LE H Promotional
Higher discount SC & PWD Discount
Enhanced Deductions [additional deductions]
10% - buildings and structures
*Max of P 1,300 per week [so 1,300 x 5%]
↳ Depreciation 20% - machineries and equipment
*No VAT exemption if goods are already discounted
► Not including admin and support services
SA by
Senior Citizens ↳ Labor expense – 50% (not including admin, managerial)
 Resident – 60 years old and above ↳ Domestic Input – 50% - directly used for registered export
 Dual citizenship – atleast 6 months residency ↳ Power expense – 50% - for directly related activities
↳ Reinvestment allowance – Manufacturing RBEs
Discounts and Exemptions ONLY for Senior Citizens: ► Reinvested undistributed profits under SIPP
↳ 5% discount for monthly water and electricity bills ► Max of 50% within 5 years
! Registered in the name of senior citizen ↳ R&D – 100% [2x] – for directly related activities
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! Max 100kWH(E); 30 cubic meters(W)
! Per household, not per senior citizen
↳ 50% water, electricity and telephone
! Consumed by Senior Citizen Centers
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► Only for salaries of Filipino employees; and
► Local organization expenditures
↳ Training - 100% [2x]
► Filipino employees, local activities

! Administered by Government or NGO ► Approved by IPA based on SIPP

! For abandoned, homeless senior citizens
Deduction Incentives for Establishments
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↳ Enhanced NOLCO
► NOL during first 3 years from the start
► Carried over within 5 consecutive taxable years
following the year of such loss

Employment atleast 6 months

15% SC’s income does not exceed poverty level
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Incentives under CREATE Law

↳ of the amount paid as salaries and wages After Income Tax Holiday
Income Tax
Holiday1 Incentive Duration Tax Rate
Promotional discount
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Export 4-7 years SCIT 10 years 5%

Sales discounts 5% on water and electricity 4-7 years ED 5 years 20% or 25%
20% discount Domestic*
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50% water, electricity, telephone Atleast 500M 4-7 years ED 5 years 20% or 25%
↳ Senior Citizen Centers Below 500M 4-7 years × × 20% or 25%
*Engaged in ‘critical’ activities under Strategic Investment Priority Plan
*With a minimum investment capital of P500 Million.
Persons with Disability
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SCIT – based on Gross Income (after deductions) – only for EXPORT

 Any age, Filipino citizen
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ED – based on Net Taxable Income

 Restriction on abilities [mental, physical, sensory]
1
Period of Availment under SIPP [Years of ITH]
Deduction Incentives for Establishments TIER I TIER II TIER III
NCR 4 5 6
Certification from DOLE NCR Adjacent Metro Areas 5 6 7
25% Accredited by DOLE and DOH Other areas 6 7 7
↳ of the amount paid as salaries and wages
TIER I – high potential job creation; takes place in market
N/A if under BP 344 (sidewalks, ramps, etc) failures; creation though innovation; essential support to
50% Deduction from Net Taxable Income critical industries; emerging potential advantage [medyo poor]
↳ cost of improvement/modification to accommodate PWDs
TIER II – Produce import substitutes, goods that are not
Proof to Avail available locally, but critical to industries (ex. oil refines)
 Identification Card
↳ SC: OSCA ID or anything to indicate 60 years old ↑ TIER III – R&D; science and health breakthroughs; high
paying jobs; new knowledge and intellectual properties,
↳ PWD: Barangay/Municipal ID; NCWPD ID (transport)
patents, copyrights; highly technical manufacturing;
 Passport
transformation of economy [mala-robotic sa sci-fi movie]
NO EXEMPTION
- 20% FWT - CGT (NL shares) - Donor’s Tax
Barangay Micro-Business Enterprises
- 10% FWT - CGT (6% Cap A) - Estate Tax
Assets not exceeding 3M (excluding land); agro-processing and
- 7.5% on FCDS - VAT/OPT (employed - Excise Tax trading services; DTI-registered. Fees to LGU not exceeding P1,000
or engaged Bus/Prof) - DST - Annual Registration Fee: P500
- Required to file Annual Information Return: 15th day of fourth month after close of taxable year
*Regional District Office or Municipal Treasury
 REMEDIES OF THE TAXPAYER
GR: PAN is required before FAN
still liable to deficiency or Discussion of Discrepancy
did not address discrepancy (Due process)
Shall in no case be extended beyond
10 days Taxpayer 30 days from receipt of NoD PAN not needed (FAN agad)
30 days to provide docs
15 days to reply  Mathematical error
LOA issued to RO PAN
disagrees  Discrepancy between tax w/held
CIR or Rep Failed or disagreed and remitted by w/holding agent
found liable 5 days to explain  Refund or credit is carried over and
RO audit Notice of applied
120 days Taxpayer  Unpaid excise tax due
Discrepancy -Personal delivery
 Articles are sold by exempt to
FAN/FLD -Substituted (only if not present or known)
non-exempt person
-Mail
180/240 days 30 days to protest
still LOA to conduct audit No protest filed
unresolved 30 days to be served 180 - RDO Cases
240 - Large Taxpayer cases
↳ Must be e-LOA Protest by filing
↳ one LOA every year only, request to cancel FDDA
other if there are multiple illegally, erroneously,
Final Decision on
↳ Separate LOAs if audit is more than one year excessive payment Request for Request for Disputed Assessment
Reconsideration Reinvestigation
Paid within 30 days 60 days to submit
Tax credit Failed to submit
2 years to additional documents Failure to file
Supreme Court judicial

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Claim for refund appeal
CIR to decide NOT ACTED
from BIR DENIED
180 days ADVERSE: 15 days
on time
30 days makes the
CTA en banc

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Request for Await decision assessment
DENIED
30 days Reconsideration FINAL,
within 2 year-period to Commissioner DENIED 😛 ADVERSE: 15 days EXECUTORY,
May be (Administrative Appeal) Same CTA Division and
simultaneous DENIED DEMANDABLE
30 days within 30 days

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15 days
Appeal to Court of Tax Appeals (CTA) ADVERSE

REMEDIES OF THE GOVERNMENT GROUNDS:

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Assess Collect ! Assessment lacks legal/factual basis
ASSESSMENT Ordinary 3 years 3 years ! Failed to receive notice caused failure to file protest
Fraud/Failure 10 years 5 years
! Based on Best Evidence Obtainable Rule
Facts and law ! Delinquency resulted from jeopardy assessment

