NATIONAL TAXES A. INTRODUCTION B. INCOME TAX C. ESTATE TAX D. DONOR’S TAX E. VALUE-ADDED TAX F. OTHER PERCENTA...
A. INTRODUCTIONKinds of Taxes under existing laws. They are: NATIONAL TAXES. Those imposed by the National Governme...
KINDS OF NATIONAL INTERNAL REVENUE TAXES1.The following are deemed to be National Internal Revenue Taxes: ...
KINDS OF NATIONAL INTERNAL REVENUE TAXES2. The following are, among others, the National Taxes imposed b...
B. INCOME TAX Income (for tax purposes) means allwealth which flows into the taxpayer other thanas mere return on ...
NATURE AND PURPOSE OF INCOME TAX It is generally regarded as a privilege taxand not a tax on p...
GROSS INCOME Gross income is all income but notincluding exempt income and income subject tofinal income tax. salar...
All kinds of income of whatever kind andderived from whatever source including thosederived from gambling and illegal tran...
TAXABLE INCOME Taxable Income is gross income as definedabove, less the deductions allowed by law,including in the ca...
INCOMES SUBJECTS TO FINAL INCOME TAXCertain incomes (referred to as passive incomes)are subject to final tax...
1. Royalties (except from books, literary worksand musical compositions-10%) prizes; otherwinnings; interests from bank de...
2. Cash and/or property dividends received froma corporation.- 6%, 8%, and 10%, effective 1998,1999, ad 2000, respectively...
EXCLUSIONS FROM GROSS INCOMEThey are incomes that are exempt from the tax,e.g., life insurance proceeds p...
Other examples of exempt income are: retirement benefits (under certain conditions) received from private firms, Soci...
DEFINITION OF DEDUCTIONS Deductions are items or amounts whichthe law allows to be deducted from gross incometo arrive...
1. For Corporations and business (i.e., notprofessional) partnerships, the itemizeddeductions are: Ordinary and ne...
2. For compensation earners, no deductions areallowed except only personal and additionalexemptions.
AMOUNTS OF PERSONAL AND ADDITIONAL EXEMPTIONS ALLOWABLE TO INDIVIDUALSThere is allowed in the nature of a deductionfrom ...
3. Php.25,000- for an unmarried individual whois the “head of the family” depending upon himor her for support.The additio...
DEFINITION AND SCOPE OF TERM “HEAD OF THE FAMILY”A head of the family is an individual whoactually supports and maintai...
1. One or both parents, or2. One or more brothers or sisters, or3. One or more legitimate, recognized natural, o...
COMPUTATION OF INDIVIDUAL INCOME TAX1. Resident citizens- The formula for computingthe tax for resident citiz...
Gross income from all sources(within and/or outside the Philippines Less: Allowable (itemized) deductions o...
2. Non-resident citizens and overseas contractworkers. -The same computation exempt that onlyincome derived from sour...
4. Non-resident aliens. - The tax is imposed also only on incomederived from sources within the Philippines. a. ...
c. If employed by regional or areaheadquarters and regional operatingheadquarters of multinational companies,...
INDIVIDUALS REQUIRED/NOT REQUIRED TO FILE INCOME TAX RETURNS The tax return is the sworn statementwherein the ta...
b. Every non-resident and resident alien,as their income from sources within thePhilippines; and c. Every non-residen...
2. The following individuals are not required tofile an income tax return: a. An individual whose gross income doesno...
b. An individual earning from a single employerpure compensation income not exceedingPhp.60,000, the income tax on which h...
3. Those deriving compensation incomeconcurrently from two or more employers atany time during the taxable year even if it...
FILING OF RETURN AND PAYMENT OF TAX1. When- the individual income tax return covering income of the prece...
FILING OF RETURN AND PAYMENT OF TAX2. Where- Except in the cases where the Commissioner of Internal Revenu...
FILING OF RETURN AND PAYMENT OF TAX3. By Whom- By the following persons: a. A resident citizen b....
C. ESTATE TAX Estate Tax is a tax on the right of thedeceased person to transmit his lawful heirs orbeneficiaries. ...
NATURE OF ESTATE AND INHERITANCE TAXESThey are not direct taxes on property, nor arethey a capitation tax; that is...
PURPOSE OF THE TAXThe estate and inheritance taxes are two (2)types of death taxes. They are imposed at highrates to help ...
NET ESTATENet estate means gross estate less allowabledeductions and specific exemptions. “SpecificExemptions” are those w...
TAX IMPOSED ON NET STATEThe estate tax is imposed upon the basis of thenet estate considered as a unit computed inaccordan...
DEDUCTIONS FROM THE GROSS ESTATE The allowable deductions consist of theamounts permitted by law to...
FILING OF RETURN AD PAYMENT OF TAX1. When.- Where the gross value of the estate exceeds Php.20,...
FILING OF RETURN AD PAYMENT OF TAX An authorized agent bank, or The revenue district officer, Revenu...
D. DONOR’S TAX Donation is an act of liberality whereby aperson disposes gratuitously of a thing or rightin favor of ...
DONATION NOT SUBJECT TO DONOR’S TAXDonation is: Inter vivos, if made between living persons, to take during the ...
GIFT TAX Gift Tax is a tax imposed on the transferwithout consideration of property or moneybetween two or more person...
NATURE OF GIFT TAX The gift tax is a privilege tax. It is a tax onthe privilege of the donor to give or on theprivil...
PURPOSE OF THE TAX1. The gift tax is intended to supplement the estate and inheritance taxes by preventing their...
PURPOSE OF THE TAX2. The gift tax is also intended to prevent the avoidance of income tax through the device of ...
