Professional Documents
Culture Documents
Ateneo Law Journal - Perspectives On Donor's Tax Laws
Ateneo Law Journal - Perspectives On Donor's Tax Laws
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442
I. Estate Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444
A. Definition
and
Nature
of
Estate
Tax
B. Pertinent
Concepts
in
Estate
Taxation
II. DONORS
TAX/GIFT
TAX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459
A. Definition
and
Nature
of
Donors
Tax
B. Exemptions
from
Donors
Tax
C. Returns
and
Payment
of
Tax
D. Amendments
under
Tax
Reform
Act
of
1997
and
Donors
Tax
Rate
III. ESTATE
PLANNING
TOOLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463
A. Donations
During
Lifetime
B. Outright
Gift
or
Gift
in
Trust
C. Transfer
by
Sale
D. Life
Insurance/Life
Insurance
Trust
E. Family-Owned
Corporations
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477
2005]
443
Anyone
may
so
arrange
his
affairs
that
his
taxes
shall
be
as
low
as
possible:
he
is
not
bound
to
choose
that
pattern
which
best
pays
the
Treasury.
Everyone
does
it,
rich
and
poor
alike
and
all
do
right,
for
nobody
owes
any
public
duty
to
pay
more
than
the
law
demands:
taxes
are
forced
exactions,
not
voluntary
contributions.
Hand
- Judge Learned
INTRODUCTION
The
main
consideration
in
any
estate
planning
program
is
the
personal
wishes
and
requirements
of
the
client
and
his
family.
If
the
clients
goals
are
not
achieved,
then
the
plan
has
failed
in
its
primary
objective,
regardless
of
any
tax
savings
which
might
have
been
accomplished
by
the
plan.
Accordingly,
the
basic
purpose
of
an
estate
plan
is
to
devise
means
which
will
meet
the
personal
needs
and
desires
of
the
client.
In
proper
perspective,
tax
considerations
are
secondary,
but
they
can
never
be
ignored
because
they
may
bear
importance
on
whether
ones
ultimate
desires
are
in
fact
achieved.
Tax
considerations
in
estate
planning
are
by
no
means
limited
to
estate
and
gift
taxes.
The
income
tax
is
also
highly
relevant.
But,
even
if
taxes
are
secondary
in
importance
to
the
personal
goals
of
an
estate
owner,
and
even
if
all
forms
of
taxation
may
have
a
bearing
on
what
should
be
done,
it
remains
true
that
no
one
should
undertake
to
plan
his
estate
or
assist
another
to
do
so
without
a
basic
and
firm
understanding
of
the
estate
and
gift
tax
laws.
This
Article
will
identify
and
evaluate
the
commonly
adopted
methods
of
estate
planning
tools
available
under
the
Philippine
legal
system.
In
Parts
I
and
II,
there
will
be
a
general
discussion
of
estate
and
donors
taxation,
respectively,
as
provided
for
in
the
National
Internal
Revenue
Code
of
the
Philippines
(NIRC), 1
as
amended
by
the
Tax
Reform
Act
of
1997,2
and
pertinent
Bureau
of
Internal
Revenue
(BIR)
issuances,
circulars,
and
regulations.
1.
444
[vol. 50:442
Gross
Estate
Less:
Deductions
Allowed
Net
Estate
Less:
Share
of
Spouse
in
Conjugal
Property
Taxable
Net
Estate
PART
I:
ESTATE
TAX
A. Definition
and
Nature
of
Estate
Tax
It
has
been
stated
that
death
transfers
taxes,
or
the
taxation
of
property
transferred
by
an
individual
to
others
at
his
or
her
death
is
one
of
the
oldest
and
most
common
forms
of
taxation. 3
In
the
Philippines,
this
refers
to
estate
taxes.
An
estate
tax
is
a
tax
on
the
privilege
of
the
decedent
to
transmit
property
at
the
time
of
death.
As
such,
it
is
in
the
nature
of
an
excise
tax.4
The
tax
is
also
imposed
on
certain
transfers
of
property,
made
by
the
decedent
during
his
lifetime
which,
under
the
law,
are
in
the
nature
of
testamentary
dispositions.5
2005]
445
The
taxpayer
is
the
estate
of
the
deceased
person
and
not
the
heir
receiving
the
property.