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Valid Assessment Computation of tax liabilities ! Waiver of Statute of Limitation is not authentic
LE H Specific period ! SC has no finality of decision
! Financial incapacity (+ waiver under Bank Secrecy Law)
within 3 years after last day of filing CANNOT BE COMPROMISED:
(w/c is later) date of filing ! Withholding tax cases; criminal tax fraud cases
! Criminal violations already filed
False/fraudulent return evasive intent ! Final/executory cases (XPN: financial incapacity)
SA by
↳ 10 years from discovery ! Estate tax cases (XPN: doubtful valid assessment)
May be extended Agreed-upon by CIR and taxpayer ! Reinvestigation/Reconsi reduces original assessment
↳ before expiry of 3-year period
Amounts Financial incapacity – 10% of basic tax
COLLECTION [After issuance of FAN] (minimum) Doubtful validity - 40% of basic tax
3 years after finality of assessment
5 years (fraud/omission) even without assessment Approval Basic tax exceeds P1M
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⇣ Settlement – below minimum rates

Distraint (seizure)
*
Actual – possession transferred by National Evaluation Board (1 Commissioner, 4 Deputies)
[Personal] Constructive – prohibited to dispose
Abatement or Cancellation
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*
Levy Forfeited to government if no bidder Unjust or Excessive Assessment:
[Real] CIR -public auction ↳ Wrong venue, TP’s mistake caused by erroneous RO
-private sale (approval SecFin) ↳ Non-compliance because of difficult law interpretation
↳ Labor disputes, substantial losses, beyond control
*
may be pursued simultaneously ► Only surcharge and compromise, not interest
Court Action Unjust Administrative and Collection Cost
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↳ CIVIL – to collect taxes less than 1M - RTC/MTC

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► Principal amount at least 1M - CTA CIVIL PENALTIES

↳ CRIMINAL – acquittal from evasion: not a bar to civil actions (Applies to all taxes and withholding agents)
FILED
NOTE: Deficiency tax – not assessed nor collected if < P 100 (but deficient) DUE DATE
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Tax Audit DEFICIENCY DELINQUENT

GR: only ONCE every taxable year Tax on Return < BIR Audit Not paid correctly
XPN: fraud or mistakes; request of reinvestigation; CGT (Interest) (Interest + Surcharge)
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Notice to Submit Documents ↳ Surcharge is not imposed on deficiency

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Checklist ⇢ 10 days ⇢ 1st Notice ⇢ 10 days ⇢ 2nd Notice ⤵ ↳ Interest on deficiency and delinquency is not simultaneous
(order to produce) Subpoena Duces Tecum ⇠ 10 days
Surcharge Failure to pay on time
Best Evidence Obtainable lost/refusal to submit Wrong venue hahahaha
(TP fails to obey SDT) false/incomplete reports 25% Fail to pay full or part (returnable)
Fail to pay full (return not required)
Estimation is allowed – XPN: arbitrary and capriciously
Willful neglect
Jeopardy Assessment – assessed without the benefit of a 50% Filed after written notice
complete or partial audit by authorized revenue officer False or fraudulent return
↳ 30% Understate: income
Other Notices Overstate: deductions
 Tax Verification Notice – for ONETT (estate, donor’s, CGT) Interest 12% [20% before 2018]
 Letter Notice – “no-contact-audit”; cannot be a sub to eLOA Deficiency Failure to pay in full the amount
↳ 5 days to reconcile, 30 days to settle Delinquency due when installment is applied
Extended payment
REMEDIES FOR BOTH TAXPAYER AND GOVERNMENT
Administrative Penalties
Compromise [last resort]  Failure to include P1,000 each failure
↳ Can be entered even if a civil case has been filed required attachment Max P25,000 a year
↳ Taxpayer: offer to pay CIR: acceptance  Failure to w/hold and remit = tax not withheld
↳ “Compromise penalty” = in lieu of criminal prosecution  Failure to refund excess WT = refund not refunded
 EXCISE TAX
Remove VAT, add excise, then add VAT
↳ National and Indirect
↳ Ad valorem (value) and specific (volume)
↳ Proportional and progressive
↳ Privilege/Transactional
Based on Gross Selling/Receipts Price
► If price is < cost + expense, GSP shall be:
 (cost + expense) + atleast 10% profit
 CIR may add profit for taxing purposes
 Sweetened beverages (non-alcoholic)
 Sweetened juice, tea, carbonated (soda)
 Flavored water, energy/sports drinks
 Powdered, cereal and grained drinks
 Other sweetened non-alcoholic beverage
EXPT (on sweetened beverages):
✖ Meal replacement, medical beverages
✖ Fermented liquor, wine, distilled spirits
↳ Because subject to tax on alcoholic beverages
✖ 100% Natural fruit juice, all milk products
✖ Kapeeeee

Paid before removal from production [local] DOCUMENTARY STAMP TAX

removal from BoCustom [import] If unpaid: Document is still valid; not admissible to court,
not registered to registry of deeds (not recorded)
GR: (landed on) Eco-zone ⇢ exempt GR: Any party is liable.
(sold/used) Outside ⇢ excisable If one is exempt, the one who is not exempt is liable.

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TRANSACTION BASIS DST
XPN: Petroleum – paid by importer Original issuance of shares Par Value P2 per P200
↳ excisable in Eco-zone/Freeport No-par value shares Actual consideration P2 per P200

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Stock dividends Actual value of shares P2 per P200
XPN: The issuing corporation should remit the payment of DST
Automobile: [4 or more wheels]
Exempt [BTS JEEP; ExEmPT] Sale of share (previously issued) Par Value P1.5 per P200

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↳ Bus, Truck 50% of DST paid on
No-par value shares P1.5 per P200
original issuance
↳ Special purpose [Fire truck, Mixer]
DST still imposable whether or not certificate of stock is issued
↳ Jeepney

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↳ Purely E-vehicle Exempt Transfer of Securities
► If hybrid: 50% exempt lang ↳ Borrowing/lending - Securities Borrowing and Lending Program
↳ Pick-ups, single cab ↳ Sale through PSE (STT – in lieu of income tax, and DST)
↳ Fixed income, securities under secondary market

