Professional Documents
Culture Documents
RA 10963 Tax Reform For Acceleration and Inclusion
RA 10963 Tax Reform For Acceleration and Inclusion
5636
S. No. 1592
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Begun and held in Metro Manila, on Monday, twenty-fourth
day of July, two thousand seventeen.
SECTION 1. Title. - This Act shall be known as the "Tax addresses, and financial statements ofcorporations,
Reform for Acceleration and Inclusion (TRAIN)". mutual fund companies, insurance companies,
SEC. 2. Declaration ofPolicy. - It is hereby declared the regional operating headquarters of multinational
policy of the State: companies, joint accounts, associations, joint ventures
or consortia and registered partnerships, and their
(a) To enhance the progressivity of the tax system through members: Provided, That the Cooperative
the rationalization of the Philippine internal revenue tax system, Development Authority shall submit to the Bureau a
thereby promoting sustainable and inclusive economic growth; tax incentive report, which shall include information
on the income tax, value-added tax, and other tax
(b) To provide, as much as possible, an equitable relief to a
incentives availed of by cooperatives registered and
greater number of taxpayers and their families in order to improve
enjoying incentives under Republic Act No. 6938, as
levels of disposable income and increase economic activity; and
amended: Provided, further, That the information
(c) To ensure that the government is able to provide for the submitted by the Cooperative Development Authority
needs of those under its jurisdiction and care through the provision to the Bureau shall be submitted to the Department
of better infrastructure, health, education, jobs, and social of Finance and shall be included in the database
protection for the people. created under Republic Act No. 10708, otherwise
known as 'The Tax Incentives Management and
SEC. 3. Section 5 of the National Internal Revenue Code of Transparency Act (TIMTA)'.
1997 (NIRC), as amended, is hereby further amended to read as
follows: "xxx."
"SEC. 5. Power of the Commissioner to Obtain SEC. 4. Section 6 of the NIRC, as amended, is hereby
Information, and to Summon, Examine, and Take further amended to read ~s follows:
Testimony of Persons. - In ascertaining the
correctness of any return, or in making a return when "SEC. 6. Power of the Commissioner to
none has been made, or in determining the liability Make Assessments and Prescribe Additional
of any person for any internal revenue tax, or in Requirements for Tax Administration and
collecting any such liability, or in evaluating tax Enforcement. -
compliance, the Commissioner is authorized:
"(A) Examination of Returns and
"(A) XX X Determination of Tax Due. - After a return has
been filed as required under the provisions of this
"(B) To obtain on a regular basis from any Code, the Commissioner or his duly authorized
person other than the person whose internal representative may authorize the examination of any
revenue tax liability is subject to audit or taxpayer and the assessment of the correct amount
investigation, or from any office or officer of the of tax, notwithstanding any law requiring the prior
national.and local governments, government agencies authorization of any government agency or
and instrumentalities, including the Bangko Sentral instrumentality: Provided, however, That failure to
ng Pilipinas and government-owned or -controlled file a return shall not prevent the Commissioner from
corporations, any information such as, but not limited authorizing the examination of any taxpayer.
to, costs and volume of production, receipts or sales
and gross incomes of taxpayers, and the names, "xxx
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"(a) Tax Schedule Effective January 1, 2018 pay received by such minimum wage earners shall
until December 31, 2022: likewise be exempt from income tax.
"For married individuals, the husband and "(2) All Income from Business or Practice of
wife, subject to the provision of Section 51(D) hereof, Profession -
shall compute separately their individual income tax
based on their respective total taxable income:
"(a) If Total Gross Sales and/or Gross Receip~
Provided, That if any income cannot be definitely
and Other Non-operating Income Do Not Exceed the
attributed to or identified as income exclusively
VAT Threshold as Provided in Section 109(BB) ofthis
earned or realized by either of the spouses, the same
Code. - The r ates prescribed under Subsection
shall be divided equally between the spouses for the
(A)(2)(a) of this Section on taxable income, or eight .
purpose of determining their respective taxable
percent (8%) income tax based on gross sales or gross
income.
receipts and other non-operating income in lieu of
the graduated income tax rates under Subsection
"Provided, That minimum wage earners as (A)(2)(a) of this Section and the percentage tax under
defined in Section 22(HH) of this Code shall be exempt Section 116 of this Code.
from the payment of income tax on their taxable
income: Provided, further, That the. holiday pay,
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"(b) If Total Gross Sales and/or Gross Receipts the long-term deposit or investment certificate based
and Other Non-operating Income Exceeds the on the remaining maturity thereof:
VAT Threshold as Provided in Section 109(BB) ofthis
Code. - The rates prescribed under Subsection "xxx."
(A)(2)(a) of this Section.
"(2) Cash and/or 'Property Dividends. - A
"(B) Rate of Tax on Certain Passive final tax at the rate oft.en percent (10%) shall be
Income: - imposed upon the cash and/or property dividends
actually or constructively received by an individual
"(1) Interests, Royalties, Prizes, and Other from a domestic corporation or from a joint stock
Winnings. - A final tax at the rat.e of twenty percent company, insurance or mutual fund companies and
(20%) is hereby imposed upon the amount of interest regional operating headquarters of multinational
from any currency bank deposit and.yield. or any other companies, or on the share of an individual in the
· monetary benefit from deposit substi.tut.es and from distributable net income after ~ of a partnership .