NET GIFT Net gift means the total amount of giftsless the allowable deductions and specificexemptions provided by law.
TAX IMPOSED ON THE NET GIFT The donor’s tax is computed upon thebasis of the total net gifts made during thecalendar ...
FILING OF RETURN AND PAYMENT TAX1. When.- The donor’s tax return must be filed within 30 da...
 An authorized agent bank, or The revenue district officer, Revenue collection officer, or Duly authorized treasurer ...
E. VALUE-ADDED TAX Value-added tax (VAT) is a percentage taximposed on every sale, barter, exchange, or leaseof goods ...
NATURE OF THE TAX It is a tax not on goods, properties, orservices as such, but on the sale, barter,exchange, or lea...
TRANSACTIONS SUBJECT TO THE TAXExcept those specifically exempted by law, VATapplies1. Every sale...
Barter or exchange is considered by law asa sale. The importation of goods may be forbusiness purpose or for the personal ...
RATES BASES OF THE TAX1. Sale of goods or properties.2. Importation of goods.3. Sale of services.
RATES BASES OF THE TAX1. Sale of goods or properties. - The tax is 10% of the gross selling priceor gross value in...
RATES BASES OF THE TAX2. Importation of goods. - The tax is 10% of the total value used bythe Bureau of Customs in...
RATES BASES OF THE TAX3. Sale of services. - the tax is 10% of the gross receiptsderived by any person (e.g., broke...
TAX APPLIES ONLY TO VALUE ADDED BY SELLER Under the tax credit method forcomputing and collecting VAT, th...
FILING OF RETURN AND PAYMENT OF TAX1. When.- The quarterly value-added tax return of gross sales or gross...
FILING OF RETURN AND PAYMENT OF TAX2. Where.- The quarterly return must e filed with and the tax paid to...
F. OTHER PERCENTAGE TAXES Percentage taxes are taxes based on acertain percentage of the gross selling price orgros...
PERSONS OR BUSINESS SUBJECT TO AND RATES OF OTHER PERCENTAGE TAXES1. Small business enterprises, i.e., those whose ...
3. International carriers, air or shipping, doing business in the Philippines.- 3% of their gross quarterly rece...
6. Life insurance companies.- 5% of gross premium collected.7. Proprietors, lessees or operators of amusement ...
OVERSEAS COMMUNICATION TAXThe tax is imposed upon every overseas dispatchmessage or conversation transm...
TAX ON RECEIPTS OF LIFE INSURANCE COMPANIESThe tax is imposed on persons, companies orcorporations engaged in insur...
The law exempts from the tax purely cooperativecompanies or associations defined as those as areconducted by the members t...
AMUSEMENT TAXES1. Taxes on gross receipts. Taxes equivalent to 18% of the grossreceipts of cockpits, cabarets, and...
AMUSEMENT TAXES2. Taxes on winnings. Taxes imposed on every person who winsin a horse race or jai-alai equivalent t...
TAX ON SALE OF SHARES OF STOCK1. Shares of stock listed and traded through the local stock excha...
TAX ON SALE OF SHARES OF STOCK2. Shares of stock sold through initial public offering in closel...
FILING AND PAYMENT OF THE TAXES1. When.- The percentage tax return of gross sales, receipts or e...
FILING AND PAYMENT OF THE TAXES2. Where.- The quarterly return must be filed with and the tax paid ...
The taxpayer may file a separate return foreach branch or place of business or aconsolidated return for all branches or pl...
G. EXCISE TAX Excise Tax, as used in the Tax Code, aretaxes imposed on certain specified goodsmanufactured or produce...
NATURE OF EXCISE TAX Excise Taxes subject directly the produceor goods to tax. They are, therefore, taxes onproperty.
KINDS OF EXCISE TAXES1. Specific Tax. one imposed and based on weight, volumecapacity, length, number, or any other...
GOODS SUBJECT TO EXCISE TAXES1. In General - Excise Taxes apply: a. To goods manufactured or produced in the...
2. In Particular – The Tax Code enumerates the goods subject to excise taxes, namely: a. Alcohol products ...
FILING OF RETURN AND PAYMENT OF THE TAXES1. When - Unless otherwise specifically allowed the return shall be ...
FILING OF RETURN AND PAYMENT OF THE TAXES2. Where – Except as the Commissioner of Internal Revenue otherwise ...
H. DOCUMENTARY STAMP TAXES Documentary Stamp Taxes is a tax ondocuments, and papers evidencing theacceptance, assig...
NATURE AND PURPOSE OF THE TAX It is a privilege tax because it is reallyimposed on transaction ra...
EFFECT OF FAILURE TO STAMP TAXABLE DOCUMENT Such failure does not render the documentinvalid or void. But i...
EFFECT OF FAILURE TO STAMP TAXABLE DOCUMENT3. No notary public or other officer authorized to administer oa...
FILING OF RETURN AND PAYMENT OF THE TAX1. By whom payable – The tax is payable by the person making, signin...
FILING OF RETURN AND PAYMENT OF THE TAX3. Where payable – The tax return shall be filed with and the tax sh...
DOCUMENTS SUBJECT TO THE DOCUMENTS NOT SUBJECT TO THE TAX TAX1. De...
I. CUSTOM DUTIES Custom Duties are taxes levied by agovernment on the importation or exportationof goods in or out ...
GOVERNING LAW AND ADMINISTRATIVE OFFICES The law governing tariff and customsduties is Presidential Decree No. 1...
CLASSIFICATION OF CUSTOM DUTIES1. Ordinary or regular custom duties, imposed and collected main...
KINDS OF SPECIAL CUSTOMS DUTIES1. Dumping duty- imposed on certain imported articles which are b...