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Other exemption ↳ Tax-free exchange (Merger/conso, recap, reorganization)
Removal Export ↳ Derivatives, repurchase agreements
LE H Exclusive use w/in PEZA
Used for Test-run
Delivery to tax-exempt [Embassies, ADB]
Bank checks and drafts
Debt instruments
Check, Deposit, Paymt
Issue price
P3
P1.5 per P200
less than 1 year Proportionate to date P1.5 per P200
The issuer of debt instrument is liable; XPN: agreement (borrower)
Minimum Selling Price
SA by
80% x (SRP – Excise - VAT) Bill of Exchange or Drafts Face Value P0.6 per P200
1
Acceptance Face Value P0.6 per P200
NOTE: SP includes cost of aircon, radio, installation in a car 2
Foreign bills of exchange Face Value P0.6 per P200
1
Drawn outside but payable in PH 2
Drawn inside but payable outside
Mineral Products [inorganic substance]
 Marketable state (with no chemical change) Exempt Indebtedness
 Quarry resources (no metals) – used for construction ↳ Loan, notes, not exceeding P250,000 (personal use only)
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↳ Interbank/department advances (same legal entity)

Paid by operators, lessees, miners, manufacturer of MP ↳ Credit sales (only that executed by seller/service provider)
↳ LIABLE: who is in possession in case of non-payment ↳ Bank deposits with no fixed term/maturity
↳ Interbank call loans (not more than 7 days)
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Paid before removal ↳ Business conduct with BSP

20 days after end of quarter (malayo kasi minahan) ↳ Assignment of debt (same maturity or remaining period)

Cosmetic Surgery Life insurance policy

Improving, altering (pag pumanget haha), enhancing Not exceeding 100k EXEMPT
> 100k to 300k P20
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Subject: Invasive cosmetic surgery > 300k to 500k Amount of insurance P50
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> 500k to 700k P100

 Surgery entering the body or skin > 750k to 1M P150
 Rhino (ilong), pwet, dodo, lypo (taba), face/neck lift, eyelid More than 1M P200
Property Insurance1 Amount of premiums P0.5 per P4
Exempt: Non-invasive and Amelioration Other (indemnity, bonds, title) Amount of premiums P0.5 per P4
✖ Air dissector??, Laser/light, injectables
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✖ Deformity – defect or abnormality Annuities (ex. retirement) Premiums or installment P1 per P200
Pre-need plans Premiums or contribtion P0.4 per P200
✖ Injury, disfiguring disease, infection Indemnity bonds (surety) 2 Amount of premiums P0.3 per P4
✖ Covered by PhilHealth 1
No DST for reinsurance contracts (only on first insurance)
2
Ex. construction activity. EXPT: required in legal proceedings
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5% of GR – 10 days after close of the month RULE: Always paid by the insurance company
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Non-Essential Goods Exempt Insurance Policies