. trust funds and similar arrangements; royalties, (except a general professional partnership).o fwhich .
except on books, as well as other literary works and he is a partner, or on the share of an individual in
musical compositions, which shall be imposed a final the. net income after tax of an association, a joint
tax of ten percent {10%); prizes (except prizes account, or a joint venture or consortium taxable as
amounting to Ten thousand pesos (Pl0,000) or less a corporation of which he is a member or co-venturer.
which shall be subject to tax under Subsection (A) of
Section 24; and other winnings .(except winnings "(C) Capital Dams from Sak ofShares ofSrock
amounting to Ten thousand pesos (Pl0,000) or less not Traded in the Stock Exchange. - The provisions
from Philippine Charity Sweepstakes and Lotto which of Section 39(B) notwi~anding, a final tax at the
shall be exempt), derived from sources within the rat.e of fifteen percent (15%) is hereby imposed upon
Philippines: Provickd, however, Thatinterestincome . the net capiuµ gains reafued du,ring the taxable year
received by an individual faxpayer (except' a .from the sale, barter, exchange or other disposition
nonresident individual) from a d.eposit.ory bank under of shares of st.ock in a domestic corporation, except
the expanded foreign currency deposit system shall shares sold, or disposed of through the stock
be subject to a final income tax at the rate of fifteen exchange.
percent (15%) of such interest income: Provided,
further, That interest income from long-term deposit "xxx."
or investment in the form of savings, common or
individual trust funds, depositsubstitut.es, investment SEC. 6. Section 25 of the NIRC, as amended, is hereby
management accounts and other investments further amended t.o read as follows:
evidenced by certificates in such form prescribed by
the Bangko Sentralng Pilipinas (BSP) shall be exempt "SEC. 25. Tax on Nonresident Alien
from the tax imposed under this Subsection: Individual. -
Provided, finally, That should the holder of the
"(A) Nonresident Alien Engaged in Trade or
certificate pre-terminat.e the deposit or investment
Business Within the Philippines. -
before the fifth (5th) year, a final tax shall be imposed
on the entire income and shall be deducted and "xxx
withheld by the deposit.ory bank from the proceeds of
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"(il) Benefits received by employees pursuant value of the fringe benefit by the difference between
to Presidential Decree No. 851, as amended by one hundred percent (100%) and the applicable rat.es
Memorandum Order No. 28, dat.edAugust 13, 1986; ofincome tax under Subsections (B), (C), (D), and (E)
ofSection 25.
"(in) Benefits received by officials and
. employees not covered by Presidential Decree No. 851, "xxL"
as amended by Memorandum Order No. 28, dated
August13,1986;and SEC. 11. Section 34 of the NIRC, as amended, is hereby
further amended to read as follows:
"(iv) Other benefits such as productivity
incentives and Christmas bonus." "SEC. 34. Deductions from Gross Income. -
Except for taxpayers earning compensation income
SEC. 10. Section 33 of the NIRC, as amended, is hereby arising from personal services rendered under an
further amended t.o read as follows: employer-employee relationship where no deductions
shall be allowed under this Section, in computing
"SEC. 33. .Sp~cial . Treatment of Fringe
taxabie income subject to income tax under Sections .
24(A); 25(A); 26; 27{A), (B); an,f (C); and 28(A)(l), there
Benefit. -
shall be allowed the following deductions from gross
income:
"(A) Imposition of Tax. - Effective
January 1, 2018 and onwards, a final tax of
"(A) Expenses. -
thirty-five percent (35%) is hereby imposed on the
grossed-up monetary value offringe benefit furnished
or granted t.o the employee (except rank and file "(1) Ordinary and Necessary Trade, Business
employees as defined herein) bythe employer, whether or Professional Expenses. -
an ·individual or a corporation (unless the fringe
benefit is required by .t he nature of, or necessary to "(a) In General. - xx x .
the trade, business or profession of the employer, or
when the fringe benefit is for the convenience or "xxx
advantage of the employer). The t.ax herein imposed
is payable by the employer which t.ax shall be .P aid in "(L) Optional Standard Deduction (OSD). -
the same manner as provided for under Section 57(A) In lieu of the deductions allowed under the preceding
of this Code. The grossed-up monetary value of the Subsections, an individual subject to tax under
fringe benefit shall be determined by dividing the Section 24, other than a nonresident alien, may elect
actual monetary value ofthe fringe benefit by sixty- a standard deduction inan amount not exceeding forty
five percent (65%) effective January· 1, 2018 and percent (40%) of his gross sales or gross receipts, as
onwards: Provided, however, That fringe benefit the case may be. In the case of a corporation subject
· furnished t.o employees and taxable under Subsections to tax under Sections 27(A) and 28(A)(l), it may elect
(B), (C), (D), and (E) of Section 25 shall be taxed at a standard deduction in an amount not exceeding forty
the applicable rates imposed thereat: Provided, percent (40%) ofits gross income as defined in Section
further, That the grossed-up value ofthe fringe benefit 32 of this Code. Unless the taxpayer signifies in his
shall be determined by dividing the actual monetary return his intention to elect the optional standard
deduction. he eh.all be considered as having availed "(2) The following individuals shall not be
himself of the deductions allowed in the preceding required to file an income tax return:
Subsections. Such election when made in the return
shall be irrevocable for the taxable year for which "(a) An individual whose taxable income does
the return is made: Provided, That an individual not exceed Two hundred fifty thousand peeos
whoisentitledtoandclaimedfurtheoptionalstand.ard (P250,000) under Section 24(A)(2)(a): Provuled, That
deduction shall not be required to submit with his a citizen of the Philippines and any alien individual
tax return such financial statements otherwise engaged in business or practice of profession within
required under this Code: Provu:kd, further, That a the Philippines shall file an income tax return,
general professional partnership and the partners regardless of the amount of gross income;
comprising such partnership may avail ofthe optional
standard deduction only once, either by the general "xxx
professional partnership or the partners comprising
the partnership: Provided, finally, That except when "(5) The income tax return (ITR) shall consist
the Commissioner otherwise permits, the said of a maximum of.four (4) _pages in paper form or
individual shall keep such r~cords pertaining_to his . · electronicforni, and shall only contain the following
gross sales or
or gross receipts, the said corporation . information: .· .