The
estate,
when
used
in
connection
with
probate
proceedings,
encompasses
the
totality
of
assets
and
liabilities
of
the
decedent,
including
all
manner
of
property,
real
and
personal,
choate
or
inchoate,
corporeal,
or
incorporeal.6
Prior
to
1
January
1973,
an
inheritance
tax
was
also
imposed
on
the
legal
right
or
privilege
to
succeed,
with
the
heirs
as
the
taxpayers.
This,
however,
has
since
been
abolished
by
law.7
Under
the
New
Civil
Code
of
the
Philippines, 8
the
rights
to
succession
are
transmitted
at
the
moment
of
the
death
of
the
decedent.9
The
heirs
succeed
immediately
to
all
the
property
of
the
deceased
ancestorat
the
moment
of
death
as
completely
as
if
the
ancestor
had
executed
and
delivered
to
them
a
deed
for
the
same
before
his
death.10
Estate
tax
is
based
on
the
market
value
of
the
decedents
properties
at
the
time
of
his
death.11
Hence,
it
has
been
held
by
the
Supreme
Court
that:
6.
BLACKS
LAW
DICTIONARY
547
(6d
ed.
1990)
(citing
In
re:
Adams
Estate,
148
C.A.2d
319,
306
P.2d
623,
625
(1950)).
7.
Amending
Certain
Sections
of
the
National
Internal
Revenue
Code,
Presidential
Decree
No.
69
(1973).
8.
An
Act
to
Ordain
and
Institute
the
Civil
Code
of
the
Philippines
[NEW
CIVIL
CODE],
Republic
Act
No.
386
(1950).
9.
Id.
art.
777.
10.
Lorenzo
v.
Posadas,
64
Phil.
353,
360-61
(1937)
(citing
Bondad
v.
Bondad,
34
Phil.
232
(1916);
Mijares
v.
Nery,
3
Phil.
195
(1905);
Suiliong
&
Co.
v.
Chio-
Taysan,
12
Phil.
13
(1908);
Lubrico
v.
Arbado,
12
Phil.
391
(1909);
Inocencio
v.
Gatpandan,
14
Phil.
491
(1909);
Aliasas
v.
Alcantara,
16
Phil.
489
(1910);
Ilustre
v.
Alaras
Frondosa,
17
Phil.
321
(1910);
Malahacan
v.
Ignacio,
19
Phil.
434
(1911);
Bona
v.
Briones,
38
Phil.
276
(1918);
Osorio
v.
Osorio
&
Ynchausti
Steamship
Co.,
41
Phil.
531
(1921);
Fule
v.
Fule,
46
Phil.
317
(1924);
Dais
v.
Court
of
First
Instance
of
Capiz,
51
Phil.
396
(1928);
Baun
v.
Heirs
of
Baun,
53
Phil.
654
(1929)).
11.
It
is
interesting
to
note
that
in
the
United
States,
under
the
Federal
System
of
Estate
Taxation,
there
is
what
is
termed
as
alternate
valuation
election
where
the
assets
included
in
the
decedents
estate
may
be
valued
at
fair
market
value
as
of
six
months
from
after
the
decedents
death.
See
e.g.,
Roger
A.
McEowen,
Federal
Estate
Taxation
(October
2003),
available
at
446
[vol. 50:442
2005]
447
Decedents Interest
b)
448
[vol. 50:442
2005]
449
[t]he
apprehension
or
expectation
of
approaching
dissolution;
not
that
general
expectation
which
every
mortal
entertains,
but
the
apprehension
which
arises
from
some
presently
existing
sickness
or
physical
condition
or
from
some
impending
danger.
As
applied
to
transfers
of
property,
the
phrase
in
contemplation
of
death
means
that
thought
of
death
is
the
impelling
cause
of
transfer
and
that
motive
which
induces
transfer
is
of
the
sort
which
leads
to
testamentary
disposition
and
is
practically
equivalent
to
causa
mortis.25
2.
The
age
of
the
decedent
at
the
time
the
transfer
was
made.27
It
must
be
noted,
however,
that
age
will
always
be
an
extremely
vital
factor,
but
advanced
age
is
never
conclusive;28
The
decedents
health,
as
he
knew
it,
at
or
before
the
time
of
transfer. 29
This
has
been
held
as
one
of
the
most
important
evidentiary
factors;30
25.
