LY

O N
SE
’ U
T S
A N
Tax Reform for Acceleration I P
I C
and Inclusion (TRAIN) R T
March 15, 2018 PA
A R
I N
E M
S
M C
S M
P A
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 LY
O N
SE
’ U
T S
Issues that drive A N
the tax reform IP
I C
R T
PA
A R
IN
M
SE
C
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P A
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 Issues that drive the tax reform Y
NL
O
SE
Personal Income Tax ’ U
1 employed and professionals
P AN
S
High rates yet very narrow base amongTself-

C I
Corporate Income TaxI
2 R T
Incentives that are not time-bound leads to
inequity
R
PA
N A
I
Value Added Tax
3 E M
Too many exemptions and zero-ratings
C
S
Capital Income Tax
M
4 PA S M High rates for poor, low rates for the rich

I C Proposed DOF Tax Reform Program

P
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 Redesign of the tax system Y
NL
O
SE
’ U
T S
A N
I P
I C
Simpler R T
PA
A R
I N
M Tax
SE System
C
SMM More
PA
Fairer
Efficient
I C
P
O R
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 TRAIN – First package LY
Overview O N
SE
’ U
Excise Tax
T S Increase in
on
A
CosmeticN Excise Tax on
Petroleum
IP
Procedures and
Excise Tax I C Automobiles
Personal
Income R T
on Sugar-

PA
Reduce Sweetened
Tax Beverages
Donor’s
Reform
VAT and and EstateA R
DST Tax IN
M
SE
Reform

C
SMM
P A
IC
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 LY
O N
SE
’ U
T S
Personal income tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
IC
P
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 Personal income tax Y
General NL
O
SE
’ U
1 T
Adjust brackets to correct “incomeNcreeping”
I P A
S

I C
T R
A
Reduce PIT max rate toP25% over time
2 except for highest income
M I N A R earners

S E
M C
3 Shift to
P A
M
S a modified gross system to simplify PIT
I C Proposed DOF Tax Reform Program
P
O R
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 Personal income tax Y
Individual citizens and resident aliens NL
O
OLD LAW SE
’ U
1
Income Bracket
0 -, 10,000 0,, 5%
Tax Rate
T S
2 Over 10,000 -, 30,000 500 +, N
10% of the excess over 10,000
A
3 Over 30,000 -, 70,000 2,500 +,
P
15% of the excess over 30,000
I
4 Over 70,000 -, 140,000 8,500 +,
C
20% of the excess over 70,000
I
5
6
Over
Over
140,000 -,
250,000 -,
250,000
500,000
22,500 +,
R
50,000 +,
T 25% of the excess over 140,000
30% of the excess over 250,000
7 Over 500,000
PA
125,000 +, 32% of the excess over 500,000

TRAIN: 2018 to 2022

A R
Income Bracket I N Tax Rate
M
SE
1 0 -, 250,000 0,,
2 Over 250,000 -, 400,000 0 +, 20% of the excess over 250,000
3 Over C
400,000 -, 800,000 30,000 +, 25% of the excess over 400,000

MM
4 Over 800,000 -, 2,000,000 130,000 +, 30% of the excess over 800,000
5 Over 2,000,000 -, 8,000,000 490,000 +, 32% of the excess over 2,000,000
6 Over S 8,000,000 2,410,000 +, 35% of the excess over 8,000,000
P A
I C
Point of indifference
PTaxable income: P11.8 million Income tax: P3.8 million

O R
F Page 8
 Personal income tax Y
Individual citizens and resident aliens NL
O
Comparison of Tax Due
SE
(OLD LAW vs TRAIN 2018 to 2022)
’ U
T S
A N
IP
P3,751,667
I C
R T
PA
Income Tax Due

A R
I N
M
SE
C
SMM
P A P11,833,333
I C Taxable Income
P
R
Old law TRAIN 2018 to 2022

FO Page 9
 Personal income tax Y
Individual citizens and resident aliens NL
O
OLD LAW SE
’ U
1
Income Bracket
0 -, 10,000 0,, 5%
Tax Rate
T S
2 Over 10,000 -, 30,000 500 +, N
10% of the excess over 10,000
A
3 Over 30,000 -, 70,000 2,500 +,
P
15% of the excess over 30,000
I
4 Over 70,000 -, 140,000 8,500 +,
C
20% of the excess over 70,000
I
5
6
Over
Over
140,000 -,
250,000 -,
250,000
500,000
22,500 +,
R
50,000 +,
T 25% of the excess over 140,000
30% of the excess over 250,000
7 Over 500,000
PA
125,000 +, 32% of the excess over 500,000

TRAIN: 2023 Onwards

A R
Income Bracket I N Tax Rate
M
SE
1 0 -, 250,000 0,,
2 Over 250,000 -, 400,000 0 +, 15% of the excess over 250,000
3 Over
C
400,000 -, 800,000 22,500 +, 20% of the excess over 400,000

MM
4 Over 800,000 -, 2,000,000 102,500 +, 25% of the excess over 800,000
5 Over 2,000,000 -, 8,000,000 402,500 +, 30% of the excess over 2,000,000
6 Over S 8,000,000 2,202,500 +, 35% of the excess over 8,000,000
P A
I C
Point of indifference:
PTaxable income: P18.75 million Income tax: P5.965 million

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 Personal income tax Y
Individual citizens and resident aliens NL
O
Comparison of Tax Due
SE
(OLD LAW vs TRAIN 2023 onwards)
’ U
T S
A N
IP
P5,965,000
I C
R T
PA
Income Tax Due

A R
I N
M
SE
C
SMM
P A P18,750,000
I C Taxable Income
P
R
Old law TRAIN 2023 onwards

FO Page 11
 Personal income tax Y
Nominal Tax Savings / Losses (OLD LAW vs. TRAIN) NL
O
350,000
SE
Tax Savings / Losses

U
322,500
’
300,000
T S
A N 262,500

250,000 I P
I C
R T 202,500

PA
200,000

A R
150,000
I N 118,500
M
100,000
SE 115,000 115,000

C 72,500
91,000

50,000
SMM 50,000
65,000
55,000

P A
22,500 Taxable Income Level
-
IC
P140,000 250,000 400,000 800,000 2,000,000 8,000,000 10,000,000

O R Savings/(Losses) OLD LAW vs. TRAIN: 2018 to 2022 Savings/(Losses) OLD LAW vs. TRAIN: 2023 Onwards

F Page 12
 Personal income tax Y
Effective Tax Savings / Losses (OLD LAW vs. TRAIN) NL
O
25.00%
SE
Tax Savings / Losses

’ U
T S
20.00% 20.00%
18.13% A N
I P
I C
15.00%
16.07% 16.25% 14.81%
R T
PA
N AR 11.38% 10.13%
10.00%

M I
SE
5.00% C 5.75%
4.03%

SMM 2.63%

PA
1.44%
Taxable Income Level 0.55%
0.00%

I C
140,000 250,000 400,000 800,000 2,000,000 8,000,000 10,000,000
P
Savings/(Losses) OLD LAW vs. TRAIN: 2018 to 2022 Savings/(Losses) OLD LAW vs. TRAIN: 2023 Onwards

O R
F Page 13
 Personal income tax Y
Revised withholding tax table (RMC No. 105-2017) NL
O
TRAIN: 2018 to 2022 SE
’ U
REVISED WITHHOLDING TAX TABLE
T S
DAILY 1
Effective January 1, 2018 to December 31, 2022
2 3 4
A N 5 6
P
CI
Compensation Level (CL) 685 and below 685 1,096 2,192 5,479 21,918

TI
Prescribed Minimum 0 0 +20% over 82.19 + 25% 356.16 + 30% 1,342.47 + 6,602.74 +
Withholding Tax CL over CL over CL 32% over CL 35% over CL
WEEKLY 1 2
A
3 R 4 5 6
Compensation Level (CL) 4,808 and below 4,808 P 7,692 15,385 38,462 153,846

Prescribed Minimum A R
0.0 0 +20% over 576.92 + 25% 2,500.00 + 9,423.08 + 46,346.15 +
Withholding Tax
IN CL over CL 30% over CL 32% over CL 35% over CL
SEMI-MONTHLY 1
M 2 3 4 5 6
Compensation Level (CL)
SE
10,417 and below 10,417 16,667 33,333 83,333 333,333

Prescribed Minimum C 0.0 0 +20% over 1,250 + 25% 5,416.67 + 20,416.67 + 100,416.67 +

MM
Withholding Tax CL over CL 30% over CL 32% over CL 35% over CL
MONTHLY
S 1 2 3 4 5 6

PA
Compensation Level (CL) 20,833 and below 20,833 33,333 66,667 166,667 666,667

I C
Prescribed Minimum 0.0 0 +20% over 2,500 + 25% 10,833.33 + 40,833.33 + 200,833.33 +
P
Withholding Tax CL over CL 30% over CL 32% over CL 35% over CL

O R
F Page 14
 Personal income tax Y
Minimum wage earners NL
O
Illustration SE
’ U
S He is
Mr. CSO, a minimum wage earner, works for G.O.D.,TInc.
N of
neither engaged in business nor has any other source
A
income other than his employment. For 2018,IP
Mr. CSO earned a
total compensation income of P135,000.TIC
A R
Mr. CSO contributed to the P PhilHealth,
SSS, and HDMF
A R 13 month pay of P11,000.
amounting to P5,000 and received th

IN
Computation of taxable income
M
S E
M C
Total Compensation P135,000
Less: Mandatory contribution P5,000
M
S Non-taxable benefits 11,000 16,000
P A
Taxable Income P119,000
I C since MWE
P
Exempt
O R
F Page 15
 Personal income tax Y
Minimum wage earners NL
O
Illustration SE
’ U
T S
The following year, Mr. CSO earned, aside from
NA his basic wage,
additional pay of P140,000 which consists of I Povertime pay –
I
P80,000, night shift differential – P30,000, Chazard pay – P15,000,
and holiday pay – P15,000. He has the R Tsame benefits and
contributions above. PA
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 16
 Personal income tax Y
Minimum wage earners NL
O
Illustration SE
’ U
T S
Computation of tax due A N
I P
Total Compensation
I C P135,000
T
Add: Overtime, night shift differential,
R
hazard, and holiday payPA 140,000
Total Income
A R P275,000
I N
Less: Mandatory contributions P5,000
M
Non-taxableEbenefits 11,000 16,000
Taxable Income S P259,000
M C
Tax DueS M EXEMPT
Exempt P Asince MWE
I C
P
O R
F Page 17
 Personal income tax Y
Self-employed and/or professionals NL
O
OLD LAW SE
’ U
NO SPECIFIC PROVISION T S
A N
IP
EFFECTIVE 2018 I C
R T
GROSS SALES A
OR P
Y
A
GROSS RECEIPTSR > P3M N

