Department of Finance
Bureau of Internal Revenue
presents
Amendments introduced:
1. RA 8761 – VAT on banks-prof-brkers eff 1.1.2000;
2. RA 9010 – eff. 1.1.2001, defers RA 8761 to Jan 1, 2003;
3. RA 9224 – 8.29.03 – Adjust Excise Tax, Automobiles
4. RA 9238 - Banks are reverted to GRT eff 1.1. 2004
5. RA 9243 - DST eff March 20, 2004
6. RA 9294 - OBU-FCDU
7. RA 9334 – Excise Tax, Alcohol/Tobacco, eff 1.1.2005
8. RA 9337 – RVAT eff Nov. 1 2005, 21 sections affected
9. RA 9361 - INPUT CAP removed eff 12 14 06
10. RA 9504- eff. July 6, 2008, MWEs exempt from IT
11. RA 9648 – DST, amends RA 9243
2
continued..
Amendments introduced:
12. RA 10001 – eff. 2.23.2010, Life Insurance GRT 5% to 2%
13. RA 10021 –Exchange of Info, foreign authority
14. RA 10026 - IT exempt, Local Water Districts dtd 3.11.10
15. RA 10351- eff. 1.1.2013 Excise Tax, Alcohol-Tobacco
16. RA 10378 - IT exempt, International Carriers (3.2013)
17. RA 10653 -13TH Mo/OB increased P82K (2.2015)
3
Republic Act (RA) 10963
Effective Jan. 1, 2018
Introduction:
4
Introduction:
5
Salient Features –
6
Salient Features –
B. Budget Reforms:
7
Salient Features –
. .
8
Tax Particulars NIRC of 1997 RA 10963
(RA 8424 as amended) (Effective Jan. 1, 2018)
Sec. 24 (A) (2) Personal income tax
A. Personal Income table for both compensation A. For compensation income earners
Tax table income earners, and self-employed Effective Jan. 1, 2018-Dec. 31, 2022
and/or professionals:
Over P10,000 but not over P500 + 10% of the Over P250,000 but not 20% of the excess
P30,000 excess over P10,000 over P400,000 over P250,000
Over 30,000 but not over 2,500 + 15% of the Over P400,000 but not P30,000 + 25% of the
70,000 excess over 30,000 over P800,000 excess over P400,000
Over 70,000 but not over 8,500 + 20% of the Over 800,000 but not over P130,000 + 30% of the
140,000 excess over 70,000 P2,000,000 excess over P800,000
Over 140,000 but not over 22,500 + 25% of the Over P2,000,000 but not P490,000 + 32% of the
250,000 excess over 140,000 over P8,000,000 excess over P2,000,000
Over 250,000 but not over 50,000 + 30% of the Over 8,000,000 P2,410,000 + 35% of the
500,000 excess over 250,000 excess over P8,000,000
9
Tax Particulars NIRC of 1997 RA 10963
(RA 8424 as amended) (Effective Jan. 1, 2018)
A. Personal Income
Tax table Effective Jan. 1, 2023
10
Tax Particulars NIRC of 1997 RA 10963
(RA 8424 as amended) (Effective Jan. 1, 2018)
11
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
B. Personal Income (Same Tax table C. Mixed income earners shall be taxed as follows:
Tax for Self-employed/ for Compensation
Professionals Income Earners) - On their compensation income – at graduated rates
[Sec. 24(A)(2)(c)(1)]
12
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
- P25,000 per
- Repealed
qualified dependent
child
- Personal exemption
allowable to non- - Repealed
resident alien individual
13
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Sec. 62 Exemption of
On Exemption allowed PHP20,000 allowed from Repealed.
to estate and trust the income of the
estate or trust.
14
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
15
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
16
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
17
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
18
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Sec. 33(C)(4).
De Minimis Benefits
On De Minimis Retained.
1) Monetized unused VL credits of private employees
Benefits (Fringe not exceeding 10 days during the year;
(What was amended
Benefits not 2) Monetized value of VL & SL credits paid to govt was Sec. 33(A),
taxable) officials and employees; Imposition of Fringe
3) Medical cash allowance to dependents of employees
not exceeding P750.00 per employee per semester or
Benefits Tax).