See
BLACKS
LAW
DICTIONARY,
supra
note
6,
at
318
(citing
In
re:
Cornells
Estate,
66
A.D.
162,
73
N.Y.S.
32;
Nicholas
v.
Martin,
128
N.J.Eq.
344,
15
A.2d
235,
243;
Pate
v.
C.I.R.,
C.C.A.8,
149
F.2d
669,
670);
see
also
BLACKS
LAW
DICTIONARY,
supra
note
6,
at
1498
(Transfer
in
contemplation
of
death
is
defined
as:
[a]
transfer
made
under
a
present
apprehension
on
the
part
of
the
transferor,
from
some
existing
bodily
or
mental
condition
or
impending
peril,
creating
a
reasonable
fear
that
death
is
near
at
hand.)
26.
See
U.S.
v.
Sells,
283
U.S.
102
(1931).
27.
See
McLure
v.
Commissioner,
56
F.2d
548
(5th
Circuit),
cert.
denied,
287
U.S.
609,
53
S.Ct.
13
(1932).
28.
WILLIAM
J.
BOWE,
ESTATE
PLANNING
AND
TAXATION
232
(3d
ed.
1972).
29.
See
Estate
of
Johnson
v.
Commissioner,
10
T.C.
680
(1948).
30.
BOWE,
supra
note
28,
at
232.
450
3.
4.
[vol. 50:442
5.
6.
7.
8.
9.
31.
See
Becker
v.
St.
Louis
Union
Trust
Co.,
296
U.S.
48
(1935).
32.
See
Mclure
v.
Commissioner,
56
F.2d
548
(5th
Circuit),
cert.
denied,
287
U.S.
609,
53
S.Ct.
13
(1932).
33.
BOWE,
supra
note
28,
at
233.
34.
Id.
at
232
(For
example,
a
life
insurance
policy
is
particularly
vulnerable
to
attack,
as
insurance
is
intimately
connected
to
death.).
35.
See
Vanderlip
v.
Commissioner,
155
F.2d
152
(2nd
Circuit),
cert.
denied,
329
U.S.
728,
67
S.Ct.
83
(1946).
36.
BOWE,
supra
note
28,
at
234.
37.
See
LLAMADO
JR.,
supra
note
5,
at
33.
2005]
451
Valuation
452
[vol. 50:442
2005]
453
454
[vol. 50:442
2005]
455
settlement
and
the
attorneys
fees
paid
to
the
guardian
of
the
property
during
the
decedents
property
were
deductible
expenses.59
For
clarity,
RR
No.
2-2003
has
expressly
provided
that
judicial
expenses
may
include:
fees
of
executor
or
administrator,
attorneys
fees,
court
fees,
accountants
fees,
appraisers
fees,
clerk
hire,
costs
of
preserving
and
distributing
the
estate,
costs
of
storing
or
maintaining
property
of
the
estate,
and
brokerage
fees
for
selling
property
of
the
estate.60
c)
Claims
against
the
estate
refer
to
obligations
and
debts
which
are
enforceable
against
the
decedent. 62
The
claims
against
the
estate
include
taxes
due
from
the
decedent
or
for
indebtedness.
In
the
case
of
indebtedness,
it
is
necessary
that
the
following
conditions
be
complied
with:
that
at
the
time
it
was
incurred,
the
debt
instrument
was
duly
notarized
and,
if
the
loan
was
contracted
within
three
years
before
the
death
of
the
decedent,
the
administrator
or
executor
shall
have
submitted
a
statement
showing
the
disposition
of
the
loan
proceeds.
d)
456
[vol. 50:442
Unpaid Mortgage65
2005]
457
Table 2 PERCENTAGES OF VANISHING DEDUCTION
100%
-
within
1
year
80%
-
+1
year-2
years
60%
-
+2
years-3
years
40%
-
+3
years-4
years
20%
-
+4
years
-5
years
h)
Any
transfer
for
public
use
is
deductible
from
the
gross
estate
of
the
decedent.