Graduated I N
M Option
SE
income tax rates

MC
S M 8% income tax Graduated
income tax
P A (in excess of P250,000) rates
I C
P
O R
F Page 18
 Personal income tax Y
8% income tax (RR No. 8-2018) NL
O
SE
Tax base (gross sales and other non-operating income)
’ U
T S
A N
Gross sales I P
I C
T
Total sales transactions net of VAT (if applicable)
R
P A
Sales returns and allowances
R
D
N A
E
M I
Determined and granted at date of sale
D
U S EExpressly indicated in invoice
Discounts
C
M C Forms part of gross sales record
T
SM Not dependent on happening of future event
P A
I C any other deductions
Before
P
O R
F Page 19
 Personal income tax Y
8% income tax (RR No. 8-2018) NL
O
SE
’
Tax base (gross receipts and other non-operating income) U
T S
A N
I P
Actual or constructive collections
excluding VATTIC
A R
Contract price P
Compensation Service fee
A R
I N charged
EMfor materials
Amount Deposits and
Rental or royalty advance
S supplied payments
C
S MM
P A
IC
P
O R
F Page 20
 Personal income tax Y
8% income tax (RR No. 8-2018) NL
O
SE
Election of 8% income tax
’ U
T S
A N
P
I
First quarter I C
FirstTquarter
percentage
tax return A R tax
income
P
A R
I N
M
SE
Initial quarter
Irrevocable for
C after
MM
taxable year
commencement
(no
S of business/
amendment
P A practice of
allowed)
IC profession
P
O R
F Page 21
 Personal income tax Y
8% income tax (RR No. 8-2018) NL
O
SE
VAT threshold breached within the year
’ U
T S
A N
GROSS SALES
IP
OR
I C
T
GROSS RECEIPTS > P3M
R
PA
A R
Subject to graduated
IN
income tax rates
M
SE
C
SMM Claim 8% income tax paid
as credits
P A
IC
P
O R
F Page 22
 Personal income tax Y
8% income tax (RR No. 8-2018) NL
O
SE
Other requirements ’ U
T S
A N
IP
FS attachment to ITR
I C
R T
PA Graduated
8% income tax
A R income tax rates
IN
M
SE VAT threshold
C breached?

SMM
Not required
N Y

P A FS Audited FS
IC
P
O R
F Page 23
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
Ms. EBQ operates a convenience store while sheN offers
A
P gross sales
bookkeeping services to her clients. In 2018,Iher
IC
amounted to P800,000, in addition to herTreceipts from
bookkeeping services of P300,000. She
A Ralready signified her
intention to be taxed at 8% incomePtax rate in her 1st quarter
return. AR
N
M I
SE
C
SMM
P A
IC
P
O R
F Page 24
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
Computation of tax due T S
A N
Gross Sales – Convenience Store IP P800,000
I C
Gross receipts – Bookkeeping
R T 300,000
Total Sales/Receipts
P A P1,100,000
R
Less: Amount allowed as deduction
A
under Sec. 24(A)(2)(b) IN P250,000
Taxable Income M P850,000
SE
Tax Due M
C
8% of S M
P850,000 P68,000.00
P A
C
I from 3% percentage tax
Exempt
P
O R
F Page 25
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
Ms. EBQ above, failed to signify her intention to be N taxed at 8%
A Income
P
income tax rate on gross sales in her initial Quarterly
I
Tax Return, and she incurred cost of salesIC and operating
R T
expenses amounting to P600,000 and P200,000, respectively, or
a total of P800,000. PA
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 26
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
Computation of tax due
A N
IP
I C
Gross Sales/Receipts T
P1,100,000
R 600,000
Less: Cost of sales A
P P500,000
Gross Income
Less: Operating Expenses A
R 200,000
I N
Taxable Income M P300,000
SE
Tax Due M C
M
On excess (P300,000 – P250,000) x 20%
S P10,000.00

P A
I C also to 3% percentage
Liable
P
O R
F Page 27
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
Mr. JMLH signified his intention to be taxed at 8% income tax rate on
N
gross sales in his 1st Quarterly Income Tax Return. He has no other
A
IP
source of income. His total sales for the first three (3) quarters
I C
amounted to P3,000,000 with 4th quarter sales of P3,500,000.
R T
► Computation of taxable income PA
A R
1st Quarter 2nd
INQuarter 3rd Quarter 4th Quarter
M
SE
Total sales P500,000 P500,000 P2,000,000 P3,500,000
Cost of Sales 300,000 300,000 1,200,000 1,200,000
C
MM
Gross Income P200,000 P200,000 P800,000 P2,300,000
S
Operating exp. 120,000 120,000 480,000 720,000

P A
Taxable Income P80,000 P80,000 P320,000 P1,580,000
IC
P
O R
F Page 28
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
Computation of tax due T S
Total Sales P6,500,000 A N
Less: Cost of Sales I P
3,000,000
I C
Gross Income
R T
P3,500,000
Less: Operating Expenses
PA P2,060,000
1,440,000
Taxable Income R A
I N
Income Tax Due
E M P509,200
S
Tax Due under the graduated rates
C
M tax previously paid (Q1 to Q3)
Less: 8% income
SM
(P3,000,000 – P250,000) x 8% 220,000
PAIncome Tax Payable
Annual
C
P289,200
P I
O R
F Page 29
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
A N
Ms. RSPV is a prominent independent contractorI P who offers
I
architectural and engineering services. SinceC her career
R T to P4,250,000 for
flourished, her total gross receipts amounted
taxable year 2018. Her recorded costPAof service and operating
R
expenses were P2,150,000 andAP1,000,000, respectively.
I N
E M
S
M C
S M
P A
I C
P
O R
F Page 30
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
A N
Gross Receipts – (Architectural and Engineering Services) P4,250,000
IP
Less: Cost of Service
I C 2,150,000
Gross Income
R T P2,100,000
Less: Operating Expenses
PA 1,000,000
Taxable Income
A R P1,100,000
IN
Tax Due M
On P800,000.00 SE P130,000
C
On excess (P1,100,000 – P800,000) x 30% 90,000
Income Tax Due
SMM P220,000
A
Subject also to VAT
P
IC
P
O R
F Page 31
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
T S
In 2018, Mr. GCC owns a nightclub and videokeA N with gross
bar,
sales/receipts of P2,500,000. His cost of salesI Pand operating
I C
T
expenses are P1,000,000 and P600,000, respectively, and with
non-operating income of P100,000. AR
P
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 32
 Personal income tax Y
Self-employed and/or professionals NL
O
Illustration SE
’ U
Computation of tax due T S
Gross Sales A N P2,500,000
IP
Less: Cost of Sales
I C 1,000,000
Gross Income R T P1,500,000
Less: Operating Expenses PA 600,000
Net Income from Operation R P900,000
N A
I
Add: Non-operating Income 100,000
Taxable Income
SEM P1,000,000

Tax Due MC
S M
On P800,000.00 P130,000
A
OnPexcess (P1,000,000 – P800,000) x 30% P60,000
IC
Income Tax Due
P P190,000

O R
F Page 33
 Personal income tax Y
Mixed income earners NL
O
EFFECTIVE 2018 SE
’ U
MIXED INCOME EARNER T S
A N
IP
Compensation
Business T I C
Income
Income
A R
P
RGROSS SALES
NA
Graduated
OR
income tax rates I
M GROSS RECEIPTS > P3M
SE
Y N

M C Graduated
income tax rates
Option
SM
CPA 8% income tax
Graduated
income tax
P I rates

O R
F Page 34
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
A N
I
Mr. MAG, a Financial Comptroller of JAB Company,P earned
annual compensation in 2018 of P1,500,000, I Cinclusive of 13th
month and other benefits in the amount R Tof P120,000 but net of
mandatory contributions to SSS and PAPhilHealth. Aside from
employment income, he ownsAaR convenience store, with gross
I
sales of P2,400,000. His costNof sales and operating expenses
E M respectively, and with non-
are P1,000,000 and P600,000,
operating income of S
P100,000.00.
MC
S M
P A
I C
P
O R
F Page 35
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
A N
Option adopted: 8% income tax on business tax
IP
I C
Total compensation income R T P1,500,000
PA
Less: Non-taxable 13th month pay and other benefits (max) P90,000
Taxable Compensation Income
A R P1,410,000
IN
M
SE
Tax Due:
On Compensation
C
MM
On P800,000.00 P130,000
On excess (P1,410,000 – P800,000) x 30%
S 183,000

P A
Tax Due on Compensation Income P313,000
IC
P
O R
F Page 36
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
Continuation:
A N
On Business Income P
I
Gross Sales C
I P2,400,000
Add: Non-operating Income R T 100,000
Taxable Business Income PA P2,500,000
Multiplied by: Income tax rate A R 8%
Tax Due on Business Income I N P200,000
E M
S
M C
Total Income Tax Due(Compensation and Business) P513,000.00

S M
P A
I C
P
O R
F Page 37
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
Option adopted: Graduated income tax rates
A N
IP
Total compensation income I C P1,500,000
R T
Non-taxable 13th month pay and other benefits (max) P90,000
Taxable Compensation Income PA P1,410,000
Add: Taxable Income from Business
A R
Gross Sales IN P2,400,000
Less: Cost of Sales M 1,000,000
Gross Income SE P1,400,000
C
MM
Less: Operating Expenses 600,000
Net Income from Operation P800,000
S
PA
Non-operating Income 100,000 900,000.00
I C
Total Taxable Income P2,310,000.00
P
O R
F Page 38
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
Continuation: A N
Tax Due I P
I C
On P2,000,000.00
R T P490,000
P A x 30%
On excess (P2,310,000 – P2,000,000) 99,200
Total Income Tax R A P589,200
I N
•
EMof P72,000 (3% x P2,400,000)
Liable to 3% percentage
S
C
SMM
P A
IC
P
O R
F Page 39
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
U’
On February 2019, taxpayer tendered his resignation T Sto
A
concentrate on his business. His total compensation
N income
amounted to P150,000, inclusive of benefits IofP P20,000. His
I Cremains the same. He
opted for the 8% income tax rate. R T
business operations for taxable year 2019

