Description

Percentage tax is a business tax imposed on persons or entities/transactions:

a.
1. Who sell or lease goods, properties or services in the course of trade or business and are exempt
from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code, as
amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who are not
VAT-registered; and
2. Engaged in the following industries/ transactions:

a. Cars for rent or hire driven by the lessee, transportation contractors, including persons who transport passengers
for hire, and other domestic carriers of
passengers by land (except owners of animal-drawn two-wheeled vehicle) and keepers of garages

b. International air/shipping carriers doing business in the Philippines on their gross receipts derived from transport
of cargo from the Philippines to
another country

c. Franchise grantees of

radio and/or television broadcasting whose gross annual receipts for the
preceding year do not exceed Php 10,000,000.00 and did not opt to register as
VAT taxpayers
gas and water utilities

d. Overseas dispatch, message or conversation transmitted from the Philippines, except those transmitted by the
Philippine government, any embassy
and consular offices of a foreign government, public international organizations enjoying exemptions pursuant to
an international agreement and new
messages to a bona fide correspondent furnishing general news service

e. Banks and non-bank financial intermediaries performing quasi-banking functions

f. Other non-bank financial intermediaries (including pawnshops)

g. Person, company or corporation (except purely cooperative companies or associations) doing life insurance
business

h. Fire, marine or miscellaneous agents of foreign insurance companies

I. Proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball
games, Jai-Alai and racetracks,
including videoke bars, karaoke bars, karaoke televisions, karaoke boxes and music lounges

j. Winnings in horse races

h. Sale, barter or exchange of shares of stock listed and traded through the local stock exchange or through initial
public offering