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Other Percentage Taxes

Roxas, Edwin G. Valencia and Gregorio F. Transfer and Business Taxation: Principles and Laws with Accounting Applications. 6th. Vol. 1. Baguio: Valencia Educational Supply, 2013. 1 vols.

DEFINITION
These are general consumption taxes imposed to Non-VAT registered business.

Is the business VATregistered?


Yes No

Gross Receipts or sales subject to 12% output VAT and a benefit of Input VAT on purchases

Does the annual gross receipts or sales exceed 1,919, 500?

Ye s

No Gross Receipts or sales subject to 3% percentage tax and no input tax allowed

Gross Receipts or sales subject to 12% output VAT but no benefit of Input VAT

Businesses subject to OPT:


loafbands

Life insurance companies


Overseas dispatch or message from the Philippines.

Amusement Places

Franchise

Bank and non-bank financial


institution. Non VAT businesses with annual sales of 1, 919, 500 and below Domestic Carriers and keepers of garages. Sale of shares of stock in local stock exchange

1. The life insurance premium is refunded within 6 months.


EXEPTIONS

A percentage tax of 5% of the total premium collected shall be imposed on collection from every person.

EXEPTIONS

2. Premiums collected outside the Philippines from nonresident persons.

Subje ct to 10% TAX

Required to be It is the expense collected and paid of the caller to by the person rendering the be withheld by services within 20 the service days after the end provider. of each quarter

Government
Exemptio ns

Amt. paid for messages transmitted by the Govt. of the Phil or any of its political subdivisions or instrumentalities.

Diplomatic Services
Exemptio ns

Amt. paid for messages transmitted by any embassy and consular offices of a foreign government.

International Organizations
Exemptio ns

Amt. paid for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges, exemptions, and immunities w/c the Govt. of the Philippines granted.

News Services
Exemptio ns

Amt. paid for messages fro any newspaper, press association, radio or television news, broadcasting agency, or news stickers services, to any other newspaper, radio or television newspaper, to a bonafide correspondent, which messages deal exclusively with the collection of news item for the dissemination of news item through public press, radio or television broadcasting or a news sticker service furnishing a general news service similar to that of the public press.

Section 125, NIRC.


Amusement Activities
Jai alai and race tracts

OPT
30%

Cabarets, night or day clubs


Cockpits Professional basketball games Boxing Exhibitions

18%
18% 15% 10%

Boxing Exemption

Horse Race Winnings

10 %

Winnings or dividends derived from horse races based on the actual amount paid to person for every winning ticket after deducting the cost of the ticket.

Winning from double, forcastiquinella

4%

and trifecta bets.

Formula:
Item Prize Less: Cost of Ticket Net Winnings Multiply by amusement tax rate Amusement Tax

Amount P20,000 200 19,200 10% P1,980

Gas and Water Franchi se

A percentage tax of 2% on gross receipts derived from the business covered by the law granting franchise on gas and water utilities.

Radio and/or Television Broadcasting Subject to 3% tax if gross receipts Companies do not exceed P10,000,000.00
May opt to register as VAT Taxpayer. Registration is irrevocable

Gross receipts exceed the threshold.


RTBCs are mandated to register as VAT taxpayers w/in 30 days from the end of the taxable year.

Other Franchi se

Subject to 12% Value Added Tax

Gross Receipts on Banks and Quasi Banks


Interest, commissions, and 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: Maturity of 5 years or less More than 5 years 5% 1%

On dividends and equity shares in the net income of subsidiaries:

0%

Gross Receipts on Banks and Quasi Banks


On royalties , rentals of real or personal property, profit from exchange and all other items treated as gross income under Section 32 of the Code:

7% On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments

7%

Gross Receipts on Other Non Banks


Interest, commissions, and 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: Maturity of 5 years or less More than 5 years 5% 1%

From interest, commissions, discounts and all other items treated as income under the code:

5%

Pre Termination

The maturity period shall be reckoned to the end as of the date of pre termination for purposes of classifying the transaction and applying the correct rate of tax.

Non VAT Business

A non VAT business with annual gross sales or gross receipts of P1,919,500 and below is subject to 3% OPT on its transactions.

Sales to Government by Non VAT Business

Withholding percentage tax of 3%


Seller is Non VAT

Creditable withholding income taxes (CWIT) of


1% on purchases of goods 2% on purchases of services

Cars for rent or hire driven by the lessee .

Transportation contractors persons who transport passengers for hire,


Domestic carriers by land for the transport of passengers
except owners of bancas and owner of animaldrawn two wheeled vehicle

Keepers of garages.

International Carriers of foreign registry

Subject to a tax of 3% of their quarterly gross receipts.

International Carriers of Philippine Registry


subject to VAT on their domestic

transport of both passengers and cargo


zero rated on their transport of

passengers and cargo from the Philippine port to a foreign port.

IPO

Percent of IPO to Outstanding Shares


Up to 25% Over 25% but not over 33 1/3% Over 33 1/3%

Tax Rate
4% 2%

1%

Tax Base

Higher between the Gross Selling Price or Gross Value in money of the shares of stock sold, bartered or exchanged.

Sale through Local Stock Exchange

Subject to an percentage tax of of 1% of the GSP or Gross Value in money.

Reminder:
In general, every person subject to the percentage tax shall file a quarterly return of the amount of his gross receipts, sales, or earnings and pay the tax due thereon w/in 25 days after the end of each taxable quarter.

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