Computation of tax due PA

Total compensation income A R P150,000
I N
Less: Non-taxable benefits 20,000
M
SE Income
Taxable Compensation P130,000

M C
Tax Due
S M
A
On Compensation
P
On
I C P130,000 (not over P250,000.00) P0.00
P
O R
F Page 40
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
A N
P
I
On Business Income I C
Gross Sales R T P2,400,000
Add: Non-operating IncomePA 100,000
Taxable Business Income
A R P2,500,000
I
Multiplied by: Income Ntax rate 8%

S EM Income
Tax Due on Business P200,000
C
M (Compensation and Business)
Total Income Tax Due P200,000.00
S M
P A
I C
P
R
FO
Page 41
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
Mr. WBV, an officer of AMBS International Corp., A N
earned in 2018
an annual compensation of P1,200,000, inclusiveI P of the 13th
month and other benefits in the amount T I C
of P120,000. Aside from
employment income, he owns a farm, A R
with gross sales of
P
P3,500,000. His cost of sales and operating expenses are
A R
P1,000,000 and P600,000, respectively, and with non-operating
income of P100,000. I N
M
SE
C
SMM
P A
IC
P
O R
F Page 42
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
T S
Total compensation income A N P1,200,000
IP
I C
Less: Non-taxable 13th month pay and other benefits (max) P90,000
Taxable Compensation Income
R T P1,110,000

PA
Add: Taxable Income from Business
Gross Sales
A R P3,500,000
Less: Cost of Sales
IN 1,000,000
Gross Income M P2,500,000
SE
Less: Operating Expenses 600,000
C
Net Income from Operation P1,900,000

SMM
Non-operating Income 100,000 2,000,000

P A
Total Taxable Income P3,110,000

IC
P
O R
F Page 43
 Personal income tax Y
Mixed income earners NL
O
Illustration SE
’ U
Tax Due T S
On P2,000,000.00 A N P490,000
IP
On excess (P3,110,000.00 – P2,000,000.00) x 32%
I C 355,200
Total Income Tax
R T P845,200

PA
A R
No option to avail 8% incomeN
• tax
M I
VAT exempt (farming business)
•

S E
M C
S M
P A
I C
P
O R
F Page 44
 Personal income tax Y
Exemptions NL
O
SE
U
’
Individual Individual S
TNRAETB
resident
aliens
citizens
A N
IP
I C
R T
PA
A R
I N
M
SE Basic
C personal

S MM and
additional
P A exemptions
IC
P
O R
F Page 45
 Personal income tax Y
Benefits NL
O
SE
OLD LAW TRAIN
’ U
T S
AN
I P
Grossed up IC Grossed up
Monetary value of
fringe benefits
at 68% AR
T at 65%
P
A R
I N
M
Fringe benefits SE
C 32% FBT 35% FBT
MM
tax
S
P A
IC
P
O R
F Page 46
 Personal income tax Y
Benefits NL
O
SE
OLD LAW TRAIN
’ U
T S
AN
I P
I C
R T
PA
13th month pay and A R
other benefits 82,000
I N 90,000
S EM
C
SMM
P A
IC
P
O R
F Page 47
 Personal income tax Y
Benefits NL
O
Illustration #1 SE
’ U
S
MRU Company (a domestic employer/company) granted Ms. MHLCO (a Filipino
T
N
branch manager employee), in addition to her basic salaries, P5,000 cash per
A
P
quarter for her personal membership fees at Country Golf Club.
I
I C
Computation of FBT R T
PA
A R
Monetary value of fringe benefit P5,000.00
IN
Percentage divisor applicable 65%
M
SE
FBT rate 35%

C
MM
FBT = (Monetary value of fringe benefit / 65%) x 35%
S
FBT = (P5,000 / 65%) x 35%

P A
FBT = P7,692.31 x 35%
IC FBT = P2,692.31
P
O R
F Page 48
 Personal income tax Y
Benefits NL
O
Illustration #2 SE
U
’
Using the same facts but the employee is a non-resident T S alien
individual not engaged in trade or business within A Nthe Philippines
I P
I C
Computation of FBT R T
PA
R
Monetary value of fringeAbenefit P5,000.00
I N
Percentage divisor applicable 75%
FBT rate E M 25%
S
M C
FBT = (Monetary value of fringe benefit / 75%) x 25%
FBTS=M (P5,000 / 75%) x 25%
P A = P6,667.67 x 25%
FBT
I C FBT = P1,667.67
P
R
FOPage 49
 Personal income tax Y
Income tax exemptions NL
O
SE
U
’
Old law S
TTRAIN
P C S O PAN
AND
C I ≤P10,000:
T I
L O T TARO Exempt
Exempt P
R
A
Winnings
N >P10,000:
I
S EM 20% Final
C Tax
SMM
P A
IC
P
O R
F Page 50
 Personal income tax Y
Premium payments on health and/or hospitalization insurance NL
O
SE
’ U
OLD LAW S
TRAIN
T
A N
IP
I C
P2,400/annum R T
or P200/mo PA Removed
N AR
(Family gross M I
income ≤
E
S Premium
P250,000) M
C
SM
P A
I C
P
O R
F Page 51
 Personal income tax Y
Passive income NL
O
SE
’ U
OLD S
N T7.5%
Interest LAW A
from FCD IP
I C
RT
systems TRAIN 15%
PA
A R
IN
M
SE
5% - first P100,000
Capital OLD 10% - in excess of
Gains C LAW P100,000

(stocks not
S MM
A
traded in stock
P
exchange)
TRAIN 15%
IC
P
O R
F Page 52
 Personal income tax Y
Preferential tax rate NL
O
SE
’
Removal of 15% preferential tax rate effective JanuaryU1,
2018
N TS
Non-resident aliensIP
A
I C
R T
PA Petroleum
RAHQ A Rand service
OBUs I N
ROHQ contractor
x and
E M subcontractor
S
C
MM
S
P A
Subject already to the graduated income tax rates
I C
P
O R
F Page 53
 Personal income tax Y
Preferential tax rate NL
O
Qualified Employees SE
OBUs, ROHQ/RAHQ, Petroleum service ’ U
contractor and subcontractor
T S
A N
IP
RegisteredI C
R
after T
Jan A
P 1, 2018
Yes A R
N No
M I
SE
?
Graduated income tax
C rates
Graduated income

MM
tax or 15% preferential
S tax rate
P A
IC Issue due to veto
P
O R
F Page 54
 Personal income tax Y
Preferential tax rate (RR No. 8-2018) NL
O
SE
All employees ’ U
T S
A N
OBUs,
ROHQ/RAHQ, ICI
P
Petroleum T
serviceAR
P and
contractor
AR
subcontractor
N
M I
S E
Graduated income tax rates
C
No MM
S longer subject to 15% preferential tax
P A
IC Veto of 15% preferential tax
P
O R
F Page 55
 Personal income tax Y
Preferential tax rate NL
O
Illustration SE
U
’is a
Ms. CCF, an alien employed in MCUD Corporation that
T S
N
Petroleum Service Contractor, received compensation income
PAth month pay and
of P5,000,000 for 2018, inclusive of P400,000I13
other benefits.
T IC
Compensation income A R P5,000,000
P
th
Less: Non-taxable 13 month pay
A Rand other benefits (max) P90,000
Taxable Compensation Income
I N P4,910,000

E M
Tax Due: S
M C
On P2,000,000.00 P490,000

S M (P4,910,000 – P2,000,000) * 32%

On excess 931,200

P A
Total Tax Due P1,421,200

I C
P to graduated income tax rates
Subject
O R
F Page 56
 Personal income tax Y
Optional standard deduction (RR No. 8-2018) NL
O
Basis Rate SE
’ U
T S
A N
IP
I C
Gross
R T
Individuals sales/A 40%
P
receipts
A R
IN
M
SE
MC Gross
S M
Corporations income 40%

P A
I C
P
O R
F Page 57
 Personal income tax Y
Optional standard deduction (RR No. 8-2018) NL
O
SE
’ U
Election to avail OSD T S
A N
IP
I C
R T
Continuing business
PA New business
A R
IN
M
SE
First quarter ITR Initial quarter ITR
C
S MM
P A
IC
P
O R
F Page 58
 Personal income tax Y
Optional standard deduction NL
O
OSD clarification on GPP SE
’ U
T S
General Either
A N
Professional
P
Partners
I in
Partnership
IC GPP
(GPP)
R T
Only one A
P
R
can avail
A
I N
E M
S
C
MM OSD
S
P A
IC
P
O R
F Page 59
 Personal income tax Y
Optional standard deduction (RR No. 8-2018) NL
O
SE
General professional partnership ’ U
T S
N
ofAservices
Gross income = Revenue less costIP
I C
RT
PA
A R
OSD IN Itemized
M
SE
M C
S M
Net income Net income
P A
IC
P
O R
F Page 60
 Personal income tax Y
Optional standard deduction (RR No. 8-2018) NL
O
SE
Partner’s share ’ U
General professional partnershipNT
S
P A
CI
Graduated income
tax rates T I
No deduction
A R
P Partner’s share net of
8% income tax
A R
not allowed
IN costs and expenses
M
SE
C
SMM
P A
IC
P
O R
F Page 61
 Personal income tax Y
Optional standard deduction (RR No. 8-2018) NL
O
SE
’ U
Partner T S
A N
IP
I C
R T
Share in GPP PA Other income
A R
IN
M
SE
No deduction Itemized or OSD
C
SMM
P A
IC
P
O R
F Page 62
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
U ’
T
Mr. JMLH is a partner of AMBS & Co., a general professional S
partnership, and owns 25% interest. The gross A N of AMBS
receipts
& Co. amounted to P10,000,000 for taxable year I P 2018. The
I C
R T
recorded cost of service and operating expense of AMBS & Co.
A
were P2,750,000 and P1,500,000, respectively.
P
A R
AMBS & Co. availed OSD N
M I
Gross Receipts S E P10,000,000
M C
Less: Cost of Services 2,750,000
Gross IncomeSM P7,250,000
Less: OSD
P A (P7,250,000 x 40%) 2,900,000
C
Net IIncome for distribution to partners P4,350,000
P
R
FOPage 63
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
A N
Computation of income tax due of Mr. JMLH I P
I C
RT
P A x 25%
Share in Distributive Profit (P4,350,000 P1,087,500

