Other Percentage Taxes

Percentage tax is a business tax which is based on a given

ratio between the gross sales or receipts and the burden
imposed upon the taxpayer. The percentage tax on sales
is based on a set ratio between the volume of the sales
and the amount of the tax. The person liable to pay the
overseas communications tax may not be engaged in
business.
Measurement of Percentage Tax
This kind of tax is usually measured by a certain percentage
of the gross selling price or gross receipts and is on the sale of
goods or services and not on their manufacture production or
importation

1.) If is not partake of the nature of a percentage tax on sales

or other taxes in any form based thereon,since the tax is
levied on the produced(whether sold or not) and not on the
sales.

2.) It is a tax on the business itself and the maximum annual

output capacity is not a percentage.
Tax Treatment of Shifted Percentage Tax
Percentage tax being an indirect tax, is shifted by the
service- provide to the service recipient.

1.) If the service-recipient is a taxpayer engaged in trade,

business/calling or profession.

2.)If the service-recipient is a taxpayer not engaged in

trade, business/calling or profession.
Percentage Taxes Imposed:

In addition to the value-added

tax(VAT) other percentage taxes are
imposed by the Tax Code on the
following persons or business.
B. Tax on a Small Business Enterprises
(Persons exempt from VAT)
Any person whose gross annual sales or receipts from
the sale.
Sale or lease of goods or properties or the performance
of services.
If a transaction is exempt from VAT, it is also exempt
from the 3% percentage tax imposed
A company engaged in the operation of a refreshment
parlor or eating place which also maintains a take-out
counter for its goods is, in affect, operating two lines of
business
Where the aggregate gross sales or receipts in the
taxable lines.
 Meaning of Gross Annual Sales
and/or Receipts

The term gross annual sales has no relation to profit

and means actual sales or receipts without deduction
of expenses.

Tax is paid on the basis of the gross sales and/or

receipts per quarter and not for one (1) complete year
or 12 months.
C. Tax on Carriers and Keepers of Garages
Persons liable and exempt from the tax

1.) Those liable are the following :

a. Cars for rent or hire driven by the lessee

b. Transportation contractors including persons who
transport passengers for hire
c. Other domestic carriers by land for the transport
of passengers
d. Keepers of garages
2.) The following are not subject to the tax imposed above:

a. Owners of bancas
b. Owners of animal-drawn two-wheeled vehicles
c. Other domestic carriers by land for the transport
of goods or cargoes
d. Domestic carriers by air or water for the transport
of passengers, goods or cargoes
 Kinds of Domestic Carriers
1.) A private carrier
2.) A common carrier
Rate and Basis of Tax
The tax is equivalent to 3% based on quarterly
gross receipts

1.) The term gross receipts refers to the whole or total

receipts as opposed to net receipts.

2.) It excludes receipts which have been specially earn market

by law or regulations for the government.

3.) Common carriers derived from their incoming and

outgoing freight shall not be subjected to the local taxes
 Tax on International Carriers
International carriers, whether air shipping, doing business
in the Philippines are liable to pay a tax of 3% of their gross
quarterly receipts

D. Tax on Franchises
Meaning of Franchise:

Franchise is a special privilege or right

conferred on an individual or corporation
by the state through the legislature
 The term may mean or refer to:
Corporate or primary franchise
Secondary or special franchise

Filling of Returns and Payment of Tax

The grantee shall fill the return with, and play the tax
due there on to the Commissioner of Internal Revenue

The returns of all franchise grantees and subject to the

tax shall be filled with and subject to audit by the Bureau
of Internal Revenue
E. Overseas Communications Tax
(Persons liable , rate and payment)

Upon every overseas dispatch, message or conversation

transmitted from the Philippines by telephone,
telegraph, telewriter exchange, wireless and other
communication equipment services, a tax of 10% shall
be collected on the amount paid for such services.

The person liable may not be engaged in any business.

 Exemptions from the Tax
The overseas communications tax shall not apply to:

Government
Diplomatic Services
International Organization
News Services
 F. Tax on Banks and Non-Banks
Financial Intermediaries
Under Rev. Regs No 9-2004, the terms enumerated hereunder, for the
purposes of the imposition of the gross receipts tax (GRT) on banks and
non-bank financial intermediaries performing quasi-banking functions,
shall have the following :

Financial Institutions
Banks or Banking Institution
Non-Bank Financial Intermediaries
Quasi-Banking Activities
Deposit Substitutes
Financial Companies
Financial Leasing
Operating Leasing
 Operating Lease
Interest Income
Securities
a. Government Securities
b. Private Securities
Gross Receipts
a. Financial Intermediation Service Fee
b. Financial Leasing income
c. Rentals on Properties, Real or Personal
d. Royalties
e. Commissions
f. Trust Fees
g. Estate Planning Fees
h. Service Fees
i. Other charges or fees received as compensations for
service
j. Net foreign exchange gains
k. Gain on sale or redemption of investments
l. Net gain from the sale of properties acquired
through foreclosure lodge of under the account
Real and Other Properties Owned and Acquired
m. All other receipts of gross income specified in
section 32(A) of the code (containing the general
definition of gross income and the items included
thereunder), not otherwise enumerated above