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 VAT-
registered?

Yes No

Does the annual gross receipts or

Gross Receipts or sales subject to
sales exceed 1,919, 500?
12% output VAT and a benefit of
Input VAT on purchases
Ye
s No

Gross Receipts or sales subject to Gross Receipts or sales subject to 3%

12% output VAT but no benefit of percentage tax and no input tax
Input VAT allowed
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.
 Required to be
It is the expense
collected and paid
Subje of
by the caller
the to
person
ct to be withheld bythe
rendering
10% services
the servicewithin 20
TAX days after the end
provider.
of each quarter
 Government
Exemptio
ns

Amt. paid for messages transmitted

by the Gov’t. 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 Gov’t. 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 OPT

Jai – alai and race tracts 30%

Cabarets, night or day clubs 18%

Cockpits 18%

Professional basketball games 15%

Boxing Exhibitions 10%

Boxing Exemption
 Horse Race Winnings

Winnings or dividends derived from

10 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 Amount
Prize P20,000
Less: Cost of Ticket 200
Net Winnings 19,200
Multiply by amusement tax rate 10%
Amusement Tax 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 5%

More than 5 years 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 5%

More than 5 years 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 animal-
drawn 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 Tax Rate

Up to 25% 4%

Over 25% but not over 33 1/3% 2%

Over 33 1/3%
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

½ 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.
Congratulations
! ! !