shall keep such records pertainingt.o his gross income
as defined in Section 32 ofthis Code during the taxable
"(A) Personal profile and information;
year, as may be required by the rules and regulations
promulgated by the Secretary of Finance, upon
recommendation of the Commissioner. "(B) Total gross sales, receipts or income from
compensation for services rendered, conduct oftrade
or business or the exercise of a profession, except
"Notwithstanding the provisions of the
income subject to final tax as provided under this
preceding Subsections, xx x."
Code;
"(1) Corporate profile and information; SEC. 17. Section 57 of the NIRC: as amended, is hereby
further amended to read as follows:
"(2) Gross sales, receipts or income from
"SEC. 57. Withholding of Tax at Source. -
services rendered, or conduct of trade or business,
except income subject to final tax as provided under
this Code; "(A) XXX
"(3) Allowable deductions under this Code; "(B) Withholding of Creditable Tax at Source.
- The Secretary of Finance may, upon :the
recommendation of the Commissioner, require the
"(4) Taxable income as defined in Section 31
withholding of a tax on the items of income payable
of this Code; and
to natural or juridical persons, residing in the
Philippines, by payor-corporation/persons as
"(5) Income tax due and payable. provided for by law, at the rate of not less than
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one percent (1%) but not more than thirty-two percent taxable year on or before May 15 ofthe same t.axable
(32%) thereof, which shall be credited against the year. XXX
income tax liability of the taxpayer for the taxable
year: Provided, That, beginning January 1, 2019, "(B) Return and Payment ofEstimatedinco_me
the rate of withholding shall not be less than one Tax by Individuals. - The amount of estimated
percent (1 %) but not more than fifteen percent (15%) income as defined in Subsection (C) with respect to
of the income payment. which a declaration is required under Subsection (A)
shall be paid in four (4) installments. The first
"(C) xxx." installment shall be paid at the time of declaration
and the second and third shall be paid on August 15
SEC. 18. Section 58 of the NIRC, as amended, is hereby and November 15 of the current year, respectively.
further amended to read as follows: The fourth installment shall be paid on or before May
15 of the following calendar year when the final
"SEC. 58. Return and Payment of Taxes adjusted income tax return is due to be filed.
Withheld at Source. -
"(C)xxx."'
"(A)xxx
SEC. 21. Section 79 of the NIRC, as amended, is hereby
"xxx further amended to read as follows:
''The return for final and creditable withholding "SEC. 79. Income Tax Collected at Source. -
taxes shall be filed and the payment made not later
than the last day of the month following the close of "xxx
the quarter during which withholding was made."
SEC. 19. Section 62 of the NIRC, as amended, is her,eby "(C) Reft,,ruis or Credits. -
repealed.
SEC. 20. Section 74 of the NIRC, as amended, is hereby
"(1) Employer: - xx x
further amended to read as follows:
"(2) Employees. - x x x
"SEC. 74.. Declaration of Income Tax for
Individuals. - "xxx
I
! .
"One h1D1dred percent (100%) .o f the value, if allowable under paragraph (5) in respect of the
the prior decedent died within one (1) year prior to property or properties given in exchange therefor.
the death of the decedent, or if the property was
Where a deduction was allowed of any mortgage or
transferred to him by gift, within the same period other lien in determining the donor's tax, or the estate
prior to his death;
tax of the prior decedent, which was paid in whole or
in part prior to the decedent's death, then the
"Eighty percent (80%) of the value, if the prior deduction allowable under said Subsection shall be
decedent died more than one (1) year but not more reduced by the amount so paid. Such deduction
than two (2) years prior to the death of the decedent, allowable shall be reduced by an amount which bears
or ifthe property was transferred to him by gift within the same ratio to the amounts allowed as deductions
the same period prior to his death; under paragraphs (2), (3), (4), and (6) of this
Subsection as the amount otherwise deductible under
"Sixty percent (60%) of the value, if the prior said paragraph (5) bears to the value ofthe decedent's
decedent died more than two (2) years but not more estate. Where the property referred to consists of two
than three (3) years prior to the death ofthe decedent, _or more items, the aggregate value of such items shall
orifthepropertyw~ transfe~ to him by gift within · be uaed for the purpose.ofcomputing the deduction..
the same period prior to his death; ·
"(6) Transfers for Public Use. - The amount
''Forty percent (40%) of the value, if the prior of all bequests, legacies, devises or transfers to or for
decedent died more than three (3) years but not more the use of the Government of the Republic of the
than four (4) years prior t.o the death of the decedent, Philippines, or any political subdivision thereof, for
or ifthe property was transferred to him by gift within exclusively public purposes.
the same period prior to his death; and
"(7) The Family Home . - An amount
"Twenty percent (20%) ofthe value, ifthe prior equivalent to the current fair market value of the
.:~
decedent died more than four (4) years but not more decedent's family home: Provided, however, That if
than five (5) years prior to the death of the decedent, the said Cl,U:rent fair marketval~e exceeds Ten million
oriftbe property was transferred to him by gift within pesos (Pl0,000,000), the excess shall be subject to
the same period prior to his death. estate tax.