KINDS OF SPECIAL CUSTOMS DUTIES3. Marking duty- imposed on imported articles and containers which...
J. TRAVEL TAXPURPOSE: The law was promulgated in line with “thepolicy of the Government to lessen therestriction on ...
PERSONS LIABLE1. All Filipino citizens;2. Permanent resident aliens; and3. Non-immigrant ant aliens who have stayed in t...
PERSONS EXEMPTED Among others, the following may bementioned; Foreign diplomatic and consular officials; Crew membe...
K. ENERGY TAXPURPOSE: The tax is imposed in view of:1) The need to discourage the uneconomic consumption of fu...
BASES OF THE TAX1. On aircraft – The tax is imposed on non- commercial helicopters and non-commercial fixed wing...
BASES OF THE TAX 3. On electric power consumption - The tax is imposed on the monthly electric power consumpti...
In areas outside Metro Manila where theprevailing electric power rates (excluding theenergy tax) are equal to or higher th...
L. PRIVATE MOTOR VEHICLES TAXPURPOSE This tax is imposed by Executive OrderNo.43 which amended R.A. No. 4136, other...
SCHEDULE OF THE TAX VEHICULAR TYPEVehicle Light Medium Heavy Utility ...
PREPARED BY: VICENTE, REYNEBERT B. BSEII-SST
of 106

National taxes

Published on: Mar 3, 2016
Source: www.slideshare.net


Transcripts - National taxes

  • 1. NATIONAL TAXES A. INTRODUCTION B. INCOME TAX C. ESTATE TAX D. DONOR’S TAX E. VALUE-ADDED TAX F. OTHER PERCENTAGE TAX G. EXCISE TAX H. DOCUMENTARY STAMP TAXES I. CUSTOM DUTIES J. TRAVEL TAX K. ENERGY TAX L. PRIVATE MOTOR VEHICLE TAX
  • 2. A. INTRODUCTIONKinds of Taxes under existing laws. They are: NATIONAL TAXES. Those imposed by the National Governmentunder the National Internal Revenue Code andother laws particularly the Tariff and CustomsCode. LOCAL TAXES. Those imposed by local government tomeet particular needs under the Local GovernmentCode, such as real property tax and the communitytax (formerly residence tax).
  • 3. KINDS OF NATIONAL INTERNAL REVENUE TAXES1.The following are deemed to be National Internal Revenue Taxes: a. income tax b. estate and donor’s taxes c. value-added tax d. other percentages taxes e. excise taxes on certain goods f. documentary taxes g. other taxes as are or hereafter may beimposed and collected by the Bureau of InternalRevenue.
  • 4. KINDS OF NATIONAL INTERNAL REVENUE TAXES2. The following are, among others, the National Taxes imposed by special laws: a. custom duties b. travel tax c. energy tax d. private motor vehicle tax
  • 5. B. INCOME TAX Income (for tax purposes) means allwealth which flows into the taxpayer other thanas mere return on capital. So, not all receipts of aperson are income. Income Tax is a tax on a person’s income,profits and the like, realized in one taxable year.It is imposed at progressive or gradual rates,there being one set of schedule rates forcompensation or employment income, and forbusiness, professional and other types of non-compensation income.
  • 6. NATURE AND PURPOSE OF INCOME TAX It is generally regarded as a privilege taxand not a tax on property. It is a tax on privilegeto earn an income . Its purpose is to raiserevenue.
  • 7. GROSS INCOME Gross income is all income but notincluding exempt income and income subject tofinal income tax. salaries or wages for services including fees, commissions, and similar items and those derived from business or profession, sale of and other dealings in property, interests, rents, dividends, and securities.
  • 8. All kinds of income of whatever kind andderived from whatever source including thosederived from gambling and illegal transactionsare taxable.
  • 9. TAXABLE INCOME Taxable Income is gross income as definedabove, less the deductions allowed by law,including in the case of individuals, the allowablepersonal and additional exemptions.
  • 10. INCOMES SUBJECTS TO FINAL INCOME TAXCertain incomes (referred to as passive incomes)are subject to final tax which shall be withheld bythe payor and paid by him to the Bureau ofInternal Revenue.They are reported by the withholding agent(payor) and paid by him to the BIR. Examples ofsuch incomes and their corresponding final ratesare:
  • 11. 1. Royalties (except from books, literary worksand musical compositions-10%) prizes; otherwinnings; interests from bank deposits; yield orother monetary benefit from deposit substitutes(interest on money market placements); andyield or other monetary benefit from trust fundsand similar arrangements-20%; Prizes amountingto Php.10,000 or less are to be included intaxable income and taxable accordingly.Winnings from Philippine Charity Sweepstakesand lotto are exempt from income tax; and
  • 12. 2. Cash and/or property dividends received froma corporation.- 6%, 8%, and 10%, effective 1998,1999, ad 2000, respectively.3. Net capital gains from sale of shares of stocknot traded through the stock exchange- 5% onthe amount not exceeding Php.100,000, and10% of any amount in excess of Php.100,000;so if the net capital gains is Php.120,000, thefinal tax is Php.7,000 (Php.5,000+Php.2,000).4. Capital gains from sale or real property.- 6%based on the gross selling price or current fairmarket value, whichever is higher.
  • 13. EXCLUSIONS FROM GROSS INCOMEThey are incomes that are exempt from the tax,e.g., life insurance proceeds paid to beneficiariesupon the death of the insured as they areconsidered more as an indemnity rather than asgains or profits, and payments for injuries orsickness as they are compensatory in nature.