P125/mo;
4) Rice subsidy of P1,500 (per RR 5-2008)
5) Uniform/clothing allowance not exceeding P5,000
per annum (Per RR 8-2012 EFFECTIVE JAN 1, 2012
6) Actual medical assistance, not exceeding P10,000 per
annum;
7) Laundry Allowance not exceeding P300 per month;
8) Employee achievement awards, with an annual
monetary value not exceeding P10,000
9) Gifts given during christmas and major anniversary
celebrations not exceeding P5,000;
10) Daily meal allowance for overtime work not
exceeding 25% of basic minimum wage;
11) Benefits received by an employee by virtue of a CBA
and productivity incentive schemes, amount not
exceeding P10,000.00.
19
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
20
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Additional Provisions:
(continued…) No current rule.
On filing of tax returns
The ITR shall consist of a maximum of four
FOR INDIVIDUAL
(4) pages in paper or electronic form
TAXPAYERS
containing only the following information:
• Personal profile and information;
• Total gross sales, receipts or income from
compensation for services rendered, conduct
of trade or business or
the exercise of a profession, except income
subject to final tax…
• Allowable deductions under the Tax Code;
• Taxable income as defined in Sec. 31 of this
Code; and
• Income tax due and payable.
21
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Additional Provisions:
(continued…)
On filing of tax returns
Sec. 51-A An individual receiving purely
for INDIVIDUAL
compensation income from one employer
TAXPAYERS
wherein the tax of which has been correctly
withheld shall not be required to file an annual
ITR.
22
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
On filing of tax returns Sec. 52 (A) The return The ITR shall consist of a maximum of
for CORPORATE shall be filed by the four (4) pages in paper or electronic
TAXPAYERS president, vice-president form containing only the following
or other principal information:
officer, and shall be • Corporate profile and information;
sworn to by such officer • Gross sales, receipts or income from
and by the treasurer or services rendered, or conduct of trade
assistant treasurer or business, except income subject
to final tax as provided under the Tax
Code;
• Allowable deductions under the Tax
Code;
• Taxable income as defined in Sec. 31
of this Code; and
• Income tax due and payable
23
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
24
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
26
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
On alien individuals Sec. 25 (C) (D) and (E) A rate of [Sec. 6(F) of RA 10963, adds a new
and qualified Filipinos 15% final withholding tax on section referred as Sec. 25 (F)]
employed by specific the gross compensation
employers income of alien individuals and Preferential tax treatment shall not
qualified Filipinos employed apply for employees of ROHQ, RHQ,
by the following employers: OBU, and Petroleum service
contractors and subcontractors
a. Regional or area registering with the SEC beginning
headquarters and January 1, 2018.
regional operating
headquarters of VETOED BY MALACAÑANG:
multinational companies; Provided, However, That Existing
RHOs, ROHQs, OBUs or Petroleum
b. Offshore banking units; Service Contractor$ & Subcontractors
Presently Availing Of Preferential Tax
c. Petroleum contractors and Rates For qualified Employees Shall
subcontractors. Continue To Be Entitled To Avail Of The
Preferential Tax Rate For Present And
Future Qualified employees.
27
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
28
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
29
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
30
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
On return and Sec. 58 The return for final withholding The return for both final and
payment of taxes tax shall be filed and the payment made creditable withholding taxes
withheld at source within 25 days from the close of each shall be filed and the payment
calendar quarter. made not later than the last day
of the month following the
The return for creditable withholding close of the quarter during
taxes shall be filed and payment made which the withholding was
not later than the last day of the month made.
following the close of the quarter
during which the withholding taxes The provision allowing the
was made. Commissioner of Internal\
Revenue to adjust the
The Commissioner, with the approval withholding of tax at more
of the Secretary of Finance, may frequent intervals is removed
require the withholding agents to pay
or deposit the taxes deducted
or withheld at more frequent intervals
when necessary to protect the interest
of the government.
31
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Return and Sec. 74 (B) The amount of estimated Payment of the fourth
payment income shall be paid in 4 installment shall be paid on or
of estimated installments with the fourth before 15 May of the following
income tax installment to be paid on or before calendar year.
15 April of the following calendar
year.
32
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
33
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
34
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
35
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
36
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
37
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
On estate tax returns • Sec. 90 (A) (3) Estate • Estate tax returns
tax returns showing showing a gross value
a gross value exceeding P5,000,000
exceeding must be certified by a
PHP2,000,000 must CPA
be certified by a CPA.
