COMMUNITY TAX

Taxpayers subject to the community tax

a. Individuals
b. Corporations

The Community taxes are:

c. Basic Community Tax

d. Additional Community Tax
e. Optional Community Tax
Basic Community Tax

Every inhabitant of the Philippines, eighteen years of age or

over:

a. Regularly employed on a wage or salary basis for at least

thirty (30) consecutive working days during any calendar
year
b. Engaged in business or occupation
c. Owns a real property with an aggregate assessed value of
one thousand pesos or more
d. Required by law to file an income tax return

Must pay a basic community tax of FIVE PESOS (P5)

Additional Community Tax

In addition to the basic community tax, an individual must pay an additional

community tax of ONE PESO (P 1) FOR EVERY ONE THOUSAND PESOS
(P 1,000) which will not exceed FIVE THOUSAND PESOS (P 5,000)

If:
a. From within the Philippines
b. In the preceding year

Of:
c. Gross receipts from business
d. Gross receipts from practice of profession or pursuit of an occupation
e. Income from real property
Mr. A, single, a citizen of the Philippines residing in
Manila, is paying the Community Tax for a calendar
year. In the preceding year he did not earn any income
but he owned a piece of land and building thereon
with an assesses value of P502,000.

What community tax or taxes, if any, is he liable to

pay?
Mr. B, single, is a citizen and resident of the
Philippines. In a year, he derived income from salaries
of P 79,800.

What community tax or taxes, if any, is he liable to

pay?
Basic Community Tax P5

Additional Community Tax

On the salary
(79,800/1,000=79.8 or 79 x1) P79
Mr. D, single, is a citizen and resident of the
Philippines. In a year, he derived the following data:

Income from real property

In Manila P 59,365
In Quezon City 32,682

Gross receipts from business

In Manila P 84,320
In Mandaluyong 67, 320

What community tax or taxes, if any, is he liable to

pay?
Additional Community Tax

The Additional Community Tax must be paid at one place only, even
if the taxable gross receipts or income are derived from various
sources at different place.

In the case of husband and wife, each will have a basic community
tax. There will be a one consolidated additional community tax for
husband and wife, payment of which will be reflected in the
community tax certificate of either the husband or wife.
Mr. and Mrs. D, citizens and residents of the Philippines had the following data for a
calendar year:

Mr.D

Land and building in Manila

Assessed value P 360,000
Income therefrom 400,600
Salaries and Bonus 330,200

Mrs. D

Land and building in Quezon City

Assessed value P 273,300
Income therefrom 100,500
Gross Receipts from business 785,700

In 2018, Mr. and Mrs. D were to pay their community taxes. By agreement of the spouses,
Mr. D was to pay the additional community tax.
Basic Community Tax

Every corporation, no matter how created or organized,

domestic or resident foreign, engaged in or doing business
in the Philippines (including general professional
partnership) must pay a basic community tax of FIVE
HUNDRED PESOS (P500)
Additional Community Tax

In addition to the basic community tax, a corporation must pay an additional

community which will not exceed TEN THOUSAND PESOS (P 10,000)

If:
a. From within the Philippines
b. In the preceding year

For:

c. Two Pesos (P 2) for every Five Thousand Pesos (P 5,000) of

assessed value of real property
d. Two Pesos (P 2) for every Five Thousand Pesos (P 5,000) of gross
receipts from business
Exemptions from Tax

a. Diplomatic and consular representatives

b. Transient visitors when their stay in the Philippines does
not exceed three (3) months
Optional Community Tax

Any person or corporation that is exempt from the

community tax but who desires to pay, will pay one peso (P
1)
When to pay the tax

a. If the individual or corporation becomes liable, as of January 1 of

the year, the tax must be paid not later than the last day of February

b. If the individual or corporation becomes liable after January 1 of the

year but-

1. On or before March 31, the tax must be paid within twenty days
from the day he/it becomes liable
2. After March 31, but before June 30, the tax must be paid on the day
he/it becomes liable.
3. After June 30, the individual or corporation is exempt for the year
DONOR’S TAX
There are the kinds of DONORS:

a. The resident or citizen of the Philippines

b. The non resident, not citizen of the Philippines
THE “GIFT”

What does “GIFT” consists of?

a. The resident or citizen of the Philippines

1. Real estate, regardless of location
2. Tangible personal property, regardless of location
3. Intangible personal property, regardless of location

b. The non resident, not citizen of the Philippines

4. Real estate located in the Philippines
5. Tangible personal property located in the Philippines
6. Intangible personal property located in the Philippines (qualified
by the reciprocity clause in the law)
THE DONOR’S TAX ON TOTAL GIFTS

The tax for each calendar year shall be SIX PERCENT

(6%) computed on the basis of the total gifts in excess of
two hundred fifty thousand (P 250,000) exempt gift made
during the calendar year
EXEMPT DONATIONS

a. Gifts made to or for the use of the National Government or any entity created by
any of its agencies which is not conducted for profit, or to any political subdivision
of the said Government

b. Gifts in favor of an educational and/or charitable, religious, cultural or social

welfare corporation, institution, accredited non-government organization, trust or
philanthropic organization or research institution or organization: Provided,
however, not more than 30% of said gifts will be used by such donee for
administration purposes. For the purpose of this exemption, a ‘non-profit
educational and/or charitable corporation, institution, accredited nongovernment
organization, trust or philanthropic organization and/or research institution or
organization’ is a school, college or university and/or charitable corporation,
accredited nongovernment organization, trust or philanthropic organization and/ or
research institution or organization, incorporated as a nonstock entity, paying no
dividends, governed by trustees who receive no compensation, and devoting all its
income, whether students’ fees or gifts, donation, subsidies or other forms of
philanthropy, to the accomplishment and promotion of the purposes enumerated in
its Articles of Incorporation.” (Sec. 17 of RR No. 12-2018)
VALUATION OF GIFT

Property given as gross gift will be valued at fair market

value at the time of donation.
JOINT DONATION BY HUSBAND AND WIFE

A joint donation by a husband and wife will be considered

a donation of each, of one half on the donation. There will
be separate donor’s tax returns.
TRANSFER FOR INSUFFICIENT CONSIDERATION

If a person transferred property for less than adequate

and full consideration in money or money’s worth, and
such transfer was effective during his lifetime, the amount
by which the value of the property exceeded the
consideration received shall be considered a donation.
CANCELLATION OF INDEBTEDNESS

If a creditor desires to benefit a debtor, and without any

consideration in money or its equivalent received, cancels
the debt, the amount of the debt isa donation by the
creditor to the debtor.
DONOR’S TAX RETURN

The donor’s tax return must be filed within thirty days after the date of the
donation.

On all donations of one date, only one donor’s tax return is required.

The donor’s tax return must be filed with an authorized agent bank, revenue
district officer, collection officer or duly authorized treasurer of the city or
municipality in which the donor was domiciled at the time of the transfer, or if
there is no legal residence in the Philippines, then with the office of the
commissioner of internal revenue.

In case of gifts made to non residents, the return may be filed with the Philippine
Embassy or consulate in the country where he was domiciled at the time of the
donation or directly with the commissioner of internal revenue.
PAYMENT OF DONOR’S TAX

The donor’s tax shall be paid at the time the return is filed,
and with the office where the return is filed.
DONOR’S TAX CREDIT

Only a donor who is a resident or citizen of the Philippines

is allowed a donor’s tax credit.