Jewelry (precious metals) [fine and immitated] ↳ Fraternal, beneficiary, cooperative
↳ 20% of wholesale price/importation ↳ Assignment of policy (same maturity or remaining period)
EXEMPT: Qualified Jewelry Enterprise
↳ BOI Accredited; Entitled to 50% training deduction Leases (each year, real only) First P2,000 P6
Fractional excess every P1,000 P2
Mortgage, pledge, (land) E&Trust1
Subject: Not exceeding P5,000 Amount loaned P40
 Perfume, toilet water (pabango) Each 5k in excess of 5k Amount loaned P20
 Yachts, Vessels for pleasure or sports. Sale, donation (real property)2
Consi vs FV (higher) P15 per P1k
1
For estate and trust: whether real or personal
 Tobacco Products, Heated tobacco Subsequent advances: additional DST
 Cigar, cigarettes, vapor,
2
Goverment transaction: Based on actual consideration
✖ EXPT: Import to Eco-/Freeport Zones
Exempt Property Transactions
↳ Still subject: cigar/rettes, alcoholic (duty-free)
↳ Grants, patents, certificates from government
✖ EXPT: if duty-free shops is GOCC ↳ If exempt from donor’s tax (gift to gov’t, charity, educational)
↳ Assignment of mortgage or lease (same maturity, period)
 Alcoholic products [FAQ]
↳ Tax-free exchange (Merger/conso, recap, reorganization)
 Wines covered by rules of affixtures
 Distilled spirits Including: flavored beer, Gin Omitted: Certificates (diploma, notary: P30); Warehouse receipts (P30);
 Fermented liquor EXPT: Tuba, basi, tapuy Bills of lading (P2 or P200); Proxy voting (P30); Power of attorney (P10)
Paid: before removal or advanced payment Deadline: 5th day of following month Loose Stamps: P15 (max P200)
 VALUE-ADDED TAX
Tax on consumption, indirect, may be shifted
Introduction
GS/GR for 12 months exceeds P3,000,000
Liable Reasonable grounds – VAT registrable
Radio, TV franchise – exceeds P10,000,000
Importer – whether in the course of trade or not
If opted 8%: Exempt, cannot avail; except exceeds 3,000,000
↳ Prospectively liable starting next month
Not required but elects to register
Optional Non-cancellable for 3 years
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Non-cancellable forever (Radio and TV)
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NOTE:
 Taxpayer becomes liable to VAT but fails to register:
► Liable to whole Output VAT
► Cannot separately bill output VAT, cannot be shifted
► No Input tax can be claimed
SA by
► Liable for fines and sanctions
 If main business is exempt: cannot elect for VAT
 Incidental/Isolated transactions:
► If an exempt sale – Exempt
► If a zero-rated sale – Liable (12%)
Registration
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 Commencing business – simultaneous with bus. Registration
 Who exceeded threshold – before end of next month
 Radio and TV – 30 days from end of the year
 Opted to register – 10 before beginning of the taxable quarter
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Cancellation of Registration
Effective next month after approval of cancellation
 Written application – if not exceeded P3,000,000
 Ceased business, no expectation to resume within 12 months
 Sole – change of ownership
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 Partnership and Corporation – dissolution
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 Merger and Consolidation
 Failure to start business [FAQ], or becomes exempt
 Did not exceed 3M within 3 years, or revocation after 3 years
OTHER MATTERS
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1. Supplementary Receipts or Invoices (delivery, DM/CM,
acknowledgement, PO, JO, bill of lading, etc.) are not valid
proof to support claims for INPUT TAXES
2. Service rendered by NRA in PH – considered in the course of
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trade or business (even if not in a regular basis)
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3. Subsidence or livelihood – exempt from business taxes.
4. Gross Sales – mean less returns, allowances, and discounts
- cash discounts (conditional) – not allowed
- trade discounts (time of sale) – allowed
Comparisons of VAT Transactions VAT on Services
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12% Zero Exempt Performed within the Philippines
Can carry over excess input VAT Yes  Lease or use of intangible rights
Separately bill Output VAT to customer Yes  Assistance ancillary for enjoyment of property/right
Entitled to input tax credit Yes Yes  Service by non-resident person in connection with the use of
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Can claim refund Yes property or rights purchased from that non-resident person
 Lease of motion picture films, films, tapes and discs
When a non-VAT person issues a VAT invoice/receipt  Lease or right of use for radio, TV, satellite, cable
↳ Liable to VAT and 50% surcharge; cannot claim input tax credit NOTE: Zero-rated - service performed for a foreign client within PH
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VAT on Goods or Properties Lessors of Property (see exempt lease of property)
 Properties located in PH – based on gross rentals
Sale of Goods or Properties:  Rental/royalties to NRFC – licensee is liable on behalf
 Actual receipt – cash basis (at time of sale) rendered or not  Advanced payment – VATable when received
 Constructive receipt – placed at the control of seller ↳ excluding: Loan to lessor, option money, security deposit
↳ Bank deposit/transfer of amount without restriction
↳ Offsetting with debtor’s obligation Professionals – including actors, singers, athletes, etc.
 Transactions Deemed Sale – tax base is the market value  GPP – deposits received as income
↳ GSP is unreasonably lower (30% more than MV) ↳ Expenses to be claimed – should be in the name of GPP
↳ Transfer, use, or consumption or goods originally
intended for sale in the course of business Others haha dami
↳ Distribution to SHs as share in profit; CRs as payment  VAT to lessors or distributors of films, not to sale of tickets
↳ Consignment if not sold within 60 days of consignment  VAT to toll operators, not to the toll fees. Operators are liable
 Dealers in securities – GSP less cost of security sold
↳ Existing inventories at retirement/cessation of business
 Lending investors – other than non/quasi/banks, financial co.
NOTE:
 NON-life insurance companies – OPT kapag life insurance
1. If disposition does not result into a VATable transaction or
deemed sale, there is input tax benefit even without output tax.
Zero-Rated Sales
2. Unused input tax by the dissolved corporation as a result of
If VAT is not billed separately, it is deemed inclusive
merger/conso is absorbed by new or surviving corporation
Cross-border Doctrine: taxed only on where items are consumed
VAT on Importation – based on landed cost
Customs duty + brokerage + DST + Excise
Sale of Tax-free Goods to NON-Exempt
IMPORT ⇢ EXEMPT PERSON (ex. embassy) ⇢ sold to NON-EXEMPT
Export sales/services
 Sale and actual shipment: PH to Foreign
 SALE of goods, supplies, equipment, and fuel – engaged in:
↳ International shipping or international air transport, provided:
[VAT exempt] [Liable as importer]
► Only for exclusive use for goods and passenger transport
Selling price ► PH port directly to foreign port
Sale or Exchange of Real Property FV (which is higher) ► 12% VAT: portion of such items used for other purposes
↳ Sale of power, or fuel generated through renewable energy
Sale not in ordinary course of business EXEMPT
Residential house and lot by Not used in business CGT (6%) Effectively Zero-Rated [FAQ: different from zero-rated]
a non-dealer Used (incidental) VAT  Sales to PEZA and Freeport-Zone registered
Residential house and lot by More than 3,199,200 VAT  Sales to entities granted with indirect exemption - special laws
a real estate dealer 3,199,200 or less EXEMPT
Removed from Zero-Rated [Now 12% VAT under TRAIN]
✖ Processing, manuf for outside business and subsequently exported
Sale on Installment: Initial payment does not exceed 25% of GSP/CP
Sale on Deferred-Payment: > 25% of gross selling/contract price ✖ Sub/contractors whose export sales > 70% of annual production
✖ Foreign currency denominated sales under IRR or BSP
INITIAL PAYMENT = Down payment + Installment during the year ✖ Export sales under Omnibus Investments Code and special laws
Including excess mortgage (Mortgage – Cost = excess) ✖ Sale of gold to BSP (now exempt)
Freeport and Eco-zones are considered outside PH custom territories
Sale of residential lots are no longer exempt Zero-rated: Sale to PAGCOR: VAT registered but exempt under law
 Exempt Goods, Properties, and Services Passenger 3%

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✖ Senior citizens and PWD’s - Sale of essential/basic goods Land
Domestic Goods/Cargoes 12% VAT
A. Hotel, lodging, sports, recreation, restaurants, hospitals [PH-PH] Passenger 12% VAT
✖ Exempt goods and services Air/water
Goods/Cargoes 12% VAT
A. Agricultural, marine food products – “original state” SERVICE
Passenger 0%
Agricultural [CCROP MO] Marine Livestock Poultry DOMESTIC C ORPO

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International Goods/Cargoes 0%
Corn grits, Copra Fish Cow, bulls Fowl (pabo) Air/water

TRANSPORTATION
[PH-Abroad] Passenger EXEMPT
Raw sugar – now muscovado Lobster Calves, pig Duck FOREIGN C ORPO
Ordinary salt Shrimp,Prawn Sheep, goat Geese Goods/Cargoes 3%
Polished/Husked rice Oyster, clams Rabbit Turkey

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Molasses Trout, etc. Sale Domestic Shipment/Air Transport
Means unprocessed even undergone simple processing: VEHICLE Importation EXEMPT
 Preparation – boiling,broiling,grinding,roasting,husking Lease International Shipment/Air Transport
 Preservation – freezing, drying, salting, smoking

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 Packaging – vacuum, shrink wrapping, tetra-pack, etc. Domestic Shipment/Air Transport 12% VAT
B. Fertilizers, feeds, including ingredients (except for pets) Sale
FUEL or International Shipment/Air Transport 0%
C. Importation: Personal or household effects (returning)