A R
Tax Due: IN
On P800,000.00 E M P130,000
S – P800,000) * 30%
On Excess (P1,087,500 86,250
Income Tax DueM
C P216,250
SM
P A
IC
P
O R
F Page 64
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
Ms. RSPV is a prominent independent contractorN who offers
architectural and engineering services. SinceIP
A
RSPV’s career
I
flourished, her total gross receipts amountedC to P4,250,000 for
taxable year 2018. Her recorded cost ofR T
service and operating
PA
expenses were P2,150,000 and P1,000,000, respectively. She
opted to avail of the 40% OSD.AR
I N
M
SE
C
SMM
P A
IC
P
O R
F Page 65
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
N
Gross Receipts – Architectural and Engineering Services P4,250,000
A
Multiply by OSD rate
IP 40%
Deductible OSD I C P 1,700,000
R T
Net Taxable Income will be computed PasAfollows:
Gross Receipts – Architectural andREngineering Services P 4,250,000
N A
Less: OSD
M I 1,700,000
Net Taxable Income
S E P 2,550,000

MC
Computation of income tax due
S
On P2,000,000.00M P 490,000
On ExcessA(P2,550,000 – P2,000,000) x 32% 176,000
C PTax Due
P I
Income P 666,000

O R
F Page 66
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
Ms. MRU operates a convenience store while she A Noffers
bookkeeping services to her clients. In 2018, I P gross sales
her
I C
T
amounted to P1,800,000, in addition to her gross receipts from
Rrecorded cost of goods
A
bookkeeping services of P400,000. Her
PP1,325,000 and P1,320,000,
sold and operating expenses were
respectively. ARN
M I
SE
C
SMM
P A
IC
P
O R
F Page 67
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
Ms. MRU availed OSD T S
AN tax rates)
Computation of income tax due (graduated income
P
C I
Gross Sales- Convenience Store TI P1,800,000
Gross Receipts – Bookkeeping A R 400,000
P
Total
A R P2,200,000
N
Less: OSD (P2,200,000) * I40% 880,000
Net Taxable Income EM P1,320,000
S
Tax Due: M C
S M
On P800,000.00 P130,000
P A (P1,320,000 – P800,000) x 30%
On Excess 156,000
ICtax due
Total
P P286,000

O R
F Page 68
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
Computation of income tax (8% income tax) A N
IP
I C
Gross Sales- Convenience Store
R T P1,800,000
Gross Receipts – Bookkeeping
PA 400,000
Total
A R P2,200,000

IN
Less: Amount allowed as deduction under Sec. 24(A)(2)(b) 250,000
Net Taxable Income M P1,950,000
SE
Tax Due: C
8% of P1,950,000.00
SMM P156,000.00

P A
IC
P
O R
F Page 69
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
The gross sales of GEAL Corporation for 2018 amounted
A N to
I P
P6,000,000, with cost of sales amounting to P4,000,000. It
incurred operating expenses amounting to I CP1,000,000, and on
R
the filing of its First Quarter Income Tax TReturn, it signified its
intention to avail of the OSD. PA
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 70
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
Computation of OSD and Tax Due: A N
I PP6,000,000
Gross Sales
I C
Less: Cost of Sales
R T 4,000,000
Gross Income PA P2,000,000
Less: OSD (P2,000,000 x 40%) R 800,000
A
Taxable Income
MIN P1,200,000

S E
Tax Due: C
M
30% of P1,200,000 P360,000
SM
• PAcorporation based on gross income
OSD for
C
P I
O R
F Page 71
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
N
A
Ms. GEAL is a partner of CCF & Co., a general professional
P
I of CCF & Co.
C
partnership, and owns 25%. The gross receipts
I2018. The recorded
amounted to P10,000,000 for taxable yearT
Rof CCF & Co. were
A
cost of service and operating expenses
P
P2,750,000 and P1,500,000, respectively.
R
N A
MI
S E
C
SMM
P A
IC
P
O R
F Page 72
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
A N
Computation of net income of CCF & Co. IP
I C
R T
PA
Gross Receipts P10,000,000
Less: Cost of Services 2,750,000
Gross Income A R P7,250,000
I N
Less: Operating Expenses
E M 1,500,000
S
Net Income for distribution to partners P5,750,000
C
SMM
P A
IC
P
O R
F Page 73
 Personal income tax Y
Optional standard deduction NL
O
Illustration SE
’ U
T S
Computation of income tax due of Ms. GEAL
A N
P
I
C
Share in Distributive Profit (P5,750,000 x I25%) 1,437,500
R T
Tax Due: P A
On P800,000 A R P130,000
IN
On Excess (P1,437,500 –MP800,000) x 30% 191,250
Income Tax Due SE P321,250

M C
S M
P A
I C
P
O R
F Page 74
 Personal income tax Y
Filing tax returns NL
O
SE
Individuals U
S’
N T
Personal
P A
C I
profile
and Gross T I
4 page sales A R
ITR Information
receipts / PAllowable
A
Compen-
R deductions
I N Income
M sation

SE
Taxable tax due
income
income and
C
MM
payable

S
P A
IC
P
O R
F Page 75
 Corporate income tax Y
Filing tax returns NL
O
SE
Corporations U
S’
N T
Corporate
P A
C I
profile
and Gross T I
4 page sales A R
ITR Information
receipts / PAllowable
A
income
R deductions
I N Income
M tax due
SE Taxable
income and
C
MM
payable

S
*Note: Does not
P A
IC
affect TIMTA
P
O R
F Page 76
 Personal income tax Y
Substituted filing NL
O
SE
Substituted filing of ITR ’ U
T S
N
Stamped “received by
A
Requisites IP BIR”
I C
R T
1 employer in the Income tax PA
Philippines R
correctly withheld
A
I N
M
Purely
SE
C
compensation

MM
income earner
S
P A
IC
P
O R
F Page 77
 Personal income tax Y
Quarterly installment payments of income tax for individualsN L
O
SE
’ U
T S
Quarterly A N
st
1 - May 15 I P
I C
(previously April 15)
R T
nd
2 - August 15
rd PA
3 - November 15
A R Annual
I N

M
p C
S E M
?
TRAIN: May 15 or April 15?
(OLD Law: April 15)

S M RR No. 8-2018: April 15

P A
I C
P
R
FOPage 78
 Personal income tax Y
Annual installment payments of income tax for individuals N L
O
SE
’ U
1st installment T S
?
TRAIN: May 15 or
April 15?
(OLD Law: April 15) T I C I P A N

R
RR No. 8-2018: April 15 PA
A R 2nd installment
I N
M TRAIN: October 15
SE (OLD Law: July 15)
M C
S M
P A
I C
P
R
FO
Page 79
 Personal income tax Y
Timing of filing of individual income tax return NL
O
Illustration SE
’ U
T S
A N
Ms. Alona Will, a popular actress, received talent fees from EBQ-Cyril
IP
Promotions amounting to P20,000,000 for 2018. The creditable taxes
I C
R
costs and expenses amounting to P5,000,000.
T
withheld from the talent fees amounted to P1,600,000. She incurred

PA
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 80
 Personal income tax Y
Timing of filing of individual income tax return NL
O
Illustration SE
’ U
Computation of income tax due T S
A N
IP
Gross Receipts
I C P20,000,000
Less: Costs and Expenses R T 5,000,000
Taxable Income PA
P15,000,000
A R
IN
Tax Due and Payable:M
E
On P8,000,000.00 S P2,410,000
M C
On Excess (P15,000,000 – P8,000,000) x 35% 2,450,000
M
Total TaxSDue P4,860,000
P
Less: ACreditable Taxes Withheld 1,600,000
PIC Tax Payable
Net P3,260,000

O R
F Page 81
 Personal income tax Y
Individuals not required to file ITR NL
O
SE
’ U
T S
OLD LAW
PAN
TRAIN
C I
T I
≤ personal R
Taxable PA
and additional
≤ P250,000
income AR
exemption
N
M I
SE
C
SMM
P A
IC
P
O R
F Page 82
 Withholding taxes Y
Tax rates and deadline NL
O
SE
’ U
OLD LAW S
TRAIN
T
EWT rates 1% to 32% A N
1% to 15%
(Jan. 1, 2019) IP
I C
Deadline for filing / • 25 days from T • Last day of the
payment of EWT and AR
close of quarter
P month following
FWT returns
A R close of quarter
• CIRNmay require
M I
filing and payment
SE at more frequent
C intervals

SMM
P A
IC
P
O R
F Page 83
 Creditable withholding taxes (RMC No. 1-2018) Y
Self-employed individuals or professionals NL
O
SE
Professional Fees,
Beneficiaries from ’ U
Talent Fees,
Estate and Trust T S
Brokers and
Commissions, etc.
(10/15%)
(15%)
A N
Agents (10%)

IP
I C
R T Independent and/or
Partners from GPP P
Medical A exclusive sales
(10/15%) A R
Practitioners
(10/15%)
representatives
and marketing
I N agents (10%)

S EM
C
MM
TRAIN-
CP
A 8%S
P I
O R
F Page 84
 LY
O N
SE
’ U
T S
Value added tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 85
 Value added tax Y
General NL
O
S E
Expand VAT base by limiting exemptions to’ U raw
1 food and other necessities
A N T S
I P
2 Strictly limit VAT zero-rating to
P A R T I C
direct exporters