"These deductions shall be allowed only where "(8) Amount Received by Heirs Under Republic
a donor's tax, or estate tax imposed under this Title Act No. 4917. - .Any amount received by the heirs
was finally determined and paid by or on behalf of from the decedent's employee as a consequence of the
such donor, or the estate of such prior decedent, as death of the decedent-employee in accordance with
the case may be, and only in the amount finally Republic Act No. 4917: Provided, That such amount
determined as the value of such property in is included in the gross estate of the decedent.
determining the value of the gut, or the gross estate
of such prior decedent, and only to the extent that "(B) Deductions Allowed to Nonresident
the value ofsuch property is included in the decedent's Estates. - In the case of a nonresident not a citizen
gross estate, and only ifin determining the value of of the Philippines, by deducting from the value of
the estate of the prior decedent, no deduction was
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"(4) Transfers for Public Use. - The amount SEC. 24. Section 89 of the NIRC, as amended, is hereby
of all bequests, legacies, devises or transfers to or for repealed.
the use of the Government of the Republic of the
Philippines or any political subdivision thereof, for
SEC. 25. Section 90 of the NIRC, as am.ended, is hereby
exclusively public purposes.
further amended to read as follows:
"(C) Share in the Conjugal Property. - The
"SEC~90. Estate Tax Returns. -
net share of the surviving spouse in the conjugal
partnership property as diminished by the obligatioi;is
properly chargeable to such property shall, for the "(A) Requirements. - In.all cases oftransf~rs
purpose of this Section, be deducted from the net -subject to the tu imposed herein, or regardless of
estate of the decedent. the gross value of the estate, where the said estate
consists of registered or registrable property such as
real property, motor vehicle, shares of stock or other
"(D) Tax Credit for Estate Taxes Paid to a
similar property for which a clearance from the
Foreign Country. -
Bureau of Internal Revenue is required as a condition
precedent for the transfer of ownership thereofin the
"(1) In General. - The tax imposed by this name of the transferee, the executor, or the
Title shall be credited with the amounts of any estate administrator, or any of the legal heirs, as the case
tax imposed by the authority of a foreign country. may be, shall file a return under oath in duplicate,
setting forth:
"(2) Limitations on Credit. - The amount of
the credit taken under this Section shall be subject "(1) XXX
to each of the following limitations:
"(2) XXX
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"(3) Such part of such information as may at SEC. 27. Section 97 of the NIRC, as amended, is hereby
the time be ascert.ainable and such supplemental data further amended to read as follows:
as may be necessary to establish the correct taxes.
"SEC. 97. Payment of Tax .Antecedent to the
"Provided, however, That estate tax returns Transfer of Sh.ares, Bonds or Rights. - x x x.
showing a gross value exceeding Five million pesos
(P5,000,000) shall be supported with a statement duly "If a bank has knowledge of the death of a
certified to by a Certified Public Accountant person, who maintained a bank deposit account alone,
cont.aining the following: or jointly with another, it shall allow any withdrawal
-. .
.. from the said deposit account, subject to a final
"xxx withholding tax of six percent (6%). For this purpose,
all withdrawal slips shall contain a statement to the
"(B) Time for Filing. - For the purpose of effect that all of the joint depositors are still living at
determining the-estate tax provided for in SectionM - the time of withdrawal by any one of the joint
.·of1;his Code, the·esta~ taxretui'n ~~quii:ed wider the_ depo~rs ari.d such s~temenhhall be under oath
preceding Subsection (A) shall be filed within one (I) by the said depositors."
year from the decedent's death.
SEC. 28. Section 99 of the NIRC, as amended, is hereby
"x xx." further amended to read as follows:
SEC. 26. Section 91 of the NIRC, as amended, is hereby "SEC. 99. Rate of Tax Payable by Donor. -
further amended to read as follows:
"(A) In General. - The tax for each calendar
"SEC. 91. Payment of Tax.:.... year shall be six percent (6%) computed on the basis
of the total gifts in excess of Two hundred. fifty
thousand pesos (P250,000) exempt gift made during_
"(A) Time of Payment. - x xx
the calendar year.
is transferred for less than an adequate and full charitable corporation, accredited nongovernment
consideration in money or money's worth. then the organization, trust or philanthropic organization and/
amount by which the fair market value ofthe property or research institution or organization, incorporated
exceeded the value ofthe consideration shall. for the .as a nonstock entity, paying no dividends, governed
purpose ofthe tax imposed by this Chapter, be deemed bytrust.ees who receive no compensation, and devoting
a gift, and shall be included in computing the amount allitsincome, whether students' fees or gifts,.dona~
of gifts made during the calendar year: Provided, subsidies or other forms of philanthropy, to the
however, That a sale, exchange, or other transfer of accomplishment and promotion of the purposes
property made in the ordinary course of business enumerated in its Articles ofIncorporation.
(a transaction which is a bona fide, at arm's length,
and free from any donative intent); will be considered "xxx."
as made for an adequate and full consideration in
money or money's worth." ·-,.. ..