  • 14. Other examples of exempt income are: retirement benefits (under certain conditions) received from private firms, Social security and GSIS benefits, Prizes and awards granted in recognition of religious, charitable, scientific, educational, artistic literary or civic achievement, or in sports competition.Exclusions are not considered in determininggross income. Deductions, on other hand, aresubtracted from gross income to arrive at taxable(net) income.
  • 15. DEFINITION OF DEDUCTIONS Deductions are items or amounts whichthe law allows to be deducted from gross incometo arrive at taxable income.
  • 16. 1. For Corporations and business (i.e., notprofessional) partnerships, the itemizeddeductions are: Ordinary and necessary trade, business or professional expenses; Interests on indebtedness; Taxes; Losses; Bad debts; Depreciation; Depletion; Charitable and other contributions; Research and development expenditures; and Pension trust contributions of employees.
  • 17. 2. For compensation earners, no deductions areallowed except only personal and additionalexemptions.
  • 18. AMOUNTS OF PERSONAL AND ADDITIONAL EXEMPTIONS ALLOWABLE TO INDIVIDUALSThere is allowed in the nature of a deductionfrom the amount of taxable income, whethercompensation or not, the following basicpersonal exemptions:1. Php.20,000.00- for single individual ormarried individual judicially decreed as legallyseparated with no qualified dependents;2. Php.32,000.00- for each married individuals(husband or wife); or a total of Php.64,000 incase both spouses earn income; and
  • 19. 3. Php.25,000- for an unmarried individual whois the “head of the family” depending upon himor her for support.The additional exemption of Php.8,000 forevery child but not exceeding four (4)dependents may be claimed by one of thespouses in the case of married individuals.NOTE: the Husband and wife shall compute theirindividual income tax separately based on theirrespective total taxable income. The resulting taxdue from both spouses shall be added and the taxpayable shall be the sum thereof.
  • 20. DEFINITION AND SCOPE OF TERM “HEAD OF THE FAMILY”A head of the family is an individual whoactually supports and maintains in onehousehold, one or more individuals, who areclosely connected with him by bloodrelationship, relationship by marriage, or byadoption. A head of a family includes anunmarried or legally separated man or womanwith:
  • 21. 1. One or both parents, or2. One or more brothers or sisters, or3. One or more legitimate, recognized natural, or legally adopted children living with and dependent upon him or her for their chief support.A recognized natural child is one who bornoutside of wedlock between a man and a wife,who, at the time of the conception of the child,were legally free to marry each other, and isrecognized by one or both parents.
  • 22. COMPUTATION OF INDIVIDUAL INCOME TAX1. Resident citizens- The formula for computingthe tax for resident citizens may be stated asfollows:
  • 23. Gross income from all sources(within and/or outside the Philippines Less: Allowable (itemized) deductions or 10% Optional standard deductions (OSD) _______________________________________= Net Income from all sources Less: Personal and additional exemptions_______________________________________= Taxable income Multiplied by: Graduated tax rate inSec.24(A) of the Tax Code________________________________________= Amount of income tax due and payable
  • 24. 2. Non-resident citizens and overseas contractworkers. -The same computation exempt that onlyincome derived from sources within thePhilippines is taxable.3. Resident Aliens - the same computation as for non-resident citizens.
  • 25. 4. Non-resident aliens. - The tax is imposed also only on incomederived from sources within the Philippines. a. If engaged in trade or business in thePhilippines, he is taxed in the same manner asnon-resident citizen or resident alien. b. If not so engaged, the tax is equal to25% of the entire or gross income (i.e., withoutdeduction) received.
  • 26. c. If employed by regional or areaheadquarters and regional operatingheadquarters of multinational companies, or byoffshore banking units, or by foreign petroleumservice contractors or subcontractors, the tax is15% of such gross compensation income. Thesame rate applies to Filipinos employed andoccupying the same position.
  • 27. INDIVIDUALS REQUIRED/NOT REQUIRED TO FILE INCOME TAX RETURNS The tax return is the sworn statementwherein the taxpayer states the facts as to thenature and extent of his tax liability for the taxableyear. 1. Under the law, the following individualsare required to file an income tax return: a. Every resident citizen regardless ofthe source of his income, within or outside thePhilippines;
  • 28. b. Every non-resident and resident alien,as their income from sources within thePhilippines; and c. Every non-resident alien engaged intrade business or in the exercise of his professionin the Philippines, as to his income from sourceswithin the Philippines.
  • 29. 2. The following individuals are not required tofile an income tax return: a. An individual whose gross income doesnot exceed to his total personal and additionalexemptions for dependents, except if engaged inbusiness or practice of profession, regardless ofthe amount of gross income.
  • 30. b. An individual earning from a single employerpure compensation income not exceedingPhp.60,000, the income tax on which hasalready been correctly withheld by the employer,are no longer required to file the annual incometax returns; hence, the following are notexempted: 1. Those who do not derive income purelyfrom compensation; 2. Those whose pure compensationincome for the taxable year exceedsPhp.60,000; and
  • 31. 3. Those deriving compensation incomeconcurrently from two or more employers atany time during the taxable year even if it doesnot exceed Php.60,000.c. An individual whose income consists solely ofinterest, prizes, royalties, etc. subject to finalincome tax which is required to be withheld bythe payor and paid by him to the Bureau ofInternal Revenue; andd. An individual who is exempt from tax underthe Tax Code or other laws.
  • 32. FILING OF RETURN AND PAYMENT OF TAX1. When- the individual income tax return covering income of the preceding taxable year must be filed in duplicate on or before April 15 of each year or, in meritorious cases, within the extension which may be granted by the Commissioner of Internal Revenue.
