Professional Documents
Culture Documents
Exceptions:
1. Importation of goods for personal use
2. An overseas communication made (related to
business or not)
3. Single service rendered by a non-resident
alien in the Philippines (Sec. 105, NIRC)
4. Single winning in horse race or jai-alai
5. Sale of shares through local stock exchange
by one who is not a security dealer
6. Individual taxpayer whose gross
sales/receipts in any month during a 12month period do not exceed P100,000.
3. Excise tax
a) Manufacturer/importer of the ff:
i. Wines
ii. Distilled spirits and fermented liquors
iii. Cigars, cigarettes and tobacco
iv. Automobiles, fuels and oils, mineral
products and non-essential goods
Registration of business:
In general, a business should register before
the start of operation. It shall renew its
registration annually before the end of January.
Upon registration, the person must pay an
annual registration fee in the amount of P500 for
every separate or distinct establishment or place
of business, before the start of such business
year thereafter on or before the 31st day of
January. (Sec. 236, NIRC)
Exempt from registration fee:
1. Individual earning purely compensation income;
2. Overseas workers;
3. Subsistence livelihood earner;
4. Cooperatives
Characteristics:
1. It is a tax on transactions.
2. It is an indirect tax.
3. It is a tax on value added of the taxpayer.
4. It is a transparent form of sales tax.
4. It is a broad-based tax on consumption of
goods, properties or services in the
Philippines.
5. It is collected through the tax credit
method.
6. It does not cascade (tax on tax).
7. It adopts the tax-inclusive method.
8. It follows the Destination Principle/Cross
Border Principle. (Toshiba Information Equipment Inc.
Vs. CIR, 9 March 2010)
(b)
Input tax
(c)
Total
(d)
Price charged
(e)
Output
tax
(f)
Total
(g)
VAT
payable
P10
P1.20
P11.20
P1.20
2nd
Seller
P10
P1.20
P11.20
P40
P4.80
P44.80
P3.60
3rd
Seller
P40
P4.80
44.80
P60
P7.20
P67.20
P2.40
4th
Seller
P60
P7.20
67.20
P90
P10.80
P100.80
P3.60
Consum
er
P90
P10.80
100.80
1st Seller
On
On
On
On
Tax Base:
5. Gross selling price includes the selling price
and all incidental expenses charged by the
seller to the buyer except VAT sales returns,
discounts and allowances. (see Sec. 106, NIRC)
6. Gross receipts all money actually or
constructively received. (read Sec. 108, NIRC)
Persons liable
Any person who, in the course of trade or business
Non-VAT Registration.
The following are not required to register VAT
as a tax type:
1) Those persons subject to other percentage
taxes under Title V of the Code, as amended;
2) Those whose transactions are VAT-exempt as
enumerated under Section 109 of the Code, as
amended.
3) Marginal Income earners as herein defined.
Exempt:
- VAT shall not apply to goods or properties
which are originally intended for sale or for use
in the course of business existing as of the
occurrence of the following as they are mere
changes in form and not in substance.
1) Change of control of a corporation
Zero-Rated Transactions
Zero-rated sale - It is a sale, barter or
exchange of goods, properties and/or services
subject to 0% VAT pursuant to Sections 106
(A) (2) and 108 (B) of the Tax Code. It is a
taxable transaction for VAT purposes, but shall
not result in any output tax. However, the input
tax on purchases of goods, properties or
services, related to such zero-rated sales, shall
be available as tax credit or refund in
accordance with RR No. 16-2005.
Commissioner of Internal Revenue v. Seagate Technology
(Philippines), G. R. No. 153866, February 11, 2005 and
Commissioner, of Internal Revenue v. American Express
3. Sale or importation of
a. Agricultural and marine food products in
their original state, livestock and poultry of a
kind generally used as, or yielding or producing
foods for human consumption; and breeding
stock and genetic materials therefor;
b. Fertilizers; seeds, seedlings and fingerlings;
fish, prawn, livestock and poultry feeds,
including ingredients, whether locally produced
or imported, used in the manufacture of
finished feeds (except specialty feeds for race
horses, fighting cocks, aquarium fish, zoo
animals and other animals generally considered
as pets);
5. Services of
a. agricultural contract growers and milling for
others of palay into rice, corn into grits and
sugar cane into raw sugar;
b. Medical, dental, hospital and veterinary
services except those rendered by
professionals;
c. Educational services rendered by private
educational institutions, duly accredited by the
Department of Education (DEPED), the
Commission on Higher Education (CHED), the
Technical Education And Skills Development
Authority (TESDA) and those rendered by
government educational institutions;
Value
100% Custom
Duties
10%
Excise Tax
12%
VAT
1. Domestic Purchase
800
2. Imported goods
250
3. Expenses
Business taxes (250+50)
200
300
(24)
2,000
240
4. Sales
5. Income before income tax
(2,000-800-250-200-300)
450
6. Income tax
135
315
30% Income
Tax
(96)
250
50
(66)
135
250
50
54
489
135
DOMESTIC:
3% CCT - Transporting passengers by land
12% VAT - Transporting passengers by air/sea;
- Transporting goods/cargoes by
land, air or sea
0% VAT - Transporting passengers,
goods/cargoes by air or sea from
the
Philippines to other countries
INTERNATIONAL:
3% CCT - International air and shipping
carriers doing business in the Philippines. (Tax
Base: RR No. 11-2011) *subject to reciprocity
not subject percentage tax shipments
originating from a place other than the
Philippines to a point of destination other than
the Philippines
subject to percentage tax pro rata only the
first destination - shipments originating from
the Philippines to a point outside the Philippines
Franchise Tax
Amusement Tax
Tax Rates:
Boxing exhibition
-10%
Cockpits, night clubs or cabarets -18%
Professional basketball
-15%
Jai-alai and race tracks
-30%
Basis: gross receipts
- which includes income from television,
radio, and motion pictures rights
Persons liable: operator, proprietor or lessee of
amusement places where amusement activities
conducted.
Exemption:
Boxing exhibition where world or Oriental
championship title in any division is at stake
provided one of the contenders is a citizen of
the Philippines and said exhibition is promoted
by citizen/s of the Philippines or a corporation
where 60% of its capital is owned by Filipino
citizens.
Tax on Winnings
- applicable on winnings on horse race or jai-alai only
Sales
P100,000
Add: VAT
12,000
Total
112,000
Less: Final withholding VAT P5,000
CWIT on sales
1,000
6,000
Net amount
P106,000
Since the final withholding VAT is only 5%,
the remaining 7% shall effectively account as
standard input VAT for sales of goods or
services to the government, in lieu of the actual
input VAT directly attributable or ratable
apportioned to such sales.
EXCISE TAX
Person liable:
1. By the person making, signing, issuing, accepting
or transferring the documents.
2. Whenever one party to the taxable document is
exempted from tax, the other party who is not
exempted shall be liable to pay for the DST.