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GOODS Domestic Shipment/Air Transport 12% VAT
Value Exempt Years of Stay Outside Did not avail before arrival within: Importation
International Shipment/Air Transport EXEMPT
P150,000 Less than 5 years 6 months
P250,000 5 to not > 10 years 5 years
P350,000 10 or more years 10 years Domestic Shipment 12% VAT
REPAIRS
International Shipment 0%

SA by
 Appliances – one of every kind; max 60 days after return
 Balikbayan boxes – max P150,000, not for sale, 3x a year
 De minimis importation – goods valued P10,000 or below INPUT VAT Transitional Input VAT – for those who become liable to VAT
 Professional instruments; tools of trade, occupation or Basis: HIGHER of 2% of beginning inventory [LCNRV]
employment, wearing apparel, domestic animals. Regular Input Vat Actual VAT paid on such inventory
 IMPORTATION: Fuel, goods, supplies to international... REQUISITES Withholding VAT
D. Medical, dental, hospital, veterinary, laboratory services 1. Transaction – VAT is passed on to a VAT-registered taxpayer A. For lease/service payments to non-residents

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 XPN: Rendered by professionals (see above)
 Sale of medicine for in-patients [XPN: VAT if out-patient]
E. Sale or importation under CREATE Law
 For diabetes, high cholesterol, hypertension (E: Jan 1, 2019)
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 For cancer, mental illness, tuberculosis (E: Jan 1, 2023)
 COVID Related – vaccines, medicines (NE: June 30, 2023)
F. Agricultural contract growers and millings (ex. palay to rice)
G. Private Educational Institutions (DepEd, CHED, and TESDA)
H. Services under employer-employee relationship
I. Regional or Area Headquarters [RHQ]
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↳ NOTE: ROHQs – (10% income tax), (12% VAT)
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↳ Goods – when sold, used, converted. Even if in accrual basis  12% VAT is remitted to BIR:
↳ Service – VAT has actually paid ↳ BIR Form 1600-VT: Monthly Remittance Return
2. Registration – claimed only by VAT-registered persons ► 10 days following the month the withholding was made
↳ Importation – upon release of goods from customs ↳ BIR Form 2306: Certificate of Final Tax Withheld at Source
↳ Purchase of Goods - upon consummation of sale
↳ Service or Lease – upon payment
3. In the course of trade or business
4. Attribution – directly attributable or ratable portion
► On or before Jan 31 of the ff. year or upon request
B. Sales to Government: Now a 5% CREDITABLE withholding VAT
 5% is withheld by the government
 7% is paid by the taxpayer
5. Documentation – to substantiate input tax credit ↳ Excess of 7%: Expense: Actual input > 7% payment
↳ Invoice – proof of transaction or sale (accrual basis) Income: Actual input < 7% payment
↳ Official receipt – proof of payment

J. Banks, non-banks (quasi-banking), financial intermediaries
✖ Cooperatives ✖ Home-owners, condominium association dues
A. Agricultural Cooperatives [CDA]
 Sales to non-members (original state)
 Importation: direct farm inputs, mach&equipment & parts
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↳ VAT invoice – sale, barter, exchange of goods or properties
↳ VAT official receipt – for services and lease of goods/properties
Importation of goods Import entry, BOC receipt, other docs
Purchase of goods/prop Invoice
Purchase of real property Public instrument + VAT invoice
Input VAT Refund or Tax Credit
For: VAT-Registered whose sales are effectively-zero or zero-rated
Refund: Within 2 years after close of the taxable quarter of sale
CIR: 90 days from submission of filing and OR/invoices to decide

 Coop not the producer: only sales to members are exempt
B. Lending activities by credit/multipurpose cooperative [CDA]
C. Non-agri, non-electric, non-credit [CDA]:share cap max 15k
✖ Residential Properties
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Denial of CIR: must be in writing + legal and factual basis
Services Official receipt
Appeal to CTA: within 30 days from denial
Special Rules
Presumptive Input VAT – 4% for purchase of primary Tax Credit Certificate: pwede to pay any internal revenue taxes

A. Low-cost housing and Socialized housing agricultural products (not including fish and marine) as inputs for
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B. Lease of Residential Units (VAT or OPT if commercial) processing or manufacturing of: peyborit mo Deadlines
Monthly rent atleast P15,000 (regardless of aggregate) EXEMPT Sardines Milk Packed instant noodles Monthly VAT: NO LONGER Required
Monthly rent exceeds P15,000 (subject to 3M threshold) VAT/OPT Mackerel Cooking Oil Refined Sugar Quarterly VAT: 25th day following the close of the quarter
✖ Export sales by not VAT-registered persons NO LONGER APPLICABLE
✖ Treaties ✖ Sale of gold to BSP (previously zero-rated) Amortization of Input Vat on aggregate purchase of depreciable capital AMENDED: Standard Input VAT – 7% final withholding VAT of sales to
✖ Tax-free exchange ✖ Printers and publishers – regular/subscription basis goods exceeding P1M in one calendar month [E: December 31, 2021] government; based on selling prices, now creditable WVAT [E: Jan. 1, 2021]
 ESTATE TAX [transfer mortis causa] Deductions
6% based on Net Taxable Estate Ordinary Deductions
Gross Estate – fair value at time of death  Losses - within 1 year
↳ Real property – HIGHER of Zonal vs Assessed ↳ Costs incurred in settlement of estate
↳ Personal Properties – purchase price (recent purchase) ↳ Casualties – including robbery, theft, embezzlement
► If not recent: Pawn value x 3 ↳ Not compensated by insurance (or the portion)
↳ Listed shares – Quotation at time of death ↳ Losses not claimed as deduction for income tax
► If no available: arithmetic mean (High-Low) ↳ Incurred not later than last day of payment of estate tax
↳ Unlisted Common Shares – Book value  Claims against the estate/insolvent persons
↳ Unlisted Preference Shares – Par value Against Estate Insolvent Person
Decedent DEBTOR CREDITOR
Real or Personal Tangible Properties Ordinary Deduction Pecuniary debt Uncollectible portion
Requisites (Against Estate): [CPA SEN]
Situs Resident or Citizen - Wherever i. Not Condoned or prescribed
Non-resident alien - In Philippines only ii. Personal obligation at time of death
Exempt: iii. Adequate and full consideration and good faith
Intangible properties of NRA (within PH) under reciprocity rule iv. Substantiated within 3 years