  • 33. FILING OF RETURN AND PAYMENT OF TAX2. Where- Except in the cases where the Commissioner of Internal Revenue otherwise permits, it must be filed with the; revenue district office, Revenue collection officer, An authorized agent bank, or Duly authorized treasurer of the city or municipality or where such person has his legal residence or principal place of business in the Philippines; otherwise, With the office of Commissioner of Internal Revenue.
  • 34. FILING OF RETURN AND PAYMENT OF TAX3. By Whom- By the following persons: a. A resident citizen b. A non-resident citizen c. A resident alien d. A non-resident alien The income tax is paid at the time thereturn is filed. This is called the “pay-as-you-file”system.
  • 35. C. ESTATE TAX Estate Tax is a tax on the right of thedeceased person to transmit his lawful heirs orbeneficiaries. Inheritance Tax is a tax on the right of theheirs or beneficiaries to receive the estate of thedeceased person. It is no longer imposed.
  • 36. NATURE OF ESTATE AND INHERITANCE TAXESThey are not direct taxes on property, nor arethey a capitation tax; that is, the tax is laidneither on the property, nor on the transferor orthe transferee. In other words, they are privilegetaxes.
  • 37. PURPOSE OF THE TAXThe estate and inheritance taxes are two (2)types of death taxes. They are imposed at highrates to help reduce undue concentration ofwealth in society to which the receipt of theinheritance is a contributing factor. Theirimposition conforms to the widely acceptedprinciple of ability to pay.
  • 38. NET ESTATENet estate means gross estate less allowabledeductions and specific exemptions. “SpecificExemptions” are those which are declared by lawas expressly exempt from the tax such asbequests to charitable institutions, subject tocertain conditions.
  • 39. TAX IMPOSED ON NET STATEThe estate tax is imposed upon the basis of thenet estate considered as a unit computed inaccordance with the exempt. Thus, if the valueof the estate is Php.500,000, onlyPhp.300,000 is subject to estate tax.
  • 40. DEDUCTIONS FROM THE GROSS ESTATE The allowable deductions consist of theamounts permitted by law to be deducted fromthe value of the gross estate which include,among others, funeral, judicial and medicalexpenses, losses, indebtedness, and taxes, anamount equivalent to the value of decedent’sfamily home not exceeding Php.1,000,000,standard deduction equivalent toPhp.1,000,000 and the amount of all transfersto or for the use of the Government or anypolitical subdivision thereof.
  • 41. FILING OF RETURN AD PAYMENT OF TAX1. When.- Where the gross value of the estate exceeds Php.20,000, an estate tax return must be filed within six (6) months from the decedent’s death and the tax due thereon paid at the same time.2. Where.- Except in cases where the Commission of Internal Revenue otherwise permits, with;
  • 42. FILING OF RETURN AD PAYMENT OF TAX An authorized agent bank, or The revenue district officer, Revenue collection officer, or Duly authorized treasurer of the city or municipality where the decedent or deceased person was residing at the time of his death, or If he was a non-resident, with the Office of the Commissioner.
  • 43. D. DONOR’S TAX Donation is an act of liberality whereby aperson disposes gratuitously of a thing or rightin favor of another who accepts it.
  • 44. DONATION NOT SUBJECT TO DONOR’S TAXDonation is: Inter vivos, if made between living persons, to take during the lifetime of the donor, and Mortis causa, if made in the nature of testamentary disposition, that is, it shall take effect upon the death of the donor.The latter kind of donation is subject to estatetax.
  • 45. GIFT TAX Gift Tax is a tax imposed on the transferwithout consideration of property or moneybetween two or more persons who are living atthe time the transfer is made.KINDS : Donor’s tax or the tax levied on the act of giving; and Donees tax or the tax levied on the act of receiving.
  • 46. NATURE OF GIFT TAX The gift tax is a privilege tax. It is a tax onthe privilege of the donor to give or on theprivilege of the donee to receive. Note that the tax is imposed without reference to the death of the donor.
  • 47. PURPOSE OF THE TAX1. The gift tax is intended to supplement the estate and inheritance taxes by preventing their avoidance by those who give away property and money in anticipation of death, through the taxation of gifts inter vivos without which, the property would be subject to the said taxes. Thus, whether the transfer takes place during life or death, the burden of taxation would be about the same.
  • 48. PURPOSE OF THE TAX2. The gift tax is also intended to prevent the avoidance of income tax through the device of splitting income among numerous donees with the donor thereby escaping of the progressive rates of income taxation.
  • 49. NET GIFT Net gift means the total amount of giftsless the allowable deductions and specificexemptions provided by law.
  • 50. TAX IMPOSED ON THE NET GIFT The donor’s tax is computed upon thebasis of the total net gifts made during thecalendar year, in accordance with the scheduleprovided by law. Net gifts of the amount of Php.100,000or less are exempt. Thus, if the value of the netgift is Php.150,000, only Php.50,000 is subjectto donor’s tax.
  • 51. FILING OF RETURN AND PAYMENT TAX1. When.- The donor’s tax return must be filed within 30 days after the gift is made and the tax due thereon paid at the same time.2. Where.- Except in the cases where the Commissioner of Internal Revenue otherwise permits, it must be filed with;
  • 52.  An authorized agent bank, or The revenue district officer, Revenue collection officer, or Duly authorized treasurer of the city or municipality where the donor was residing at the time of the donation, or If he is a non-resident, with the Office of the Commissioner.
  • 53. E. VALUE-ADDED TAX Value-added tax (VAT) is a percentage taximposed on every sale, barter, exchange, or leaseof goods or properties (real or personal) or saleof services in the course of trade or business, andon every importation of goods, whether or notin the course of trade or business, based on thegross selling price or value, or the gross receipts,payable by the seller, transferor, lessor, orimporter,
  • 54. NATURE OF THE TAX It is a tax not on goods, properties, orservices as such, but on the sale, barter,exchange, or lease of goods or properties, orperformance of service for a consideration, or onthe importation of goods. It is, therefore, aprivilege tax.