The
requirement
is
that
the
amount
of
all
bequests,
legacies,
devices,
or
transfers
to
or
for
the
use
of
the
Government
of
the
Republic
of
the
Philippines,
or
any
political
subdivision
thereof,
for
exclusively
public
purposes.
i)
458
j)
[vol. 50:442
Standard Deduction72
Medical Expenses73
All
medical
expenses,
such
as
the
cost
of
medicines,
hospital
bills,
and
doctors
fees,
among
others,
are
deductible,
subject
to
certain
conditions.
The
medical
expenses,
whether
paid
or
unpaid,
must
be
incurred
within
one
year
before
the
death
of
the
decedent,
and
must
be
duly
substantiated
with
official
receipts
for
services
rendered
by
the
decedents
attending
physicians,
invoices,
statements
of
account
duly
certified
by
the
hospital,
and
such
other
documents
in
support
thereof.
The
maximum
amount
allowed
as
deduction,
whether
paid
or
unpaid,
however,
should
not
exceed
Five
Hundred
Thousand
Pesos
(P500,000).
l)
2005]
459
460
[vol. 50:442
heirs
of
the
decedent,
within
six
months
from
the
decedents
death.
This
particular
portion
of
the
NIRC
was
amended
by
Republic
Act
No.
7499.80
The
six
month
period
may
be
extended
by
the
CIR
for
not
more
than
30
days
for
meritorious
grounds.
The
final
stage
is
the
payment
of
the
estate
tax.81
It
should
be
noted
that
the
accrual
of
the
inheritance
tax
is
distinct
from
the
obligation
to
pay
the
same.82
The
estate
taxes
are
paid
simultaneously
with
the
filing
of
the
return,
as
it
is
due
and
payable
at
the
same
time
the
return
is
filed.
The
period
of
payment
may
be
extended
by
the
CIR
if
he
finds
that
the
payment
on
the
due
date
of
the
estate
tax
or
any
part
of
the
said
amount
would
impose
undue
hardship
upon
the
estate
or
any
of
the
heirs.
This
extension
of
payment
is
not
to
exceed
five
years
in
case
the
estate
is
settled
judicially
or
two
years
if
the
estate
is
settled
extra-
judicially.
5. Summary
of
Amendments
under
the
Tax
Reform
Act
of
1997
(TRA)
There
are
significant
amendments
in
estate
taxation
that
were
introduced
by
the
Tax
Reform
Act
of
1997.
These
amendments
have
been
implemented
by
RR
No.
2-2003.
They
are
summarized
below:
1.
2.
3.
4.
80.
An
Act
Restructuring
the
Estate
and
Donors
Taxes,
Amending
for
the
Purpose
Sections
77,
79(a),
83(b)
and
92
(a)
and
(b)
on
Transfer
Taxes
of
the
National
Internal
Revenue
Code,
as
Amended,
Republic
Act
No.
7499
(1992).
81.
NIRC,
91.
82.
Lorenzo
v.
Posadas,
64
Phil.
353,
360
(1937).
83.
NIRC,
86
(A)(5).
2005]
461
5.
6.
Over
The
Tax
Shall
Be
Plus
Of
the
Excess
Over
P200,000
Exempt
P200,000
500,000
5%
P200,000
500,000
2,000,000
P15,000
8%
500,000
2,000,000
5,000,000
135,000
11%
2,000,000
5,000,000
10,000,000
465,000
15%
5,000,000
10,000,000
And Over
1,215,000
20%
10,000,000
PART
II:
DONORS
TAX/GIFT
TAX
462
[vol. 50:442
2005]
463
464
3.
4.
5.
[vol. 50:442
2.
3.
2005]
465
The
Tax
Shall
Be
Plus
P100,000 Exempt
P100,000
200,000
2%
P100,000
200,000
500,000
2,000
4%
200,000
500,000
1,000,000
14,000
6%
500,000
1,000,000
3,000,000
44,000
8%
1,000,000
3,000,000
5,000,000
204,000
10%
3,000,000
5,000,000
10,000,000
404,000
12%
5,000,000
1,004,000
15%
10,000,000
10,000,000
PART
III:
ESTATE
PLANNING
TOOLS
Estate
planning
is
the
methodical
building,
conserving,
and
transferring
of
wealth
with
the
least
tax
impact.104
It
is
also
referred
to
as
[t]hat
branch
of
the
law
which,
in
arranging
a
persons
property
and
estate,
takes
into
account
the
laws
of
wills,
taxes,
insurance,
property,
101.