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↳ Franchise – exercised in Philippines v. Enforceable and valid in law
↳ Share or rights - any partnership or Industry established in PH vi. Notarized (no need if financial institution)
 Unpaid Taxes – accrued before death

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↳ Eighty-five (85%) of share, obligations, bonds by FC is w/in PH
↳ SOB issued by Domestic corporations (sociedad anonima) ↳ Not including income tax, RPT, estate tax.
↳ SOB of Foreign Corp that acquired a business Situs in PH  Unpaid Mortgages – include FV of property in GE first
 Transfer for Public Use

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Inclusions in Gross Estate ↳ Transfers for the use of government or political subdivisions
 Life insurance proceeds for public purpose (deduction from exclusive property)
Beneficiary Revocable Irrevocable  Vanishing Deductions (Property Previously Taxed)

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Third persons Included EXEMPT ↳ Death of present must not exceed 5 years from death of
Estate, executor or administrator Included Included prior decedent or date of donation
 Insufficient Consideration Transfer – selling price below FV ↳ Must have formed part of prior decedent’s estate or gift
Fair value at time of transfer ↳ Estate tax must have been finally determined and paid

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basis if insufficient (SP < FVT) ↳ No vanishing deductions were allowed for prior decedent
Consideration (Selling price)
basis of amount included in GE
FV at time of death
Special Deductions
LE H
EXCLUDE: Bona fide sales: Selling price = or > FV time of transfer
 Transfer in Contemplation of Death
Condition When? Status
 Family Home – including land, must be in PH
↳ Lower FV (Declared in GE vs. Interest); Max P10,000,000
Before death No, Donor’s Tax  Standard Deduction
Fulfilled
At/After death INCLUDED to GE ↳ Resident or Citizen – P5,000,000; NRA – P500,000
SA by
Not fulfilled - INCLUDED to GE  Retirement Benefits (RA 4917) – include in GE first
Waived (transferred) Malamang before No, Donor’s Tax ↳ Amount received by heirs from the employer
 Revocable Transfers (pwede bawiin, so kay decedent pa rin)
Power to revoke transfer Status Foreign Tax Credit
Exercised or Not INCLUDED LIMIT A (Per Country)
Waived - LIMIT ACTUAL ALLOWED
NE Country A
Expired before death - Country A x PH tax due = xx xx LOWER
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Worldwide NE
Expired after death INCLUDED
 Transfer under General Power of Appointment NE Country B
Country B x PH tax due = xx xx LOWER
↳ In favor of anybody (not designated, no transfer yet) Worldwide NE
 Void Transfers – nullified transfers, reverted back to decedent LIMIT A
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LIMIT B (Total Foreign NE)

Exclusions/Exemptions in Gross Estate LIMIT ACTUAL ALLOWED
 Merger of usufruct in the owner of the naked title Total Foreign NE
Country A x PH tax due = xx xx LOWER
(TAX) Worldwide NE
LIMIT B
LOLO [decedent] APO [owner of naked title] Which is lower between limit A or B, or the actual foreign taxes paid
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(TAX) USUFRUCTUARY EXCLUDED

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Filing
“ako muna gagamit” [no title] Who: Administrator or Executor (primary obligation to pay)
 Transfer or delivery of the inheritance or legacy by fiduciary What: BIR Form 1801
heir or legatee to the fideicommissary (form of trust) When: 1 year from decedent’s death
(Tax) (EXEMPT) ↳ Extension for Filing: Meritorious cases – Max 30 days
Decedent Fiduciary Heir Fideicommissary ► No extension for fraud, negligence, disregard of IRR
N st

 Transmission from first heir in favor of another beneficiary in ↳ Extension for Payment:
accordance with the desire of the predecessor
► Judicial settlement – Max 5 years
↳ A special power of appointment (specific designation)
► Extra-judicial settlement – Max 2 years
 Bequest, devises, legacies, transfer to social welfare, cultural,
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charitable institutions (religious, educational: NOT excluded)

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Pro-forma
↳ No part of net income inures to benefit of any individual
↳ Not more than 30% is used for administration purposes Exclusive Common TOTAL
 Exclusive property of spouse Gross Estate xx xx xxx
Before Marriage During Marriage L:Ordinary Deductions (xx) (xx) (xxx)
Properties owned or acquired x x xx
Exclusive – exclusive money L:Special Deductions:
CPG Exclusive
Conjugal – common fund Standard Deduction (x)
ACP Community Community Family Home ½ (x)
Acquired through labor or industry
Net Estate xx
CPG Exclusive Conjugal
L:Share of surviving spouse (xx)
ACP Community Community
NET TAXABLE ESTATE xx
Acquired through gratuitous title
Rate [FAQ] 6%
CPG Exclusive Exclusive
ESTATE TAX DUE xx
ACP Community Exclusive
L: Tax credit (x)
Acquired through labor
Estate Tax Payable xx
CPG Exclusive Conjugal
ACP Community Community
NOTE: Under Absolute Community of Properties [On or after 8-3-88] Funeral, medical, and judicial expenses: NO LONGER DEDUCTIBLE
1. Personal property and exclusive use: Exclusive Notice of Death: NO LONGER NEEDED under TRAIN
XPN: Jewelry - Community; Exclusive if inherited Certification from a CPA: when GE exceeds P5,000,000 – includes (1)
2. Property before marriage who has legitimate descendant in former Itemized assets, (2) Itemized deductions, (3) Tax due paid and still due
marriage – Exclusive Bank withdrawal: (should be made within 1 year) – subject to 6% FWT
XPN: If already included in the gross estate
 DONOR’S TAX [transfer inter vivos] DEALINGS IN PROPERTIES
6% based on Total Gifts in excess of P250,000
Cumulative over one year Capital Gains Tax
Elements Capital Assets – Other than dealers in securities
 Consent, Object, Cause or Consideration Shares of a Domestic Corporation
 Donor’s capacity – minors, even unborn child: can be donees Unlisted 15% Net Capital Gain
 Donative intent – “animus donandi” and delivery Listed
 Acceptance of the donee and donor’s knowledge of acceptance ↳ Through SEC (STT) 0.6% Selling Price
↳ Directly to the buyer 15% Net Capital Gain
Form Real Property (Capital Asset)* 6% GSP vs. FMV
1) Personal Property P5,000 or less *For corporations: real properties does not include MACHINERIES
↳ Orally Simultaneous delivery
↳ Writing More than P5,000 Unlisted/Not Traded Shares – the fair market values are:
Acceptance is also in writing  Common shares – book value
2) Real Property  Preferred shares – liquidation value (redemption price +
↳ In public instrument premiums and dividend in arrears) (sa Estate Tax yung par)
↳ Deed of donation and Deed of acceptance
Listed or Traded through SEC – Stock Transaction Tax (0.6%)