·· :-· SEC. 31. Section 106 of the NIRC, as amended, is hereby
further amended to read as follows:
. SEC. 30.. Sectio·n 101-ofthe NlRC, as ~en:ded, is herebr-.
further amended to read as follows: · "SEC. 106. Value-added ·Tax on Sale oi Go~ds
or Properties. -
"SEC. 101. Exemption of Certain Gifts. - The
following gifts or donations shall be exempt from the "(A) Rate and Base of Tax. - There shall be
tax provided for in this Chapter: levied, assessed and collected on every sale, barter or
exchange of goods or properties, a value-added tax
"(A) In the Case of Gifts Made by a Resident. - equivalent t.o twelve percent (12%} ofthe gross selling
price or gross value in money ofthe goods or properties
"(1) Gifts made to orfor the use ofthe National sold, bartered or exchanged, such tax to be paid by
Gove:rnment or any entity .created by any of its the seller or transferor.
agencies which is not conducted for profit, or~ any.
political subdivision of the said Government; and "(1) XX X
"(2) Gifts in favor of an educational and/or "(2) The following sales by VAT-registered
charitable, religious, cultuxal or social welfare persons shall be subject to zero percent (0%) rate:
corporation, institution, accredited nongovernment
organization, trust or philanthropic organization or
"(a) Export Sales. -The term 'export sales'
research institution or organization: Provided,
however, That not more than thirty percent (30%) of IJ1eans:
said gifts shall be used by such donee for
administration purposes. For the purpose of this "(1) The sale and actual shipment of goods from
exemption, a 'non-profit educational and/or charitable the Philippines to a foreign country, irrespective of
corporation, institution, accredited nongovernment any shipping arrangement that may be agreed upon
organization, trust or philanthropic organization which may influence or determine the transfer of
and/or research institution or organization' ownership of the goods so exported and paid for in
1s a school, college or university and/or acceptable foreign currency or its equivalent in goods
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or services, and acconnt.ed for in accordance with the "Provided, Thatsubparagraphs (3), (4), and(5)
rules and regulations of the Bangko Sentral ng hereof shall be subject to the twelve percent (12%)
Pilipinas (BSP); value-added tax and no longer be considered export
sales subject to zero percent (0%) VAT rate upon
"(2) Sale and delivery of goods to: satisfaction of the following conditions:
"(i) Registered enterprises within a separate "(1) The successful establishment and
customs territory as provided under speciallaws; and ·i mplementation of an enhanced VAT refund system
that grants refunds of creditable input tax within
"(ii) Registered enterprises within tourism ninety (90) days from the filing of the VAT refund
enterprise zones as declared by the Tourism application with the Bureau: Provided, That, to
Infrastructure and Enterprise Zone Authority (T]EZA) determine the effectivity ofitem no. l, all applications
subjectto the provisions under Republic Act No. 9593 filed from January 1, 2018 shall be processed and
or The Tourism Act of 2o_o9. . m~ be decided within ninety (90) days from the filing
ofthe·VA~refundapplication; and - .
"(3) Sale of raw materials or packaging
materials to a nonresident buyer for delivery to a "(2) All pending VAT refund claims as of
resident local export-oriented enterprise t.o be used in December 31, 2017 shall be fully paid in cash by
manufacturing, processing, packing or repacking in December 31, 2019.
the Philippines of the said buyer's goods and paid for
in acceptable foreign currency and accounted for in "Provided, Th.at the Department of Finance
accordance with the rules and regulations of the shall establish a VAT refund center in the Bureau of
Bangko Sentral ng Pilipinas (BSP); Internal Revenue (Bffi) and in the Bureau of Customs
(BOC) that will handle the processing and granting
. "(4) Sale of raw materials or packaging of cash refunds of credit.able input tax.
materials t.o export-oriented enterprise whose export
sales exceed seventy percent (70%) of total annual "An ~ount equivalent-to five percent (5%) of
production; the total VAT collection of the BIB. and the BOC from
the immediately preceding year shall be automatically
"(5) Those considered export sales under appropriated annually and shall be treated as a
Executive Order No. 226, otherwise known as the special account in the General Fund or as trust
Omnibus Investment Code of 1987, and other special receipts for the purpose of funding claims for VAT
laws; and refund: Provided, That any unused fund, at the end
of the year shall revert t.o the·General Fund.
"(6) The sale of goods, supplies, equipment and
fuel to persons engaged in international shipping or "Provided, further, That the BIR and the BOC
international air transport operations: Provided, shall be required to submit to the Congressional
That the goods, supplies, equipment and fuel shall be Oversight Committee on the Comprehensive Tax
used for international shipping or air transport Reform Program (COCCTRP) a quarterly report of
operations. all pending claims for refund and any unused fund.
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'"(b) Sales to persons orentmes whose exemption "The phrase 'sale or exchange of
under special laws or international agreements to services' means the performance of all kinds of
which the Philippines is a signatory effectively services in the Philippines for others for a fee,
subjects such sales to zero rate. remuneration or consideration, including those
performed or rendered by construction and service
"xxx." contractors; stock, real estate, commercial, customs
and immigration brokers; lessors ofproperty, whether
SEC. 32. Section 107 of the NIRC, as amended, is hereby personal or real; warehousing services; lessors or
further amended to read as follows: distributors of cinematographic films; persons
engaged in milling, processing, manufacturing or
"SEC. 107. Value-added Tax on Importation repacking goods for others; proprietors, operators or
a/Goods. - keepers of hot.els, motels, resthouses, pension houses,
inns, resorts; proprietors or operators of restaurants,
refreshment parlors, cafes and other eating places,
· "(A) ..In Generat -.- · ·There shall.be l~vied,. ~~ucijng clubs and caf.E?rers; dealers in securities; ·
assessed and collected on every importation of goods
lending investors; transport.a.ti.on contractors on their
a value-added tax equivalent to twelve percent {12%)
transport of goods or cargoes, including persons who
based on the t.ot.al value used by the Bureau ofOust.oms
transport goods or cargoes for hire and other domestic
in determining tariff and customs duties, plus
common carriers by land relative to their transport
customs duties, excise taxes, if any, and other
of goods or cargoes; common carriers by air and sea
charges, such tax to be paid by the importer prior to
relative to their transport of passengers, goods or
the release of such goods from customs custody:
cargoes from one place in the Philippines to another
Provided, That where the customs duties are place in the Philippines; sales of electricity by
determmed on the basis of the quantity or volume of generation companies, transmission by any entity,
the goods, the value-added tax shall be based on the
and distribution companies, including electric
landed cost_plus excise taxes, if any. ·
cooperatives; services offranchise grant.ees of electric .