3 Give full VAT refund A

M I N
inRcash and abolish TCCs

S E
4 S M M C
Increase VAT threshold to P3 million

P A
P IC Proposed DOF Tax Reform Program
O R
F Page 86
 Value added tax Y
VAT-exempt transactions NL
O
SE
’ U
T S
A N
Lease of residentialIPunit with
1 monthly rentalT(≤ICP15,000)
A R
P
A R
I N
E MSale of gold to BSP
S (OLD LAW: zero-rated)
2 MC
SM
P A
IC
P
O R
F Page 87
 Value added tax Y
VAT-exempt transactions NL
O
SE
U
’
Sale of drugs and medicines T S
prescribed for diabetes, A N
I P high
1 I C
cholesterol and hypertension
T
(JanA1,R2019)
P
A R
I N
E M
Sale or lease of goods and
Sservices to senior citizens (RA
2 MC 9994) and PWDs (RA10754)
SM
P A
IC
P
O R
F Page 88
 Value added tax Y
VAT-exempt transactions NL
O
SE
’ U
T S
N
Transfer of property in pursuance
A
of a plan of mergerI P or
I C
T
consolidation
R
PA
A R
I N
M
Association dues, membership
SE fees, and other charges
2 MC (homeowners association &
SM condominium corporations)
P A
IC
P
O R
F Page 89
 Value added tax Y
VAT-exempt sales of real properties NL
O
SE
’ U
T S
A N
I
Sale of real property not Pprimarily
1 I
held for sale orClease
R T
PA
A R
I N
E M
S Sale of real property utilized for
2 MC socialized housing (RA 7279)

SM
P A
IC
P
O R
F Page 90
 Value added tax Y
VAT-exempt sales of real properties NL
O
SE
3 OLD LAW TRAIN
’ U
T S
2018-2020N 2021
P A
C I
T I
Sale of R
?
P1,500,000
residential lot P1,919,500 PA P1,919,500
or Removed

NAR
M I
SE
Sale of house C
& lot and other
residentialA
I C
dwellings P
P
S M M
P3,199,200
P2,500,000
or
P3,199,200 ? P2,000,000*

*Adjusted using CPI every 3 years

O R
F Page 91
 Value added tax Y
Revised provisions on VAT-exempt transactions NL
O
SE
Services by agricultural contract growers ’ U
and milling for others T S
A N
I P
I C
R T Raw
PA sugar
A R
I N

O
E M
S Raw
MC
M cane
Sugar S sugar
P A
cane
I C
P
O R
F Page 92
 Value added tax Y
Revised provisions on VAT-exempt transactions NL
O
SE
’
Tools of trade, occupation or employment U
T S
AN
I P
I C
RT
PA
A R
IN
M
SE
C
SMM
P A
IC
P
O R
F Page 93
 Value added tax Y
Zero-rated sales of goods and services NL
O
SE
’ U
T S
N
Registered enterprises
A
P customs
in separate
I
Goods T IC(special laws)*
territory
Seller or A R
Services P
R
NA
Registered enterprises
M I in Tourism Enterprise

SE
Zones*
C
MM
* VETOED
S
P A
IC
P
O R
F Page 94
 Value added tax Y
Zero-rated sales of goods and services NL
O
SE
SALES TO TRAIN EFFECT OF
’ U VETO
T S
Registered A N
enterprises in
CIP Goods
T I
?
separate customs *
territory
A R 0% to 12% VAT
(special laws) Zero-P
A R
rated
I N
Registered S EMsales
enterprises in C Service
MM
?
Tourism Enterprise *
Zones S 0% to 12% VAT
P A
IC
P * Issue on applicable tax
rates arises due to veto

O R
F Page 95
 Value added tax Y
Zero-rated sales of goods and services NL
O
SE
’ U
ZERO-RATED SALE OF GOODS T S
A N
I P
I C
R T
PA
A R SECTION 106 (A)(2)(c):
SECTION N
SECTION
I Exempt under special
106(A)(2)(a)(2) M
106(A)(2)(5): EO 226 laws/international
SE(amended by TRAIN) agreements
C
M Enhanced VAT
S M
VETOED
P A refund system 0% VAT
I C (12% VAT)
P
R
FOPage 96
 Value added tax Y
Zero-rated sales of goods and services NL
O
SE
U
’
ZERO-RATED SALE OF SERVICES T S
A N
I P
I C
R T
PA
SECTION A R SECTION 108 (B)(3):

I N Exempt under special

108(B)(8) M laws/international

SE agreements

MC
S M
A
VETOED
P 0% VAT
I C
P
O R
F Page 97
 Value added tax Y
Zero-rated sales of goods and services NL
O
SE
’ U
PEZA MC 2018-003 T S
A N
Purchases of I P
C
I Zero-
PEZA
locators
R
PA R T
P rated

Special IN A
P
Separate
Economic
E M customs
S
Zones territory
C
M
S M

O
Amended

CPA Republic Act

No. 7916
/ repealed

P I by TRAIN

O R
F Page 98
 Value added tax Y
Not zero-rated sale of goods subject to conditions NL
O
S E
Nonresident buyer U
S ’
Seller ResidentN T
A
P enterprises
I
export-oriented
C processing,
I
(manufacturing,
Tor repacking of goods)
R
packing
PA
N AR
M I
Payment
Export-oriented
Seller
SE enterprises (70%)
MC Raw materials

S M Packaging materials
P A
IC Export sales under EO 226
P
O R
F Page 99
 Value added tax Y
Not zero-rated sale of services subject to conditions NL
O
SE
Payment in FC ’U
S
Persons doing
T
Seller
business
A N outside
thePPhilippines
Processing C I
Manufacturing I
TGoods
R Exported
PA
Repacking

A R
IN
Payment in FC
M
SE
Export-oriented
Contractor/ enterprises (70%)
Sub- C
MM
contractor Processing
S Converting

P A Manufacturing

I C
P
O R
F Page 100
 Value added tax Y
Conditions for removal of VAT zero-rating NL
O
SE
’ U
T S
Enhanced VAT refund system N
(90 days processing) IP
A
I C
R T
A
P as of
December A R
Pending refunds
31, 2017 paid in
I N
M
cash by December 31, 2019
SE
C
SMM
P A
I C
P
O R
F Page 101
 Value added tax Y
Not zero-rated sale of goods NL
O
SE
’ U
Foreign currency denominated sales
T S
A N
IP
Non-
I C Domestic
resident
RT corporation
PA
(Customer)
(Recipient)

A R
IN
M
SE
C Domestic

SMM corporation
(Seller)
P A
I C
P
O R
F Page 102
 Value added tax Y
Return and payment of VAT NL
O
VAT SE
’ U
Effective January 2023 T S
A N

O
I P
I C
Monthly VAT
DeclarationR T
PA
A R
Taxpayer I N BIR
M
SEQuarterly VAT Return

P
C
MM
25 days following the close
S of each taxable quarter

P A
I C
P
O R
F Page 103
 Value added tax Y
Return and payment of WVAT NL
O
Withholding VAT SE
’ U
Effective January 2021 T S
A N
IP BIR
I C
R T
A
O
P
P
Payment 5%
A R 5%
N CVAT FVAT
M I
S E
Seller C Government
M M
S
PA
Goods and
C Services
P I
O R
F Page 104
 Value added tax Y
VAT refund NL
O
Processing of tax refund SE
’ U
Supplier T S
A N
IP
Goods I C
and
Payment
(with VAT) R T BIR
PA
services

A R
Seller I N
M
SE
Zero-rated C
MM
goods and Payment
services
S
P A
I C
Customer
P
O R
F Page 105
 Value added tax Y
VAT refund NL
O
SE

O
REFUND ’ U
T S
A N
DENIAL P
C I
Legal and factual
T I
basis R
Taxpayer PA BIR
N AR
M I
SE

O
C
SMM REFUND NOT
A ACTED
C P Punishable under
P I Section 269

O R
F Page 106
 Value added tax Y
VAT refund NL
O
Penalties imposed to public officers SE
’ U
T S
N

O
P A
P50,000- C I
Holding I
P100,000
public R T
office
PA
Fine

N AR

O
Vote
M I or
E
Sparticipate in 10-15 years
public imprisonment
C
MM
election
S
P A
I C
P ► Section 269 of the Tax Code
O R
F Page 107
 Value added tax Y
VAT Refund NL
O
S E
Revenue Memorandum Circular (RMC) No. 17-2018 ’ U
T S
Grant VAT refund claims A N
I P
I C
R T Denial
P A Denial
120 R 90 letter
days N A days
M I signed by
CIR/
S E DCIR-OG/
C From actual date of
M application (Complete
ACIR/ RD

S M documents)

CPA Prospective (Effectivity of TRAIN)

P I
O R
F Page 108
 Value added tax Y
VAT Refund NL
O
SE
Revenue Memorandum Circular (RMC) No. 17-2018 ’ U
T S
Filing A N
I P
I C
R T VAT Credit
PA
Direct exporters Audit
(including direct
exporters under LTS) A R Division
(VCAD)
I N
Zero-rated taxpayers E M
S
M C
M
Indirect exporters RDO/ LT
S audit
P A
Claims
division
I
(Section C 112 (B) of Tax
P Code)
R
FOPage 109
 Value added tax Y
VAT Refund NL
O
SE
Revenue Memorandum Circular (RMC) No. 17-2018 ’ U
T S
Documents submitted upon application AN
I P
I C
Complete
T
Notarized R Completeness
supporting sworn PA & Submitted
documents
A R
certification Veracity
documents
I N
Revised E M
Checklist S Annex B
(Annex of
M C of RMC
RMC 17-
2018) S M 17-2018)

P A Failure to submit vital

C Non-acceptance of
P I documents application
O R
F Page 110
 Value added tax Y
VAT Refund NL
O
S E
Revenue Memorandum Circular (RMC) No. 17-2018 ’ U
T S
Schedules w/ prescribed format (Annexes of theA NRMC)
I P
I C
R T Reconciliation
Zero-rated
sale of Exempt
A
PTaxable of Export
goods/ sales A R sales sales VS. FC
services I N Remittances

E M
S
M C
Local M Input tax
Samortization PPE Additions PPE Additions amortization
Input tax
purchases with
input taxP
A (CG >1M) per FS per FS (CG >1M)
I C
P
R
FOPage 111
 Value added tax Y
Input VAT on capital goods NL
O
SE
Purchase
’ U
T S
A N
IP
I C
R T
12/31/21
PA
A R
M IN
S E
C
S
Amortization MM Outright claim Outright