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Void Donations - Taxable if not nullified w/in 30 days  Constitutes a final tax; not subject to Income tax and CGT
 Officials – his wife of descendant by reason of his office

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 Failure to observe formalities Not subject to Capital Gains Tax
 Future property ↳ If made through local stock exchange
 Incapacitated persons (minor, insanity, NRNW deaf-mute) ↳ Shares are of a foreign corporation

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 Criminal offenses ↳ Not a capital asset (seller is a dealer in securities)
 Inexistent object ↳ The sale resulted to a loss
 Adultery (for man) and concubinage (for woman)

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 Lack of acceptance Sale of Real Property to Government, Political
 Spouse donation between spouse (XPN: moderate gift) Subdivisions or Agencies, or GOCCs
↳ CGT or Income tax – at the option of the taxpayer
Inclusions

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Sale of Principal Residence - not subject to CGT if:
 Less than Full and Adequate Consideration ↳ Proceeds are fully utilized to acquire new principal residence
Fair market value
LE H P3,000,000 ↳ Within 18 calendar months from date of sale
P1,500,000 donor’s tax
Consideration (SP) P1,500,000 ► Requisites Exemption can be availed once every 10 years
P 500,000 income tax
Cost/tax basis P1,000,000 BIR is notified within 30 days of the intention
Personal Real Unutilized portion subject to CGT:
Ordinary asset Donor’s tax Donor’s tax Unutilized portion
Capital asset Donor’s tax CAPITAL GAINS TAX Taxable Amount = x FV vs Selling Price
SA by
Gross Selling Price
 Renunciation of Surviving Spouse – share in ACP/CPG
↳ XPN: Renunciation as an heir: not to donor’s tax Other Capital Assets Subject to Income Tax
 Incomplete gifts because of reservation: becomes complete Amounts realized – Tax basis = Gain
↳ When donor renounces reserved power
↳ Right to exercise ceases – reasons other than death  Retirement of Bonds
 Condonation or Forgiveness of Debt  Short sales – selling of a security a speculator does not own
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↳ If creditor desires to benefit a debtor
↳ No other consideration is required
↳ If not included in debtor’s gross income
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 Option gains and losses – exclusive privilege to buy or not
↳ The option money (or privilege) is the capital asset
 Securities becoming worthless – loss from sale of shares
that become worthless. Deductible to gains (not under CGT)

Exclusions/Exemptions  Liquidating Dividends – Difference between sum of cash and

 Gifts to Government, Non-profit agencies, Political subdivision
 Social welfare, charitable, cultural, educational, religious, NGO
↳ 30% rule applies (see in estate tax); paying no dividends
 Campaign contributions to political parties
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the surrendered share. If installment, taxable only on final.
 Retirement or Redemption for Cancellation of Preferred
Shares – difference between the value received and cost of
preferred shares. Not applicable when acquired for treasury.

↳ Must be utilized and spent; reported to CIR Holding Period Rule – only for INDIVIDUALS
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↳ Payments made by political parties - withheld 5% CWT
↳ Declared to Statement of Contributions and Expenditures
 Under special laws (IRRI, IBP, Ramon Magsaysay Award, etc.)
 General renunciation (property not specifically designated)
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Amount of gain or loss to be recognized:
100% Capital asset - held for 12 months or less
50% Capital asset - held for more than 12 months
Capital Loss Limitation Rule – for all taxpayers

Deductions ↳ Losses from sale of capital asset are allowed only to the
extent of the gains. The excess loss goes to:
 Encumbrance (ex. mortgage) assumed by the donee
 Diminutions specifically provided by the donor Capital Loss Carry-over – only for INDIVIDUALS
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↳ Only to succeeding taxable years (1 year only)

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Husband and Wife

 Husband and wife are separate taxpayers (same in estate) Installment Basis
 Only one donor – when a conjugal/community property is APPLIES TO:
donated by husband. (Wife can nullify the validity)  Regular sales – personal (movable) property by a dealer
who normally sells in installment
Filing  Casual sales Personal Property
What: BIR Form 1800 (duplicate) under oath ► More than P1,000
↳ Donation at different dates - separate return each donor ► Initial payment does not exceed
↳ Donation at a same date – only one return each donor 25% of selling price
↳ Separate return if involves conjugal/community property ► Not an inventory
When: 30 days after the gift Real Property
Where: Where the donor is registered (AAB, RDO, Treasurer) ► Initial payment does not exceed
↳ PH Embassy, or CIR office (South QC) for non-resident 25% of selling price
Initial Payment – Payments made within the year
Notice of Donation: to be exempt and claim full deduction
↳ Donations are at least P 50,000 Formulas:
↳ Donees are accredited donee institutions (charitable, etc.)  Installment CGT = (Total CGT/Contract Price) x Installment Coll
↳ 30 days after receipt of the donee’s Certificate of Donation  Realized GP = (Gross Profit/Contract Price) x Collection

Certification Authorizing Registration (CAR) – signifies clearance Selling price = basis for installment compliance
that taxes have been paid. For transfers requiring CAR, donor’s tax Contract price = basis for income or CGT to be recognized
return must still be filed indicating zero payment. Casual sales and holding period does not apply to real estate dealers
 INCOME TAX GENERAL PRINCIPLES
(Highlights only)
Inherent Powers
Non-resident Citizen – at least 183 days (most of the time”)  Police power – for the public welfare
NRA ETB – more than 180 days  Eminent Domain – taking properties; “just compensation”
Resident AND Citizen Within and without RIT  Power of taxation – collect enforced monetary contribution
Others Within only RIT SIMILARITIES OF INHERENT POWERS:
NRA-NETB Within only 25% on GI ↳ Inherent and Indispensable
↳ Legislative in nature; have limitation on rights
For non-VAT registered only ↳ Equivalent compensation
Income does not exceed P3,000,000 Congress: Exercise power to tax; BIR: Implementation
8% Flat Rate Should be signified in the first quarter
In lieu of percentage taxes  Lifeblood Theory – to enable government to operate
No need to attach FS with the return  Necessity Theory – government cannot fulfill duties w/o tax
Based on gross sales/receipts (no cost deductions)  Benefits Received Theory or Symbiotic Relationship –
 Pure Business or Professional Income gov’t would be paralyzed w/o tax. Every person who is able
 Including other non-operating income – must contribute share in running the government.