utilities; t.elephone and t.elegraph, radio and television
"(B) Transfer of Goods by Tax-exempt broadcasting and all other franchise grantees except
Persons. - x x x." those under Section 119 of this Code and non-life
insurance companies (except their crop insurances),
SEC. 33. Section 108 of the NIRC, as amended, is hereby including surety, fidelity, indemnity and bonding
further amended to read as follows: companies; and similar services regardless of whether
or not the performance thereof calls for the exercise ·
"SEC. 108. Value-added Tax on Sale of or use of the physical or mental faculties. The
Services and Use or Lease of Properties. - phrase 'sale or exchange of services' shall likewise
include:
"(A) Rate and Base of Tax. - There shall be
levied, assessed and collected, a value-added tax "(1) The lease or the use of or the right or
equivalent to twelve percent (12%) of gross receipts privilege to use any copyright, pat.ent, design or
derived from the sale or exchange of services, model, plan, secret formula or process, goodwill,
including the use or lease of properties. trademark, trade brand or other like property or right;
36 S7
"(2) The lease or the use of, or the right to use rental or royalty, including the amount charged for
ofanyindustriaJ.. commercial or scientific equipment; materials supplied with the services and deposits and
advanced payments actually or constructive]yreceived
"(3) The supply of scientific, technical, during the taxable quarter for the services performed
industrial or commercial knowledge or information; · or to be performed for another person, excluding
value-added tax.
"(4) The supply of any assistance that is
ancillary and subsidiary to and is furnished as a "(B) Trarisactions Subject to.Zero Percent (0%)
means of enabling the application or enjoyment of Rate. - The following services performed in the
any such property, or right as is mentioned in Philippines by VAT-registered persons sba11. be subject
subparagraph (2) or any such knowledge or to zero percent (0%) rate:
information as is mentioned in subparagraph (3);
"(1) Processing, manufacturing or repacking
:. : •:"(5) The ·s~ply of services b; a noni'esideni -- goo5is for other persons doing business outside the ·-
person or his employee in connection with the use of : Philippines which goods are subsequently exported,
property or rights belonging to, or the installation or where the services are paid for in acceptable foreign
operation of any brand, machinery or other apparatus currency and accounted for in accordance with the
purchased from such nomesident person; rules and regulations of the Bangko Sentral ng
Pilipinas (BSP);
"(6) The supply of technical advice, assistance
or services rendered in connection with technical "(2) Services other than those mentioned in the
management or administration of any scientific preceding paragraph, rendered to a person engaged
industrial or commercial undertaking venture' in business conducted outside the Philippines or to a
project or scheme; ' ' nonresident person not engaged in business who is
outside the Philippines when the services are_
1.
"(J) The lease of motion picture films, -films, I performed; the consideration for which is paid for in
tapes and discs; and I
i
acceptable foreign currency and accounted for in
accordance with the rules and regulations of the
i
I
Bangko Sentral ng Pilipinas (BSP);
"(8) The lease or the use of or the right to use !
radio, television, satellite transmission and cable
television time_ "(3) Services rendered to persons or entities
whose exemption under special laws or international
agreements to which the Philippines is a signatory
"Lease ofproperties shall be subject to the tax
effectively subjects the supply of such services to zero
herein imposed irrespective of the place where the
percent (0%) rate;
contract oflease or licensing agreement was executed
if the property is leased or used in the Philippines.
"(4) Services rendered to persons engaged in
international shipping or international air transport
"The term 'gross receipts' means the total
operations, including leases ofproperty for use thereof
amount of money or its equivalent representing
Provi,ded, That these services shall be exclusive for
the contract price, compensation, service fee,
international shipping or air transport operations;
38 39
"(5) Services performed by subcontractors must be decided within ninety (90) days from the filing
and/or contractors in processing, converting, or of the VAT refund application; and
manufacturing goods for an enterprise whose export
sales exceed seventy percent (70%) of total annual "(2) All pending VAT refund claims as of
production;
December 31, 2017 shall be fully paid in cash by
December 31, 2019.