P A
until fully utilized (unamortized Claim

I C
P
O R
F Page 112
 LY
O N
SE
’ U
T S
Percentage tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 113
 Percentage tax Y
Tax on persons exempt from VAT NL
O
Self-employed and professionals SE
’ U
Gross sales/receipts > T S
Php 3M A N
I P
I C
Y

A RT N

Subject to VAT P
Availed of 8% income

N AR tax

M I
SE
Y N

C Subject to 3% OPT
MM
Exempt from OPT
(excess of P500,000)*
S
P A * VETOED
I C
P
O R
F Page 114
 Percentage tax Y
Stock transaction tax on sale of shares traded NL
O
SE
’ U
T S
A N
IP
½ of 1% 6/10 C
I of 1%
R T
PA
A R
I
Gross selling priceNor gross value in money
EofMthe shares sold
S
M C
S M
P A
I C
P
O R
F Page 115
 Percentage tax Y
RR No. 9-2018 (Stock transaction tax on sale of shares traded) NL
O
S E
½ of 1% 1/10 of 1%
’ U of 1%
6/10
T S
A N
Filing and P
File Iand
I C
EFPS/ payment
BIR Form R T Form
payment
BIR
eBIR filer A
2552 (ATC: P 0605 (ATC:
PT 200)AR MC 031)
I N
E M
S File and
Manual MC payment
filer SM BIR Form

P A 2552 (ATC:
I C PT200)
P
R
FO
Page 116
 Percentage tax Y
Deadline NL
O
SE
’ U
OLD LAW S
TRAIN
T
Deadline for filing / • 25 days from • 25AN days from close
payment of OPT close of quarter
CIPof quarter
return (general) T I
• CIR may require
A R
P
filing and payment
otherA
R
than
IN
quarterly
M
S E
C
SMM
P A
I C
P
O R
F Page 117
 Percentage tax Y
BIR Tax Advisory (February 8, 2018) NL
O
SE
’ U
Taxpayer Period covered BIR Form S
Deadline for filing
T
A N
WVAT on gov’t Monthly BIR Form No.IP 10 days after end of
money payments 1600 IC the month
and payments to R T
non-residents PA
Withholding agent Monthly
N ARBIR Form No. 10 days after end of
(Percentage and
VAT) M I 1600 the month

Percentage SE
Quarterly BIR Form No. 25 days after each
Taxpayer C 2551Q taxable quarter

SMM
P A
I C
P
O R
F Page 118
 Percentage tax Y
Tax on persons exempt from VAT NL
O
Self-employed and professionals SE
’ U
Existing non-VAT T S
registered
A N
I P
I C
8%Tincome tax
Graduated rates R
(timely filing of
PA application)
AR
Y N

I N
Continue filing M OPT return filing 1. File OPT (with

SE not required notation that 8%

OPT return availed)
C
SMM 2. Signify intention

P A to avail 8% in
quarterly ITR
I C
P
O R
F Page 119
 Value added tax Y
Registration NL
O
SE
Rules
’ U
Gross sales/ receipts T S
>P3,000,000 A N
IP
January I C December

R T
PA
A R
I N Month Next
M breached month
SE Change
C from

SMM Non-VAT
to VAT
P A
I C Subject to OPT Subject to VAT
P File OPT declaration/return File VAT declaration/return
O R
F Page 120
 Value added tax Y
Registration NL
O
Rules SE
’ U
4th year
T S
A N
IP
I C
R T
PA
A R
I N
P
VAT
registered
SE
M P Non-VAT (option)
O VAT threshold

S MM
C P within 1 quarter
Update registration

P graduated rates
8% income tax or
st

P A
I C
P No registration update: Subject to VAT

O R
F Page 121
 Registration updates Y
BIR Supplemental Tax Advisory dated February 19, 2018 NL
O
SE
GROSS SALES
’ U
OR
GROSS RECEIPTS < P3M T S
A N
I P
C
I Individuals
VAT-registered
R T
OR PA OR
A R
Remain VAT- Become Non- I N Avail 8% Graduated
registered
E M
VAT registered income tax rate and OPT
S
C
SMM Accomplish BIR
P A Form No. 1905
I C
P
O R
F Page 122
 Value added tax Y
Registration NL
O
SE
’ U
Illustration
T S
N
Ms. ENA is a newly registered non-VAT taxpayerAengaged in
P
merchandising of accessories on FebruaryC1,I 2018. In September
TIreached P3,500,000.
2018, her cumulative gross sales/receipts
R
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 123
 Value added tax Y
Registration NL
O
Illustration SE
’ U
T S
A N
P
I
February 1, 2018 C
ISeptember 2018
R T
PA
P Merchandising of
accessories
I N A R

P
Gross Sales =
E M
Non-VAT taxpayer P3,500,000
S
C
SMM
Ms. ENAP
A
I C
P
O R
F Page 124
 Value added tax Y
Registration NL
O
Illustration SE
’ U
Scenario 1: Availed 8% income tax T S
A N
I
File Percentage Tax Return (Feb P to Sep)
I C
R T
Feb 1 Sep 1 Oct 1 Oct 20 Oct
P A 31 Dec 31

A R
I N
M as VAT taxpayer
Gross sales/ receipts Register
E
≥P3,500,000 S
M C Subject to VAT

P P A
SM Subject to graduated income tax rates

PR
P I C 8% income tax paid creditable from graduated income tax rates
FOPage 125
 Value added tax Y
Registration NL
O
Illustration SE
’ U
Scenario 2: Availed graduated income tax rates T S
A N
File last Percentage Tax ReturnP
C I
T I
Feb 1 Sep 1 Oct 1 Oct 20 Oct A R
31 Dec 31
P
A R
I N
E
Gross sales/ receipts Update
M registration
≥P3,500,000 Sas VAT taxpayer
M C
S M
Subject P
A
to percentage tax Subject to VAT
I C
P
R
FOPage 126
 LY
O N
SE
’ U
T S
Estate tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 127
 Estate tax Y
Tax rates NL
O
OLD LAW SE
’ U
Income Bracket Tax Rate T S
1 0 -, 200,000 0,, A N
2 Over 200,000 -, 500,000 0 +, P over 200,000
5% of the Iexcess
3 Over 500,000 -, 2,000,000 15,000 +, C excess over 500,000
8% ofIthe
4 Over 2,000,000 -, 5,000,000 135,000 +, T
11%
R of the excess over 2,000,000
5
6
Over
Over
5,000,000 -,
,
10,000,000
10,000,000
A
456,000 +,
15% of the excess over 5,000,000
P 20% of the excess over 10,000,000
1,215,000 +,

A R
I N
Effective Jan 1, 2018 M
SE
C
S MM6% of the value of the net estate
P A
I C
P
O R
F Page 128
 Estate tax Y
Deductions for citizen and resident estates NL
O
SE
OLD LAW ELIT TRAIN U
S’
T
P Funeral expenses
CI P AN
O
P PA
R T
Judicial expensesI
O
P
Claims against
I N A R
the estate P
M
P MC S E Claims against
insolvent persons P
PP A
SM Unpaid mortgage
P
P IC
O R
F Page 129
 Estate tax Y
Deductions for citizen and resident estates NL
O
SE
OLD LAW Other Deductions TRAIN U
S’
N T
P A
I
P IC
Vanishing deductions
R T P
PA
P N
Transfer for public use
A R P
P SEM I Medical expenses
O
PSMMC Amounts received by heirs
under RA 4917 P
CP P
P A Share of surviving spouse

P I
O R
F Page 130
 Estate tax Y
Deductions for citizen and resident estates NL
O
SE
OLD LAW TRAIN
’ U
T S
Standard deduction
A N
P
I
P1,000,000 I C
P5,000,000
R T
PA
R
Allowable deduction for family home
A
IN
M
SE
P1,000,000 P10,000,000
C
SMM
P A
I C
P
O R
F Page 131
 Estate tax Y
Deductions for non-resident estates NL
O
SE
OLD LAW ELIT TRAIN U
S’
Proportionate N T
P A
I
P Funeral expenses IC

PA
R T O
P Judicial expenses

N A R O
P CS E M IClaims against
the estate P
PA S M M Claims against
insolvent persons P
R
P P
I C P Unpaid mortgage
P
FO
Page 132
 Estate tax Y
Deductions for non-resident estates NL
O
SE
OLD LAW Other Deductions TRAIN U
S’
N T
P A
I
P Vanishing deductions
R T I C
P
P A R
A
P use
Transfer for public P
P SE
M
Share of I N
surviving spouse
P
MC
SM
P A
I C
P
O R
F Page 133
 Estate tax Y
Deductions for non-resident estates NL
O
SE
’ U
OLD LAW TRAIN T S
A N
I P
Standard deduction
T IC
P0 A R
P500,000
P
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 134
 Estate tax Y
Other requirements NL
O
SE
’ U
T S
Notice of death AN
Not required
P
C I
T I
Installment R from deadline
2 years
A
payment: PP10,000,000
without penalty and
insufficient cash A R interest
IN
Withdrawal from M 6% FWT
bank deposit SE
C
S MM
P A
I C
P
O R
F Page 135
 Estate tax Y
Tax return and CPA certification NL
O
SE
’ U
T S
A N
OLD P
Statement TRAINICIStatement
LAW certified by CPA T certified by CPA
R
>P2,000,000
gross value of PA > P5,000,000
gross value of
estate A R estate
IN
M
SE
Filing of tax Filing of tax
C
return return

SMM
6 months 1 year

P A
I C
P
O R
F Page 136
 LY
O N
SE
’ U
T S
Donor’s tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 137
 Donor’s tax Y
Tax rates NL
O
OLD LAW SE
’ U
Income Bracket Tax Rate T S
1 0 -, 100,000 0,, A N
2 Over 100,000 -, 200,000 0 +, P over
2% of the Iexcess 100,000
3 Over 200,000 -, 500,000 2,000 +, C excess over
4% ofIthe 200,000
4 Over 500,000 -, 1,000,000 14,000 +, 6%Tof the excess over 500,000
R
PA
5 Over 1,000,000 -, 3,000,000 44,000 +, 8% of the excess over 1,000,000
5 Over 3,000,000 -, 5,000,000 204,000 +, 10% of the excess over 3,000,000
5 Over 5,000,000 -, 10,000,000
A R
404,000 +, 12% of the excess over 5,000,000
6 Over , 10,000,000
I N1,004,000 +, 15% of the excess over 10,000,000