  • 55. TRANSACTIONS SUBJECT TO THE TAXExcept those specifically exempted by law, VATapplies1. Every sale of goods or properties, or importation of goods; and2. Every sale of service (which include lease of property) other than services rendered by persons subject to “other percentage taxes” under the tax code.
  • 56. Barter or exchange is considered by law asa sale. The importation of goods may be forbusiness purpose or for the personal use orconsumption of the taxpayer. But the sale ofgoods, properties, or services must be in thecourse of trade or business to be subject to VAT.
  • 57. RATES BASES OF THE TAX1. Sale of goods or properties.2. Importation of goods.3. Sale of services.
  • 58. RATES BASES OF THE TAX1. Sale of goods or properties. - The tax is 10% of the gross selling priceor gross value in money of the goods orproperties sold or bartered. Gross selling price is the total amount ofmoney or its equivalent which the purchaserpays or is obligated to pay the seller. Certainsales are exempt from the tax.
  • 59. RATES BASES OF THE TAX2. Importation of goods. - The tax is 10% of the total value used bythe Bureau of Customs in determining customsduties to which value shall be added the duties,excise taxes, and other charges due on suchgoods. Certain importations are exempt fromthe tax.
  • 60. RATES BASES OF THE TAX3. Sale of services. - the tax is 10% of the gross receiptsderived by any person (e.g., broker) engaged inthe performance of service for others for a fee orconsideration. Certain services are exempt fromthe tax. Gross receipts mean the total amount ofmoney or its equivalent representing thecontract price or fee for the service performed orto be performed for another person.
  • 61. TAX APPLIES ONLY TO VALUE ADDED BY SELLER Under the tax credit method forcomputing and collecting VAT, the taxpayerpays only the difference between the tax on hissales (output tax) and the tax on his purchases(or importation) of goods (for sale orconversion into other finished goods, or for usein the business), supplies, and materials, andservices (input tax).
  • 62. FILING OF RETURN AND PAYMENT OF TAX1. When.- The quarterly value-added tax return of gross sales or gross receipts for every quarter must be filed within 25 days following the end of each quarter. VAT- registered person shall pay the tax on a monthly basis.
  • 63. FILING OF RETURN AND PAYMENT OF TAX2. Where.- The quarterly return must e filed with and the tax paid to a: Duly authorized agent bank or The revenue district officer; Revenue collection officer; or Duly authorized treasurer of the city or municipality where the taxpayer is registered as a VAT-registered person or required to register.
  • 64. F. OTHER PERCENTAGE TAXES Percentage taxes are taxes based on acertain percentage of the gross selling price orgross value in money of goods sold, bartered,exchanged, or imported, or gross receipts orearnings derived by a person engaged in the saleof services.NOTE: Value-added tax is a kind of percentagetax. Services rendered by a person subject to the“other percentages taxes” imposed by the TaxCode are not subject to the value-added tax.
  • 65. PERSONS OR BUSINESS SUBJECT TO AND RATES OF OTHER PERCENTAGE TAXES1. Small business enterprises, i.e., those whose annual gross sales and/or receipts do not exceed Php.550,000,- 3% of gross quarterly sales or receipts.2. Domestic carriers by land, air or water and transport passengers for hire, and keepers of garages- 3% of gross receipts.
  • 66. 3. International carriers, air or shipping, doing business in the Philippines.- 3% of their gross quarterly receipts.4. Franchise holders or grantees in respect to franchises on radio and/or television broadcasting companies whose annual gross receipts of the preceding year do not exceed Php.10 million,- 3% of gross receipts, and on electric, gas, and water utilities- 2%.5. Senders of overseas messages.- 10% of the amount paid for the service.
  • 67. 6. Life insurance companies.- 5% of gross premium collected.7. Proprietors, lessees or operators of amusement places.- 15%, 18%, or 30% of gross receipts.8. Sale of shares of stock.- ½ of 1% (0.05), 4%, 2%, and 1% of gross selling price or gross value of the shares.NOTE: Banks and Finance companies are alsosubject to percentage taxes until December 31,1999when they shall be subject to value-added tax,unless otherwise provided by Congress.
  • 68. OVERSEAS COMMUNICATION TAXThe tax is imposed upon every overseas dispatchmessage or conversation transmitted from thePhilippines by telephone, telewriter exchange,wireless and other communication servicesequivalent to 10% on the amount paid for suchservices payable by the person paying for theservices rendered.
  • 69. TAX ON RECEIPTS OF LIFE INSURANCE COMPANIESThe tax is imposed on persons, companies orcorporations engaged in insurance business inthe Philippines equivalent to 2% of the totalpremiums collected. Certain premiumsmentioned by law are not included in the taxablereceipts.
  • 70. The law exempts from the tax purely cooperativecompanies or associations defined as those as areconducted by the members thereof with themoney collected from among themselves andsolely for their own protection and not forprofit. Agents of non-resident foreign insurancecompanies shall pay a tax equal to 10% of thetotal premiums received.
  • 71. AMUSEMENT TAXES1. Taxes on gross receipts. Taxes equivalent to 18% of the grossreceipts of cockpits, cabarets, and day or nightclubs; 10% in the case of boxing exhibitions; 15%in the case of professional basketball games; and30% in the case of race tracks and jai-alai,irrespective of whether or not any amount ischarged or pay for admission, collected fromevery proprietor, lessee, or operator of suchestablishment .