"(6) Transport of passengers and cargo by
domestic air or sea vessels from the Philippines to a "Provided, That the Department of Finance
foreign country; and
shall establish a VAT refund center in the Bureau of
Internal Revenue (BIR) and in the Bureau of Customs
"(7) Sale of power or fuel generated through (BOC) that will handle the processing and granting
renewable sources of energy such as, but not limited of cash refunds of creditable input tax.
to, biomass, solar, wind, hydropower, geothermal,
_ocean energy, and other emerging energy sources ;:- -
- _ - "An amount"equivalent to five perc~nt (5%) of - ·
7:'
using technologies such ~ ·fuel cells and hydrogen the total value-added tax collection of the Bm and
fuels.
the BOC from the immediately preceding year shall
be automatically ~ppropriated annually and shall be
"(8) Services rendered to: treated as a special account in the General Fund or
as trust receipts for the purpose offunding claims for
"(i) Registered enterprises within a separate VAT Refund: Provided, That any unused fund, at
customs territory as provided under special law; and the end of the year shall revert to the General Fund.
''(ri.) Registered enterprises within tourism "Provided, further, That the BIR and the BOC
enterprise zones as declared by the TIEZA subject to shall be required to submit to the COCCTRP a
· the provisions under Republic Act No. 9593 or quarterly report of all pending claims for refund and
The·Tourism Act of 2009. · any unused fund." .
"Provided, That subparagraphs (B)(l) and SEC. 34. Section 109 of the NIRC, as amended, is hereby
(B)(5) hereof shall be subject to the twelve percent further amended to read as follows:
(12%) value-added tax and no longer be subject to
zero percent (0%) VAT rate upon satisfaction of the "SEC.109. Exempt Transactions.
following conditions: (1) Subject to the provisions of Subsection{2) hereof,
the following transactions shall be exempt from the
"{l) The successful establishment and value-added tax:
implementation of an enhanced VAT refund system
that grants refunds of creditable input tax within "(A) XXX
ninety (90) days from the filing of the VAT refund
application with the Bureau: Provided, That, to "(B) XXX
determine the e:ffectivity ofitem no. l, all applications
filed from January 1, 2018 shall be processed and
"(C) X XX
f -
40 41
"(P) Sale of real properties not primarily held "(U) Importation offuel. goods and supplies by
for sale to customers or held for lease in the ordinary persons engaged in international shipping or air
course of trade or business or real property utilized transport operations: Provided, That the fuel, goods,
for low-cost and socialized housing as defined by ~~ and supplies shall be used for international shipping
RepublicActNo. 7279, otherwiseknownasthe Urban ~- or air transport operations; ·
Development and Housing Act of 1992, and other
related laws, residential lot valued at One million
I "M Services of bank, non-bank financial
five hundred thousand pesos (Pl,500,000) and below, intermediaries performing quasi-banking functions,
house and lot, and other residential dwellings valued I and other non-bank :financial intermediaries;
at Two million five hundred thousand pesos
(P2,500,000) and below: Provided, That beginnning "(W) Sale or lease of goods and services to senior
January l, 2021, the VAT exemption shall only apply I citizens and persons with disability, as provided under
to sale ofreal properties not primarily held for sale to
. customers or held for lease in_the ordinary-course of ..
I Republic Act Nos. 9994 (Expanded Senior Citizens
·.-:· l Actof20.lO)and_10754(An~ExpandingtbeBenefit.s
trade or business, sale of real property utilized for
socialized housing as defined by Republic Act
No. 7279, sale of house and lot, and other residential
l and Privileges of Persons With D1.sability);
respectively;
dwellings with selling price of not more than
"(X) Transfer of property pursuant to
Two million pesos (P2,000,000): Provided,
Section 40(C)(2) of the NIRC, as amended;
further, That every three (3) years thereafter, the
amount herein stated shall be adjusted to its present
value using the Consumer Price Index, as published "(Y) Association dues, membership fees, and
by the Philippine Statistics Authority (PSA); other assessments and charges collected by
homeowners associations and condominium
corporations;
"(Q) Lease of a residential unit with a monthly
rental not exceeding Fifteen thousand pesos (P15,000);
"(Z)-Sale of gold to the Bangko Sentral ng
Pilipinas (BSP);
"(R) Sale, importation, printing or publication
of books and any newspaper, magazine, review or
bulletin which appears at regular intervals with:fixed "(AA) Sale of drugs and medicines prescribed
prices or subscription and sale and which is not for diabetes, high cholesterol, and hypertension
devoted principally to the publication of paid beginningJanuaryl,2019;and
advertisements;
"(BB) Sale or lease of goods or properties or the
"(S) Transport of passengers by international performance of services other than the transactions
carriers; mentioned in the preceding paragraphs, the gross
annual sales and/or receipt.a do not exceed the amount
ofThree million pesos (P3,000,000).