An
Act
Adopting
the
Simplified
Net
Income
Taxation
Scheme
for
the
Self-
Employed
and
Professionals
Engaged
in
the
Practice
of
their
Profession,
Amending
Sections
21
and
29
of
the
National
Internal
Revenue
Code,
as
Amended,
Republic
Act
No.
7496
(1992)
(complaints
from
family
members
initiated
this
amendment
when
R.A.
No.
7496
introduced
the
10%
rate
on
donations
to
stranger).
102.
RR
2-2003,
10.
103.
The
foregoing
are
only
the
scheduler
rates.
In
case
the
donee
is
a
stranger,
the
30%
rate
will
apply.
104.
MATIC,
JR.,
supra
note
24,
at
316.
466
[vol. 50:442
2.
2005]
467
3.
4.
5.
P1,215,000
P164,000 x 4 = P656,000
468
[vol. 50:442
2005]
469
470
[vol. 50:442
2.
the power to amend the trust should not be reserved in any way;
3.
no
part
of
the
income
of
the
trust
should
be
used
for
the
benefit
or
the
discharge
of
the
obligations
of
the
grantor;
4.
5.
the
grantor
must
not
retain
the
power
to
change
the
enjoyment
of
the
income
or
principal
of
a
trust;
6.
the
grantor
must
not
retain
any
discretion
over
the
distribution
of
the
income
of
the
trust;
7.
the
trust
must
not
terminate
upon
the
death
or
within
any
period
counted
from
the
death
of
the
grantor.
121.
NEW
CIVIL
CODE,
art.
1440.
The
parties
involved
in
a
trust
are
the
trustor,
trustee
and
beneficiary.
The
Civil
Code
defines
these
individuals
as
such:
A
person
who
establishes
a
trust
is
called
the
trustor;
one
in
whom
confidence
is
reposed
as
regards
property
for
the
benefit
of
another
person
is
known
as
the
trustee;
and
the
person
for
whose
benefit
the
trust
has
been
created
is
referred
to
as
the
beneficiary.
2005]
471
122.
Trusts
may
be
any
of
the
following:
a
living
trust
(created
to
function
during
the
decedents
lifetime),
a
short-term
trust
(one
created
for
a
relatively
short
time),
or
a
testamentary
trust
(one
created
by
will
or
testament);
or
they
may
be
irrevocable
trusts,
grandfather
trust,
multiple
trust,
generation-skipping
trust,
or
others.
123.
NEW
CIVIL
CODE,
1458
(By
the
contract
of
sale
one
of
the
contracting
parties
obligates
himself
to
transfer
the
ownership
and
to
deliver
a
determinate
thing,
and
the
other
to
pay
therefor
a
price
certain
in
money
or
its
equivalent.).
124.
Id.
1470
(Gross
inadequacy
of
price
does
not
affect
a
contract
of
sale,
except
as
it
may
indicate
a
defect
in
the
consent,
or
that
the
parties
really
intended
a
donation
or
some
other
act
or
contract.).
472
[vol. 50:442
2005]
473
474
[vol. 50:442
2005]
475
476
[vol. 50:442
2005]
477
478
[vol. 50:442
percent
on
the
first
P100,000
of
net
gain,
and
10
percent
on
the
excess.138
These
rates
apply
only
with
respect
to
shares
of
stock
not
traded
in
the
stock
exchange.
Different
rates
apply
in
case
the
shares
of
stock
are
traded
in
the
stock
exchange.
Thus,
the
capital
gains
tax
on
the
shares
of
stock
which
are
not
listed
or
traded
in
the
stock
exchange
is
a
maximum
rate
of
10
percent,
which
is
concededly
lower
than
the
maximum
donors
tax
rate
of
15
percent.
3. Pitfalls
of
a
Family
Corporation
While
the
corporate
set-up
has
a
number
of
advantages,
there
are
certain
pitfalls
that
must
be
carefully
considered.
a)
5%
2005]
479
Id.
29(A).
Section
29.
Imposition
of
Improperly
Accumulated
Earnings
Tax.
(A)
In
General.