40
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Additional provision:
Installment Payment An estate with insufficient
Sec. 91 Payment of
of estate taxes cash is allowed to pay the
estate tax
estate tax due by
installment within two
years from the statutory
date for its payment
without civil penalty and
interest.
41
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
42
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
43
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Exemption of certain
Exemption of certain Gifts Repealed.
Gifts
44
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
b) Foreign currency denominated sales; and - Foreign currency denominated sales are
c) Sales to persons or entities exempted removed from zero-rated sale of goods.
under special laws or international
agreements
45
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
(VETOED BY MALACAÑANG)
On VAT Zero-rated
sale Of Goods Sec. 31 and 33 of RA 10963 added 4 new
sections referred as:
47
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Sec. 108 (B) Zero-rated sales of services • Item 1 will qualify as zero-rated sale of
On VAT Zero- services if these services are exclusively for
include:
sale of international shipping and air transport
services
1. Services rendered to persons operations.
engaged in international shipping or • Zero-rating for transport of passenger and
international air transport operations; cargo from the Philippines to foreign country
2. Transport of passengers and cargo shall apply for domestic air or sea vessels only.
by air or sea vessels from the
Philippines to a foreign country;
3. Services performed by • [ITEM VETOED] Expressly added as
subcontractors and/or contractors in zero-rated transactions the sale of
processing, converting, of services to registered enterprises within
manufacturing goods for an enterprise a separate customs territory as provided
whose export sales exceed 70% of total under special laws and within Tourism
annual production; and Enterprise Zones as declared by TIEZA.
4. Processing, manufacturing or
repacking goods for other persons • Items 3 and 4 shall be subjected to 12% VAT
doing business outside the Philippines upon successful establishment and
which goods implementation of an enhanced VAT refund
are subsequently exported, where the system that grants refunds of creditable input
services are paid for in acceptable tax within 90 days from filing of the VAT
refund application with the BIR and all pending
foreign currency and accounted for in VAT refund claims as of 31 December 2017 shall
accordance with the rules and be fully paid in cash by 31 December 2019.I
regulations of BSP
48
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Sec. 109 (1) VAT exemptions include, among • The VAT threshold is increased from
others, the following transactions: P1,919,500 to P3M.
On VAT
Exemptions 1. Importation of professional instruments,
etc. belonging to persons coming to settle in • increase in monthly threshold for
the Philippines, for their personal use, lease of residential units from P12,800 to
accompanying such persons or arriving within P15,000;
90 days before or after their arrival;
• Beginning 1 January 2021, the VAT
2. Sale of real property utilized for low- cost
exemption shall only apply to sale of
housing, sale of residential lot valued at
PHP1,919,500* and sale of house and lot and real properties not primarily held for
other residential dwellings valued at sale to customers or held for lease in the
P3,199,200*. ordinary course of trade or business,
sale of real property utilized for
3. Lease of residential unit with monthly socialized housing and sale of house and
rental of P12,800*);
lot and other residential dwellings with
4. Importation of fuel, goods, and supplies by threshold reduced to P2M.
persons engaged in international shipping of
air transport operations; and • Beginning 1 January 2019, sale of drugs
and medicines prescribed for diabetes,
5. Other sale of lease of goods or properties high cholesterol and hypertension
or the performance of services, the amount of
would be included as VAT exempt
which does not exceed P1,919,500*.
transactions.
*As adjusted by RR 16-2011
49
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
51
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
52
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Furthermore, VAT-registered
persons shall pay VAT on a
monthly basis.
53
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
VAT withholding Sec. 114 (C) The Government or Effective 1 January 2021, the VAT
by government any of its political subdivisions, withholding system shall shift
instrumentalities or agencies from final to a creditable
shall, before making payment system. Payments for purchase
of purchase of goods and of goods and services arising
services, deduct and withhold from Official Development
a final VAT at the rate of 5% of Assistance funded projects shall
the gross payment thereof not be subject to the final
withholding VAT.
54
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Tax on Shares
of Stock Listed & Sec. 127 (A) a tax rate of ½ of
The tax rate imposed is
Traded through 1% of the gross selling price or
increased to 6/10 of 1%.