M
TRAIN
SE

O
C
M tax

P
6%Mdonor’s
S
(donation over 30% donor’s
P A P250,000) tax (strangers)
I C
P
O R
F Page 138
 Donor’s tax Y
Exemption NL
O
Goods/Properties SE
U
(ordinary course of business) TS’
A N
IP
I C
R T
Transferor PA Transferee
A R
I N
E M
S
C
SMM Payment
P A ► At arm’s length
I C
P ► Free from donative intent
O R
F Page 139
 Donor’s tax Y
Eliminated deduction NL
O
SE
’ U
T S
A N
P
I
Dowries or gifts I C
R T
on account A
P of
A R
marriage
I N
E M
S
MC
SM
P A
I C
P
O R
F Page 140
 LY
O N
SE
’ U
T S
Excise tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 141
 Excise tax Y
Cigars and cigarettes NL
O
S E
Cigarettes packed by hand and machines’ U
T S
A N
1/1/2018- 7/1/2018- 1/1/2020- P 1/1/2022-
6/30/2018 12/31/2019 C
12/31/2021I 12/31/2023
T I
R
PA
A R
P32.50/pack P35/pack N P37.50/pack P40/pack
M I
S E
M C
S M
P A *4% increase every year effective Jan. 1, 2024
I C
P
R
FOPage 142
 Excise tax Y
Manufactured oils and other fuels NL
O
Per liter/kg/metric ton of OLD LAW 2018 2019SE2020
U
’2
LPG - 1
T S 3
Diesel fuel oil -
A N
2.50 4.50 6
Kerosene - IP 3 4 5
I C
Bunker fuel oil - T 2.50 4.50 6
R
Gas PA0.05 8 9 10
Denatured alcohol
A R 0.05 8 9 10
Asphalts IN 0.56 8 9 10
M
Aviation turbo jet fuel
SE 3.67 4 4 4
C
SMM
A
P are in PHP
Note: Amounts
I C
P
O R
F Page 143
 Excise tax Y
Manufactured oils and other fuels NL
O
Per liter/kg/metric ton of OLD LAW 2018 2019SE2020
U
’9
Waxes and petroleum 3.50 8
T S 10
Lubricating oils and greases 4.50 8N 9 10
P A
Naphtha 4.35
C I 7 9 10
Regular gasoline T
4.35
I 8 9 10
R
Leaded premium gasoline PA5.35 - - -
Unleaded premium gasoline
A R 4.35 6.50 8.50 10
Petroleum coke I N - 2.50 4.50 6
M
SE
C
MM
Notes:
1. Amounts are in PHP
S
P A
2. Increase for 2018 to 2020 suspended if Dubai crude oil price reach USD 80 per
barrel or more for 3 months prior to scheduled increase
I C
P
O R
F Page 144
 Excise tax Y
Automobiles NL
O
OLD LAW SE
’ U
Selling price net of excise and VAT Tax Rate
T S
1 0 -, 600,000
A
2% N
2 Over 600,000 -, 1,100,000
I P over 600,000
12,000 + 20% of the excess
3 Over 1,100,000 -, 2,100,000 112,000 + 40% ofIC
the excess over 1,100,000
512,000 + 60%Tof the excess over 2,100,000
4 Over 2,100,000 ,
A R
TRAIN P
A R
1 0M-,
IN 600,000
Selling price net of excise and VAT

4%
Tax Rate

2 Over E -, 1,000,000
600,000
S 10%
3 Over 1,000,000 -, 4,000,000 20%
4 Over
M C , 4,000,000 50%

SM = 50% of
Hybrid vehicles 1. Purely electric vehicles
A
P
O
graduated rates
I C 2. Pick-ups
P
O R
F Page 145
 Excise tax Y
Tax Savings / (Losses) (OLD LAW vs. TRAIN) NL
O
1,000,000
SE
Tax Savings / Losses

852,000
’ U
800,000
T S
A N
600,000 I P
I C
452,000
R T
PA
400,000

A R
200,000
I N
92,000
M 52,000

SE
(12,000) (8,000) 0 0
-

C
(108,000)
(148,000)

(200,000)
S MM (298,000)
(248,000)

P A Manufacturer’s Selling Price

(400,000)
IC
600K 1000K 1100K 1640K 2100K 3000K 4000K 4500K 5000K 6000K 7480K 8000K
P
O R Savings/(Losses) OLD LAW vs. TRAIN

F Page 146
 Excise tax Y
Sugar-sweetened beverages NL
O
SE
Taxable U
S’
Beverages using Beverages using NT
Beverages using
purely caloric high fructose PA non-caloric
C I
sweeteners corn syrup
T I sweeteners
R
PA
A R
P6.00/liter IN P12.00/liter P6.00/liter
M
SE
M C
Tax exempt
S M
P A
► Beverages using purely coconut sap sugar
►C
P I Beverages using purely steviol glycosides

O R
F Page 147
 Excise tax Y
Exclusions on sugar-sweetened beverages NL
O
SE
’ U
All milk T S
products
A N
IP
I C
100%
R T 100%
natural
vegetable PA natural
fruit juices
juices NOT
A R
IN
SUBJECT
M
S E
CGround Meal

SMMcoffee, instant
soluble
replacement
beverages
and
P A coffee, pre-
packaged medically
I C powdered indicated
P coffee beverages

O R
F Page 148
 Excise tax Y
Non-essential services NL
O
SE
Taxable ’ U
T S
Cosmetic Procedures A N
IP 5% of
I C
Surgeries
R T Gross

Body Enhancements PA Receipts

A R
IN
M
E
Reconstructive Ssurgery due
C
to congenital
M disorders, Exempt
M and infections
trauma,Sburns
P A
I C
P
O R
F Page 149
 Excise tax Y
Mineral products NL
O
SE
OLD 2018 2019 2020
’ U
LAW
T S
Coal and coke per metric ton 10 50
A N 150
100
Nonmetallic minerals and I P
2% I C 4% 4%
4%
quarry resources
R T
P2%A 4% 4% 4%
Copper and other metallic
minerals
Gold and chromite A R 2% 4% 4% 4%
I N
Indigenous petroleum M 3% 6% 6% 6%
SE
M C
S M
P A
P IC
O R
F Page 150
 LY
O N
SE
’ U
T S
Documentary stamp tax A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 151
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
Original issue of P1.00 on each P200
U
’ P200
P2.00 on each
shares of stock T S
N
A on each P200
Sales, agreements to P0.75 on each P200 I P
P1.50
sell, memoranda of I C
sales, deliveries or RT
transfer of shares or PA
certificates of stock
A R
Certificates of profits N
P0.50I on each P200 P1.00 on each P200
or interest in property
S EM
or accumulations C
M M
S
P A
I C
P
O R
F Page 152
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
U
Bank checks, drafts, P1.50
T S’
P3.00
certificates of deposit
not bearing interest, A N
I P
and other instruments I C
All debt instruments RT
P1.00 on each P200 P1.50 on each P200
PA
Bills of exchange or P0.30 on each P200 P0.60 on each P200
drafts A R
I N
Acceptance of bills of M
P0.30 on each P200 P0.60 on each P200
exchange and others SE
C
S MM
ForeignAbills of P0.30 on each P200 P0.60 on each P200
C
exchange P and letters
I
P of credit
R
FOPage 153
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
’ U
Life insurance policies
T S
Exempt A N Exempt
< P100,000
IP
I C
RT
P100,000 < 300,000 P10 P20

P300,000 < P500,000 P25 PA P50

A R
P500,000 < 750,000 IN P50 P100
M
P750,000 < P1,000,000 SE P75 P150
MC
M
> P1,000,000
S
P100 P200

P A
I C
P
O R
F Page 154
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
Policies of insurance P0.50 on each P4.00 No S
U
’
change
upon property N T
P A
I
Fidelity bonds and P0.50 on each P4.00IC No change
other insurance RT
policies PA
A R
Policies of annuities I
P0.50
N(0.20 for pre- P1.00 (P0.40 for pre-
and pre-need plans
M
E plans) on each
Sneed need plans) on each
C P200 P200

SMM
P A
I C
P
O R
F Page 155
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
Indemnity bonds P0.30 on each P4.00 No S
U
’
change
N T
P A
Certificates P15.00 CI P30.00
T I
Warehouse receipts P15.00A R P30.00
P
A R
Jai-alai, horse race, P0.10IN
on every P1.00 P0.20 on every P1.00
tickets, lotto, or other
E M
authorized numbers S
games
MC
S M
P A
I C
P
O R
F Page 156
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
• P1: P1,000 > value • P2: P1,000
U
’ > value
Bills of lading or
T S
receipts > P100 N
> P100
A
• P10: value > • PP20: value >
C I P1,000
P1,000 I T
Proxies P15.00
A R P30.00
Powers of attorney P5.00 P P10.00
A R
Leases and other P3.00 Nfor first P2,000 P6.00 for first P2,000
hiring agreements M
plus
I
P1.00 for every plus P2.00 for every
SE P1,000 P1,000
C
SMM
P A
I C
P
O R
F Page 157
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
Mortgages, pledges, • P20 – amount • P40 – S ’U
amount
and deeds of trust secured < P5,000 N T
secured < P5,000
• P10 on each A on each
• PP20
I
P5,000 in excess IC P5,000 in excess
of P5,000
A RT of P5,000
Deeds of Sale, • P15 – valueP No change
Conveyance of Real A
received R< P1,000
Property • P15I Non each
E M in excess
P1,000
S of P1,000
C
SMM
P A
I C
P
O R
F Page 158
 Documentary stamp tax Y
NL
O
NATURE OLD LAW TRAIN SE
Charter parties and similar • P500 – registered gross • ’ U
P1,000 – registered
instruments tonnage < 1,000 tons T S
gross tonnage < 1,000
(does not exceed 6
A N
tons (does not exceed 6
months) plus P50 for
I P
months) plus P100 for
I
each month in excess of C each month in excess of
6 months
R T 6 months