In
addition
to
other
taxes
imposed
by
this
Title,
there
is
hereby
imposed
for
each
taxable
year
on
the
improperly
accumulated
taxable
income
of
each
corporation
described
in
Subsection
B
hereof,
an
improperly
accumulated
earnings
tax
equal
to
ten
percent
(10%)
of
the
improperly
accumulated
taxable
income.
480
[vol. 50:442
d)
Tax
Free
Exchange
may
be
Considered
as
Deemed
Sale
for
VAT
Purposes143
It
is
important
to
take
into
consideration
Revenue
Regulations
No.
14-
2005
(RR
14-2005),144
which
are
the
Implementing
Regulations
for
the
new
Value
Added
Tax
(VAT)
law. 145
Under
RR
14-2005,
there
is
a
provision
which
states
that
tax
free
exchange
under
Section
40(C)(2)
of
the
NIRC
will
be
considered
as
deemed
sale
for
VAT
purposes
under
Section
106(B)(4)
of
the
NIRC,
as
amended
by
the
new
VAT
law.146
143.
It
must
be
stressed
at
the
outset
that
as
of
this
writing,
the
Implementing
Regulations
have
not
yet
been
implemented
and
are
subject
of
a
Temporary
Restraining
Order
by
the
Supreme
Court
until
the
finality
of
the
decision
in
the
case
Abakada
Guro
Party
List,
et
al.
v.
Executive
Secretary
Eduardo
Ermita
(G.R.
No.
168506,
Sept.
1,
2005).
These
Implementing
Regulations
are
currently
being
revised
by
the
Department
of
Finance,
thus
the
use
of
the
word
may.
If
these
Implementing
Regulations
are
implemented,
tax
free
exchanges
will
be
considered
as
deemed
sale
for
Value
Added
Tax
(VAT)
purposes.
144.
Consolidated
Value-Added
Tax
Regulations
of
2005,
Revenue
Regulations
No.
14-2005
(2005)
[RR
14-2005].
145.
An
Act
Amending
Sections
27,
28,
34,
106,
107,
108,
109,
120,
111,
112,
113,
114,
116,
117,
119,
121,
148,
151,
236,
237
and
288
of
the
National
Internal
Revenue
Code
of
1997,
as
Amended,
and
for
Other
Purposes,
Republic
Act
No.
9337
(2004).
146.
RR
14-2005,
4.106
-
7,
4.016
-
8(B)(1).
Section
4.106
-
7
provides:
Section
4.106
-
7.
Transactions
Deemed
Sale.
(a)
The
following
transactions
shall
be
deemed
sale:
pursuant
to
Section
106(B)
of
the
Tax
Code:
x
x
x
(2)
Retirement
from
or
cessation
of
business
with
respect
to
all
goods
on
handThe
following
circumstances,
shall,
among
others,
give
rise
to
transactions
deemed
sale.
x
x
x
(i)
Change
of
Ownership
of
the
Business.
There
is
a
change
of
ownership
of
the
business
when
a
single
proprietorship
incorporates;
or
the
proprietor
of
a
single
proprietorship
sells
his
entire
business.
Section
4.106
-
8(b)(1)
provides
that
there
is
no
output
tax
due
in
the
case
of
change
of
control
of
a
corporation
by
the
acquisition
by
the
controlling
interest
2005]
481
482
[vol. 50:442
2005]
483
Illustration 2 Comparison
Sale
As
Ordinary
Asset
Estate
Tax
As
Capital
Asset
6%
tax
Donors
Tax
2%-15%
graduated
rates
Sale
of
Shares
after
Tax
Free
Exchange153
5%
on
first
P100,000,
plus
10%
on
excess
of
net
gain
Tax Due
Tax Due
Tax Due
Tax Due
Tax Due
P600,000
P3,165,000
P1,215,000
P1,004,000
P995,000
Note:
If
donated
at
P5M
each
(spouses)
Assumption:
No
cost
basis
or
other
expenses
of
tax
free
exchange
Assumption:
Assumption
No
cost
:
basis
No
deduction
Tax
Due
P808,000
(P404,000
x
2)
153.
Take
note
of
the
effect
of
the
Implementing
Regulations
of
the
new
VAT
law
as
explained
in
this
Article.
The
computation
given
here
does
not
take
into
consideration
the
effects
of
VAT.