Local Stock gross value in money of the
Exchange or shares of stock.
through IPO
55
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
56
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
0 P600,000 2% 0 P600,000 4%
2,100,000 512,000 +
60% in
excess of
2,100,000
57
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
58
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
60
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
VETOED BY MALACAÑANG]
On manufactured oils
and other fuels EXEMPTION OF SOME PETROLEUM
PRODUCTS
61
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
On non-essential (No current tax rule) Sec. 150-A Imposes a 5% tax on gross
goods and services receipts, net of excise tax and VAT derived
from performance of invasive cosmetic
surgeries, procedures, and body
enhancements for aesthetic purposes.
62
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
(No current
Excise Tax on Sweetened Beverages refer to non-alcoholic
tax rule)
Sweetened beverages of any constituion (liquid, power or
Beverages (SB) concentrates) that are pre-packed & sealed in
accordance with FDA standards that contain
caloric and/or non-caloric sweeterners added by
the manufacturers and shall include to the
following, as described in the Food Category
System from Codes Alimentarius Food Category
Descriptions:
63
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
(No current
Excise Tax on
tax rule)
Sweetened Sec. 150-B Imposes a tax per liter of volume
Beverages (SB) capacity on sweetened beverages based on the
following schedule:
64
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
65
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Sec. 151
• Excise tax of P10/metric ton Increased excise taxes on domestic or
Excise Tax
on coal and coke imported coal and coke, notwithstanding
Mineral Products
• 2% of actual market value of any incentives granted in any law or special
Coal & Coke
the gross output of all law, to wit:
nonmetallic minerals and
quarry resources Effective 1 Jan. 2018 PHP50/metric ton
• Metallic minerals are 1 Jan. 2019 100/metric ton
subject to the following 1 Jan. 2020 150/metric ton
taxes: • Increased excise tax on nonmetallic and
- copper and other metallic metallic minerals to 4%
minerals – 1 to 2%; • Increased excise tax on indigenous
- gold and chromite – 2% petroleum to 6%
• Indigenous petroleum is
subject to 3% excise tax
66
Adjustments in
Documentary Stamp Tax (DST)
67
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Keeping of Sec. 232 All that are required All that are required by law to
books by law to pay internal pay internal revenue taxes
Of accounts revenue taxes shall keep a shall keep and use relevant
journal and a ledger or their and appropriate set of
equivalents. bookkeeping records.
70
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
72
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
73
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Additional provisions:
(continued..) Sec. 237 (A)… • Within five years from the effectivity
Issuance of of the Act and upon establishment of a
receipts or sales system capable of storing and
or processing the required data, taxpayers
commercial engaged in the export of goods and
invoices services, e-commerce, and under the
jurisdiction of the Large Taxpayers
Service are required to ISSUE electronic
receipts or sales or commercial invoices
in lieu of manual receipts or sales
or commercial invoices.
74
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
75
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
76
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
77
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
78
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
79
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
80
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
81
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
82
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
Any person who commits any of the
On penalties –
following acts shall, upon conviction, be
No existing penalty
counterfiet FUEL punished by a fine of not less than P1M
provisions for offenses
MARKERS BUT NOT MORE THAN P5M and suffer
relating to fuel marking
imprisonment of not less than four years
but not more than eight years:
On penalties – ON No existing penalty Any person who willfully inserts, places, adds or attaches
PERSONS, FUEL provisions for directly or indirectly, through any overt or covert act,
MARKING offenses relating to whatever quantity of any unmarked fuel, counterfeit
fuel marking additive or chemical in the person, house, effects,
inventory, or in the immediate vicinity of an innocent
individual for the purpose of implicating, incriminating
or imputing the commission of any violation of this Act
shall, upon conviction, be punished by a fine of not less
than P5M BUT NOT MORE THAN P10M, and suffer
imprisonment of not less than four years but not more
than eight years.
84
NIRC of 1997 RA 10963
Tax Particulars (RA 8424 as amended) (Effective Jan. 1, 2018)
85
QUOTES
- Benjamin Franklin
Inventor and one of the Founding Fathers of the US
86
QUOTES
87
QUOTES
- Mark Twain
American Humorist
88
END OF PRESENTATION
HAVE A NICE DAY!
89