  • 72. AMUSEMENT TAXES2. Taxes on winnings. Taxes imposed on every person who winsin a horse race or jai-alai equivalent to 10% of hiswinnings or “dividends”. The same tax iscollected from the owners of winning racehorses.The amusement tax on admission to places ofamusement is now levied and collected by theprovinces and cities to the exclusion of nationalgovernment.
  • 73. TAX ON SALE OF SHARES OF STOCK1. Shares of stock listed and traded through the local stock exchange. The tax is ½ of 1% (0.05) based on thegross selling price or gross value in money of theshares other than the sale by a dealer in securities(i.e., one regularly engaged in selling securitieslike stocks, as a business).
  • 74. TAX ON SALE OF SHARES OF STOCK2. Shares of stock sold through initial public offering in closely held corporations. This is also based on the gross selling priceor gross value in money of the shares, inaccordance with the proportion of the sharessold to the total outstanding shares after thelisting in the local stock exchange at ratesprovided below: Up to 25%.................................... 4% over 25% up to 33 1/3%............... 2% over 33 1/3%................................. 1%
  • 75. FILING AND PAYMENT OF THE TAXES1. When.- The percentage tax return of gross sales, receipts or earnings for every quarter must be filed and the tax due thereon paid within 25 days after the end of each taxable quarter.
  • 76. FILING AND PAYMENT OF THE TAXES2. Where.- The quarterly return must be filed with and the tax paid to: An authorized agent bank, or The revenue district officer, Revenue collection officer or Duly authorized treasurer of the city or municipality where the business or principal place of business of the taxpayer is located.
  • 77. The taxpayer may file a separate return foreach branch or place of business or aconsolidated return for all branches or places ofbusiness.
  • 78. G. EXCISE TAX Excise Tax, as used in the Tax Code, aretaxes imposed on certain specified goodsmanufactured or produced in the Philippines fordomestic sale or consumption or for any otherdisposition and on goods imported into thePhilippines.NOTE: When classifying taxes according tosubject matter of object, the term “excise tax” or“privilege tax” is used to refer to a tax other thanpersonal tax and property tax.
  • 79. NATURE OF EXCISE TAX Excise Taxes subject directly the produceor goods to tax. They are, therefore, taxes onproperty.
  • 80. KINDS OF EXCISE TAXES1. Specific Tax. one imposed and based on weight, volumecapacity, length, number, or any other physicalunit.2. Ad valorem tax. one imposed and based on selling price orother specified value of the article.
  • 81. GOODS SUBJECT TO EXCISE TAXES1. In General - Excise Taxes apply: a. To goods manufactured or produced in the Philippines for domestic use or consumption or for any other disposition; and b. To goods imported from foreign countries.
  • 82. 2. In Particular – The Tax Code enumerates the goods subject to excise taxes, namely: a. Alcohol products b. Tobacco products c. Petroleum products d. Miscellaneous goods e. Mineral products
  • 83. FILING OF RETURN AND PAYMENT OF THE TAXES1. When - Unless otherwise specifically allowed the return shall be filed and the excise tax due shall be paid by the manufacturer or producer before removal of domestic products from the place of production. In the case of imported articles, the tax shall be paid by the owner or importer before release from the customs house, or by the non-exempt person in possession of the tax-exempt articles.
  • 84. FILING OF RETURN AND PAYMENT OF THE TAXES2. Where – Except as the Commissioner of Internal Revenue otherwise permits the return shall be filed with and the tax to: Any authorized agent bank or Revenue Collection officer, Duly authorized treasurer of the city or municipality where the taxpayer has his/its legal residence or principal place of business.
  • 85. H. DOCUMENTARY STAMP TAXES Documentary Stamp Taxes is a tax ondocuments, and papers evidencing theacceptance, assignment, sale or transfer of anobligation, right or property incident thereto.
  • 86. NATURE AND PURPOSE OF THE TAX It is a privilege tax because it is reallyimposed on transaction rather than ondocument. The document is only taxed becauseof the transaction. The purpose of the law in imposing stamptaxes is to raise revenue, and not to invalidatethe contract.
  • 87. EFFECT OF FAILURE TO STAMP TAXABLE DOCUMENT Such failure does not render the documentinvalid or void. But in such case, the followingshall be the effects:1. The document shall not be recorded or registered;2. Such document or any record or transfer of the same shall not be admitted or used in evidence in any court until the requisite stamp or stamps shall have been affixed thereon and cancelled.
  • 88. EFFECT OF FAILURE TO STAMP TAXABLE DOCUMENT3. No notary public or other officer authorized to administer oaths shall add his jurat or acknowledgement until the document is properly stamped; and4. The person who fails to affix the proper documentary stamps shall, for every violation, be liable in addition to the amount of tax required to be paid, an amount equivalent to 25% of such unpaid amount.
  • 89. FILING OF RETURN AND PAYMENT OF THE TAX1. By whom payable – The tax is payable by the person making, signing, issuing, accepting or transferring such obligation, right or property.2. When payable – The tax return shall be filed and the tax due shall be paid within 10 days after the close of the month when the taxable document was made, signed, issued, accepted or transferred.
  • 90. FILING OF RETURN AND PAYMENT OF THE TAX3. Where payable – The tax return shall be filed with and the tax shall be paid through: The authorized agent Bank, or the Revenue district officer; Revenue collection officer, or Duly authorized treasurer of the city or municipality where the taxpayer has his/its legal residence or principal place of business.