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 First P250,000 is exempt
✖ No other deductions from gross sales/receipts Principles of a Sound Tax System
 Mixed  Fiscal Adequacy – requires sources of revenues must be

 Compensation – always graduated tax
✖ Business and Profession – P250,000 deduction not allowed
✖ No other deductions from gross sales/receipts
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adequate to meet government expenditures
 Administrative Feasibility – must be effectively enforced and
administered with least inconvenience to taxpayer
 Theoretical Justice – uniform and equitable (progressive)

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Installment: May elect when tax due exceeds P2,000
↳ On or before April 15, then on or before October 15 Taxes are payable in money, but Congress can enact other form

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Fringe Benefits Tax Exemption – Majority of ALL members of Congress
(Monetary Value ÷ 65%) x 35% [75%-25% for NRA]
Stage of Taxation
1. Levy – Determination of Congress as to object, subject, rate

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Not Subject to Fringe Benefits Tax
 Given to a rank-and-file employee
 Retirement, insurance, hospitalization benefits for employees
LE H
 Benefits necessary for trade; for convenience of employer
 De minimis benefits
De Minimis Benefits
Monetized unused vacation leave credit
SA by
Medical cash allowance to dependents
Rice subsidy (P2,000 or 1 sack of 50kg)
Uniform and clothing allowance
Actual medical allowance
Laundry allowance
Employee achievement (non-cash)
Christmas gift
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2. Assessment and Collection – final stage of tax administration
3. Payment – taxpayers’ compliance including remedies
4. Refund – restitution of tax payment as excessive or erroneous
Nature of Power of Taxation
Max value per year
 Comprehensive – covers person, businesses, rights, etc.
10 days VL
 Unlimited – involves power to destroy
P3,000 (P250/month)
 Supreme – insofar as the selection of the subject of taxation
P24,000
 Plenary – complete, unqualified, absolute
P6,000
P10,000
INHERENT LIMITATION OF POWER OF TAXATION
P3,600 (P300/month)
P10,000 ↳ Public Purpose – primarily to raise revenue
P5,000 ► Secondary – non-revenue or sumptuary
 Promote general welfare, regulation, reduction of

Daily meal allowance 25% of MW

Benefits through CBA P10,000 social inequity (progressive tax system),
In excess of P90,000 is taxable: Commissions, honoraria, fringe economic growth (ITH and PEZA),
benefits, in excess of maximum de minimis protectionism (duties)
↳ Exemption of Government – GR: GOCCs are subject
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HOUSING PRIVILEGE Value Monetary Value ↳ Non-delegability of taxing power – exclusively: Congress
ER lease for use of EE Rental 50% of value ► XPN: President – tariffs; LGU – local taxes; Agencies
ER owns for use of EE 5% of FMV 50% of value ↳ International Comity – Doctrine of Sovereign Equality
ER transfers ownership to EE FV vs Cost Entire value ↳ Situs (Territoriality) – act of sovereignty; boundaries
ER transfers with lower price FV less price Entire value
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VEHICLES CONSTITUTIONAL LIMITATIONS OF POWER OF TAXATION

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ER lease for use of EE Rental* 50% of value ↳ Due Process

ER owns for use of EE Cost ÷ 5 50% of value ► Procedural – proper notice (writing), not arbitrary
ER purchase in the name of EE Acq Cost Entire value ► Substantive – not harsh, oppressive; must state law
ER provides cash to purchase Cash given Entire value ↳ Equal Protection – comes from valid classification
ER shouldered a portion Shouldered Entire value ► Apply both to present and future conditions
*Vehicles not normally used in business
N st

► Applied equally to all members of the same class

► Must be germane to purposes of the law
OTHERS ► Based on substantial distinction
 Direct double taxation – prohibited (same subject
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Corporations Not Subject to MCIT matter, place, period, purpose, authority, kind)
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 Non-Profit Proprietary Educational Institution and  Indirect double taxation – allowed (in absence)
Hospitals – reduced to 1% (as per CREATE)
↳ Religious freedom – free exercise clause
↳ Provided income from unrelated activities shall not
↳ Exemption of religious, charitable and educational
exceed 50%; back to 10% starting June 30, 2023
institution from property taxes
 Depositary banks under FCDU
↳ Exemption of non-stock, non-profit educational
↳ Offshore income – EXEMPT
institution from all taxes
↳ Onshore income – 10% final tax
↳ Uniformity – uniform, equitable, progressive
 Offshore Banking Units – now subject to RIT and MCIT
↳ Non-imprisonment for non-payment of debt or poll tax
 Regional Operating Headquarters – now subject to 25%
↳ Non-impairment of contracts
 Branch Profit Remittance Tax (15%) – PEZA is exempted
↳ Freedom of speech and the press
Special Foreign Corporations
Bureau of Internal Revenue
International Carrier 15% on
1 Commissioner and 4 Deputies
(Originating from Philippines) Gross Philippine Billings
(Operations, Legal, Information System, Resource Management)
Non-resident cinematographic film 25% on
↳ Power of assessment and collection (not levy)
owner, lessor or distributor Gross income
Non-resident owner or lessor of 7.5% on ↳ Interpretation of tax laws (subject to review of SecOfFinance)
aircraft, machineries, equipment Gross Rentals ↳ Examination of return – assessment of correct amount of tax
Non-resident owner or lessor of 4.5% on ↳ Examination of books – that may be relevant or material
vessels chartered by PH nationals Gross Rentals ↳ Issue summons – produce records or testify under oath
↳ Compromise or abate (non-delegable) – P500,000 or less
Certified Public Accountant 2023
Quarterly Income Tax: May 15, August 15, November 15