PA
• P1,000 – 10,000 tons > • P2,000 – 10,000 tons >
registered gross registered gross
A R
tonnage > 1,000 tons tonnage > 1,000 tons
IN
(does not exceed 6 (does not exceed 6
M
months) plus P100 in months) plus P200 in
S• Eexcess of 6 months
P1,500 – registered •
excess of 6 months
P3,000 – registered
C
MM
tonnage > 10,000 tons tonnage > 10,000 tons
(does not exceed 6 (does not exceed 6
S months) plus P150 for months) plus P300 for
P A each month in excess of each month in excess of
I C 6 months 6 months
P
O R
F Page 159
 Documentary stamp tax Y
Donation of real property NL
O
SE
U
’
Donor S
TDonee
Real Properties
A N
IP
I C
R T
PA
Donor’s DST A R
Tax I N
EM
Value of Donated Property Rate
S
C First P1,000 P15.00

SMM For each additional P1,000 P15.00

BIR A
P
P IC
O R
F Page 160
 Donation of real property exempt from DST Y
RR No. 4-2018 dated December 19, 2017 NL
O
SE
Gifts exempt from donor’s tax and DST’ U
T S
AN
I P
I C
R T DONOR
PA Non-
DONOR R
Resident N A
DONEE resident
M I Alien
SE
National
Government
C
MM
Educational/
S charitable
P A institutions, etc.
I C
P
O R
F Page 161
 LY
O N
SE
’ U
Administrative T S
A N
requirements and other IP
provisions I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 162
 Tax incentive report Y
Cooperatives NL
O
SE
’ U
T S
Cooperative
Development A N
Authority IP
Tax incentive I C
report R T
 Incentives by PA
cooperatives BIR
A R
• Income tax N
• VAT M I
• Other tax SE Department Tax Incentive
incentives C of Finance
MM
Report
TIMTA Database
S
P A
I C
P
O R
F Page 163
 Power of Commissioner Y
Prescription of real property values NL
O
Mandatory SE
consultation ’ U
with
competent T S
appraisers
A N
IP
Basis of I C
valuation
R T Prior
(Public
records P A notice to
affected
open to
inquiry)
RCIR
A Real
taxpayers

I N property
M values
SE
C
SMM Zonal
valuation Automatic

P A adjustment
(Published
adjustment
once every
I C in 3 years
P newspaper)

O R
F Page 164
 Keeping of books of accounts Y
Accounting records and financial statements NL
O
SE
Annual gross
’ U
sales, earnings,
T S
receipts or output
A N
IP
ALL entities I C > P3,000,000
regardless of sales
R T (Old law > P150,000

PA
(Old law < P50,000 quarterly)
quarterly)
A R
Relevant and IN Annual audit by
appropriate set of M independent CPAs
bookkeeping records SE
C
S MM Income tax return
accompanied with
P A Account Information
I C Return
P
O R
F Page 165
 Issuance of receipts or invoices Y
Requirements NL
O
SE
’ U
P100 or more
T S
A N
IP
I C
Date of
Quantity
RT
A cost
Description/
Nature of
transaction PUnit Merchandise/

A R Service

IN
M
SE
C
S MM
P A
I C
P
O R
F Page 166
 Issuance of receipts or invoices Y
Requirements NL
O
SE
Rent
Commission ’ U
Compensation T S
Fees
A N
I P
I C
Date of
Quantity
RT
A cost
Description/
Nature of
transaction PUnit Merchandise/

A R Service

I N
M Address

SE
Name of Business
of
Purchaser Style
purchaser
C
S MM
P A
I C
P
O R
F Page 167
 Issuance of receipts or invoices Y
Requirements NL
O
SE
’ U
T S
VAT-Registered
Purchaser
A N
I P
I C
Date of
Quantity
RT
A cost
Description/
Nature of
transaction PUnit Merchandise/

A R Service

I N
M Address

SE
Name of Business
of
Purchaser Style
purchaser
C
S MM
P A TIN
I C
P
O R
F Page 168
 Issuance of electronic receipts or invoices Y
Requirements NL
O
SE
’ U
T S
e-Invoices and A N
e-Receipts IP
I C
R T
PA
Large A R Exporter of
taxpayers IN goods and
M
E-Commerce
SE
services
C
MM
SWithin 5 years from effectivity of Law
P A
I C
P Keeping of e-receipts/e-invoices: 3 years
O R
F Page 169
 Electronic sales reporting system Y
Requirements NL
O
SE
’ U
T S
AN
Sale of goods and services
P
C I
Electronic T I
Large R Exporter of
PA
POS
taxpayers goods and
A R services
IN
Electronic
E M
sales report SWithin 5 years from effectivity of Law
C
SMM
P A
I C
P
O R
F Page 170
 Interest penalty Y
NL
O
SE
OLD LAW Interest ’U
TRAIN
T S
A N
Twice theI P
20% per
I
legal rateCset
annum
byR
T
the BSP
PA
A R
OLD LAW Assessment I N and Collection TRAIN
E M
S
C
M for
From the date From the date prescribed for
payment or upon issuance of
M
prescribed
Spayment notice and demand by the
P A BIR, whichever comes earlier
I C
P
O R
F Page 171
 Failure to transmit sales data entered on CRM/POS Y
machines to BIR NL
O
SE
OLD LAW Administrative Penalties ’ U
TRAIN
T S
A N
1/10 of 1% I Pof annual net
income I Cin AFS for each
R T of violation OR
day
PA
A R
None IN P3,000, whichever is
M higher
SE
C
S MM AND permanent closure if
the aggregate number of
P A days of violation exceed
I C 180 days within a year
P
O R
F Page 172
 Failure or refusal to issue receipts/invoices Y
NL
O
SE
OLD LAW Administrative Penalties ’U
TRAIN
T S
A N
P
Ito
P1,000 to C
P500,000
50,000 TI
10,000,000
R
PA
A R
OLD LAW
I N
Imprisonment TRAIN

E M
S
M C
S M
2 to 4 years 6 to 10 years

P A
I C
P
O R
F Page 173
 Purchase, use, possession, sale, keeping, maintaining of
Y
sales suppression device NL
O
SE
OLD LAW Administrative Penalties ’U
TRAIN
T S
A N
P
Ito
C
P500,000
None
TI
10,000,000
R
PA
A R
OLD LAW
I N
Imprisonment TRAIN

E M
S
C
S MMNone 2 to 4 years

P A
I C
P
O R
F Page 174
 Attempt to evade or defeat tax Y
NL
O
SE
OLD LAW Administrative Penalties ’U
TRAIN
T S
A N
P
Ito
P30,000 to C
P500,000
100,000 TI
10,000,000
R
PA
A R
OLD LAW
I N
Imprisonment TRAIN

E M
S
M C
S M
2 to 4 years 6 to 10 years

P A
I C
P
O R
F Page 175
 Offenses relating to fuel marking Y
NL
O
SE
OLD LAW Administrative Penalties ’ U
TRAIN
T S
A N
P2,500,000 I P
– 1 st offense

None I
P5,000,000C – 2nd offense
R T
P10,000,000 and revocation
PofAlicense – 3rd offense
A R
OLD LAW
I N
Imprisonment TRAIN

E M
S
C
MMNone
4 to 8 years with P1M to
S P5M additional fine
P A
I C
P
O R
F Page 176
 Filing changes on taxes affected by TRAIN Y
RMC No. 2-2018 dated January 4, 2018
NL
O
SE
’ U
Type BIR Form S
Alphanumeric ATC to be used for Change in tax
T
Tax Code EFPS/eBIR/manual
(ATC) affected filerA N type

WT- banks and BIR Form WI 170 and IP

MC 031 7.5% to 15%
I C
financial
institutions
No. 1602 WC 170
R T
WT- Fringe BIR Form WF 320P
A MC 031 15% to 35%
benefits No. 1603
A R
Percentage tax-
Stocks
BIR Form
No. 2552 M INPT 200 MC 031 ½ of 1% to
6/10 of 1%
S E
C
SMM
P A
I C
P
O R
F Page 177
 New excise tax returns Y
RMC No. 4-2018 dated January 8, 2018
NL
O
SE
’ U
Excise tax BIR Form S
Procedures
T
Sweetened beverages BIR Form No. 2200-S A N
Fill-in applicable form in BIR
IP
website and pay manually via
I C
Cosmetic procedures BIR Form No. 2200-XC
R T
OTC of AABs under RDO

PA
where taxpayer is registered

A R
I N
M
SE
C
S MM
P A
I C
P
O R
F Page 178
 New ATC Codes Y
RMO No. 9-2018 dated January 4, 2018
NL
O
SE
’ U
ATC Description Tax rate
T S BIR Form

WI 165 FWT on amount withdrawn from A

6%
N 1602/2306
decedent’s deposit account IP
I C
RT
WI800/ WC800 FWT on invasive cosmetic 5% 1620-XC

PA
procedures

A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 179
 Incremental revenues from tax reform Y
NL
O
SE
Incremental revenues
’ U
appropriated as follows:
T S
A N
30% IP 70%
I C
R T
PAInfrastructure projects
Programs under RA No. 10659
‘THE SUGARCANE INDUSTRY
DEVELOPMENT ACT OF 2015’
A R
I N
Social mitigating measures and
E M
S
investments in education,

M C
health, social protection,
employment, housing
S M
SocialP A and benefits
welfare
I C program
P
O R
F Page 180
 LY
O N
SE
’ U
T S
Questions? A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 181
 LY
Disclaimer O N
S E
These presentation materials are provided to you for your exclusive U use and
S ’ these
may not be sold in part or in their entirety to any third party. Further,
materials may not be shown, shared or transferred to any other N T third party
P A
without the express written consent of SGV & Co. These materials should not
be used or duplicated – in whole or in part – for any C I purpose.
other
T I
A R
P in summary form and are
These presentation materials contain information
therefore intended for general guidanceA Ronly. These are not intended to be a
N exercise of professional judgment. Neither
substitute for detailed research orIthe
SGV & Co. nor any other memberE M of the global Ernst & Young organization can
Sloss occasioned to any person acting or refraining
accept any responsibility for
M C
from action as a result of any material in these publications. On any specific
matter, reference M
S should be made to the appropriate advisor.
P A
I C
P
R
FOPage 182
 Company’s Expectations LY
O N
SE
’ U
T S
Thank you! A N
IP
I C
R T
PA
A R
IN
M
SE
C
SMM
P A
I C
P
O R
F Page 183