  • 91. DOCUMENTS SUBJECT TO THE DOCUMENTS NOT SUBJECT TO THE TAX TAX1. Debentures and certificates of 1. Insurance policies or annuities to indebtedness; members of fraternal societies;2. Original issue of shares and 2. Certificates of oath administered to stock; and certificates of acknowledgement by any government official in his official3. Sales contracts or agreements; capacity; 3. Statements and compulsory4. Bonds, loan agreements, information required by government promissory notes and bills of offices for statistical purposes and not exchange; for the benefit of the person filing the5. Insurance policies; same; 4. Affidavits of poor persons for the purpose proving property; and6. Powers of attorney; 5. Certificates of the assessed value of7. Leases, mortgages, and pledges. lands not exceeding Php.200.00 in assessed value, furnished to applicants for registration of title to land.
  • 92. I. CUSTOM DUTIES Custom Duties are taxes levied by agovernment on the importation or exportationof goods in or out of the country. Tariff, on the other hand, means a book ofrates; a schedule of fees imposed into a country.
  • 93. GOVERNING LAW AND ADMINISTRATIVE OFFICES The law governing tariff and customsduties is Presidential Decree No. 1464, otherwiseknown as the Tariff and Customs Code of 1978which consolidated and codified the tariff andcustoms law in the Philippines. the offices charged with the administrationand enforcement of the law are the Bureau ofCustoms and the Tariff Commission.
  • 94. CLASSIFICATION OF CUSTOM DUTIES1. Ordinary or regular custom duties, imposed and collected mainly as a sourceof revenue, namely: a. specific b. ad valorem2. Special custom duties, imposed and collected in addition to theordinary customs duties usually to protect localindustries from unfair competition.
  • 95. KINDS OF SPECIAL CUSTOMS DUTIES1. Dumping duty- imposed on certain imported articles which are being sold or are likely to be sold at a price lower than their home market price and which may injure or retard the establishment of an industry producing like goods in the Philippines.2. Countervailing duty- imposed on articles, upon the production, manufacture, or export which any bounty or subsidy is granted in the country of origin.
  • 96. KINDS OF SPECIAL CUSTOMS DUTIES3. Marking duty- imposed on imported articles and containers which have not been properly marked in any official language of the Philippines as to indicate the name of the country of origin of the article.4. Retaliatory or discriminatory duty- imposed upon articles of foreign country which discriminates against Philippine Commerce.
  • 97. J. TRAVEL TAXPURPOSE: The law was promulgated in line with “thepolicy of the Government to lessen therestriction on foreign travel”, “simplify travelregulations”, and at the same time, “to provideadequate funds for Government programs.”
  • 98. PERSONS LIABLE1. All Filipino citizens;2. Permanent resident aliens; and3. Non-immigrant ant aliens who have stayed in the Philippines for more than one year and are leaving the country, irrespective of the plane of issuance of ticket and the form and place of payment.SCHEDULE OF THE TAX1. Php.2,700.002. Php.1,620.003. Php.1,350.00 (for first class passage) and Php.810.00 (for economy class passage)
  • 99. PERSONS EXEMPTED Among others, the following may bementioned; Foreign diplomatic and consular officials; Crew members of ships and airplanes flying international routes; Infants who are two years old or less; Filipino overseas contract workers, officials, etc. of the United Nations Organization and its agencies Non-resident Filipino citizens; Bona fide students with government-approved scholarships, etc.
  • 100. K. ENERGY TAXPURPOSE: The tax is imposed in view of:1) The need to discourage the uneconomic consumption of fuel and2) The need for additional revenue to support economic development. The imposition is also in line with theGovernment’s energy and fuel conservationprograms.
  • 101. BASES OF THE TAX1. On aircraft – The tax is imposed on non- commercial helicopters and non-commercial fixed winged aircraft based on their gross weight in kilos.2. On watercraft – The tax is imposed on motorized speedboats, yachts, launches, and other watercrafts based on the length of the vessel.
  • 102. BASES OF THE TAX 3. On electric power consumption - The tax is imposed on the monthly electric power consumption of every residential customer of electric power utilities determined in accordance with the following schedule: MONTHLY KILOWATT-HOURS THA TAX SHALL BE CONSUMPTIONNot over 650 ExemptOver 650 but not over 1,000 Php.0.10 per KHW in excess of 1,000Over 1,000 but not over 1,500 Php.35.00 plus Php.0.20 per KHW in excess of 1,000Over 1,500 Php.135.00 plus Php.0.35 per KHW in excess of 1,500
  • 103. In areas outside Metro Manila where theprevailing electric power rates (excluding theenergy tax) are equal to or higher than the rates(including the energy tax) prevailing in MetroManila, the energy tax shall not apply; if less,then the energy tax to be imposed in the formershall be equal to the difference or the fullamount of the energy tax, whichever s lower.
  • 104. L. PRIVATE MOTOR VEHICLES TAXPURPOSE This tax is imposed by Executive OrderNo.43 which amended R.A. No. 4136, otherwiseknown as the “Land Transportation and TrafficCode,” as amended. The law was issued torationalize the structure of the tax on privatemotor vehicles by basing the same on ability topay of the owners thereof.
  • 105. SCHEDULE OF THE TAX VEHICULAR TYPEVehicle Light Medium Heavy Utility (0-601cc) (1601cc- (2801cc & (2700kg. 2800cc) Over) GW & below)AgeCurrent1 years old Php.1,000 Php.3,000 Php.6,000 Php.1,0002 years old 1,000 3,000 6,000 1,0003 years old 1,000 3,000 6,000 1,0004 years old 1,000 2,400 6,000 1,0005 years old 1,000 2,400 6,000 1,000Over 5 years 700 1,200 2,800 900old
  • 106. PREPARED BY: VICENTE, REYNEBERT B. BSEII-SST

Related Documents