"(T) Sale, importation or lease ofpassenger or
cargo vessels and aircraft, including engine,
equipment and spare parts thereof for domestic or
international transport operations;
44
45
SEC. 35. Section 110 of the NIRC, as amended, is hereby SEC. 36. Section 112 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:
:I
"SEC. 110. Tax Credits. - ·ct; ~ "SEC. 112. Refunds or Tax Credits of Input
~- J
Tax. -
"(A) Creditable Input Tax. - I
"(1) XXX
I "(A) XXX
I "(B) XXX
"(2) XXX
file a quarterly return ofthe amount ofhis gross sales SEC. 38. Section 116 of the NIRC, as amended, is hereby
or receipts within twenty-five (25) days following the further amended t.o read as follows:
close of each taxable quarter prescribed for each
taxpayer: Provukd, however, That VAT-registered
~J
~: l "SEC. 116. · Tax on Persons Exempt from
persons shall pay the value-added tax on a monthly Value-added Tax (V.41'. - Any person whose sales
basis: Provided, finally, That beginning January 1, i or receipts are exempt under Section 109 (BB) of this
2023, the filing and payment required under this Code from the payment ofvalue-added tax and who is
Subsection shall be done within twenty-five (25) days not a VAT-registered person shall pay a tax equivalent
following the close of each taxable quarter. to three percent (3%) of his gross quarterly sales or
receipts: Proui.ded, That cooperatives, and beginning
"xxx January 1, 2019, self-employed and professionals with
total annual gross sales and/or gross receipts not
"(B\'J exceeding Five hundred thousand pesos (P500,000)
XXX
.shall be exempt from the three percent (3%) gross
· :receiptstaxherein.jmposed."·· · · -
"(C) Withholdir:cofValue-added Tax. - The
Government or any of its political subdivisions,
instrumentalities or agencies, including SEC. 39. Section 127 of the NIRC, as amended, is hereby
government-owned or -controlled corporations further amended to read as follows:
(GOCCs) shall. before making payment on account of
each purchase of goods and services which are subject "SEC. 127. Tax on Sale, Barter or Exchange
to the value-added tax imposed in Sections 106 and of Shares of Stock Listed and Traded through the
108 ofthis Code, deduct and withhold the value-added Local Stock Exchange or through Initial Public
tax imposed in Sections 106 and 108 of this Code, Offering. -
deduct and withhold a final value-added tax at the
rate offive percent (5%) of the gross payment thereof: "(A) Tax_ on Sale, Barter or ~xcft,ange of
Provuled, ..That beginning January 1, 2021, the VAT ·Shares of Stock Listed and Traded through ~he Local
witholding system under this Subsection shall shift Stock Exchange. - There shall be levied, assessed
from final to a creditable system: Provided, further, and collected on every sale, barter, exchange or other
That the payment for lease or use of properties or disposition ofshares ofstocklisted and traded through
property rights to nonresident owners shall be subject the local stock exchange other than the sale by a
to twelve percent (12%) withholding tax at the ti.me dealer in securities, a tax at the rate of six-tenths of
of payment: Provided, finally, That payments for one percent (6/10 of 1%) of the gross selling price or
purchases of goods and services arising from projects gross value in money of the shares of stock sold,
funded by Official Development Assistance (ODA) as bartered, exchanged or otherwise disposed which shall
defined under Republic Act No. 8182, otherwise be paid by the seller or transferor.
known as the 'Official Development Assistance Act of ·
1996', as amended, shall not be subject to the final · "xxx."
withholding tax system as imposed in this Subsection.
For purposes of this Section, the payor or person in
control of the payment shall be considered as the
withholding agent
r
48 49
SEC. 40. Section 128 of the NIRC, as amended, is hereby SEC. 42. Section 145 of the NIRC, as amended, is hereby
further am.ended t.o read as follows: further amended to read as follows:
"SEC. 145. Cigars and Cigarettes. -
"SEC.128. Returns and Payment of
Percentage Taxes. "(A) Cigars. - xxx
"(B) Cigarettes Packed by Hand. - There
"{A) XXX
shall be levied, assessed and collected on cigarettes
packed by hand an excise tax based on the following
"(1) XX X
schedules:
"(2) Persons Retiring from Business. - xx x "Effective on January 1, 2018 until
June 30," 2018, Thirty-two pesos and fifty centavos
"(3) Determinq,tion of _Correct Sales· ~r · · (P32.50)p_erpack; .
· Eeceipts. ~ x_ i x
"Effective on July 1, 2018 until
"xxx." December 31, 2019, Tlrirty-:6.ve pesos (P35.00) per
pack;
SEC. 41. Section 129, Chapter 1 of Title VI of the NIRC,
as amended, is hereby further amended t.o read as follows: "Effective on January 1, 2020 until
December 31, 2021, Thirty-seven pesos and fifty
"TITLE VI-EXCISE TAXES ON CERTAIN centavos (P37.50) per pack; and
GOODS AND SERVICES
"Effective on January 1, 2022 until
"CHAPTER 1-GENERALPROVISIONS December 31, 2023, Forty pesos (P40.00) per pack. ·
-
"SEC. 129. Goods and Services Subject to
Excise Taxes. - Excise taxes apply to goods "The rates of tax imposed under this subsection
manufactured or produced in the Philippines for shall be increased by four percent (4%) every year
domestic sales or consumption or for any other effective on January 1, 2024, through revenue
disposition and to things imported as well as services regulations issued by the Secretary of Finance.
performed in the Philippines. The excise tax imposed
herein shall be in addition to the value-added tax ''Duly registered cigarettes packed by hand
imposed under Title IV. shall only be packed in twenties and other packaging
combinations of not more than twenty.
"For purposes of this Title, excise taxes herein
imposed and based on weight or volume capacity or . "'Cigarettes packed by hand' shall refer t.o the
any other physical unit of measurement shall be manner of packaging of cigarette sticks using an
referred to as 'specific tax' and an excise tax herein individual person's hands and not through any other
imposed and based on selling price or other specified means such as a mechanical device, machine or
value ofthe good or service performed shallbe referred equipment.
to as 'ad valorem tax.' "
50 61
52 53
pyrolysis gasoline, when used as a raw mat.erial in per liter of volume capacity, Two pesos and fifty
the ~roduction of petrochemical products, or in the centavos (P2.50);
refining ofpetroleum product.a, or as replacement fuel -
for natural-gas-fired-combined cycle power plant in l "G) Liquefied petroleum gas, per kilogram.,
lieu of locally-extracted natural gas during the One peso (Pl.00): Provided, That liquefied petroleum
non-availability thereof, subject to the rules and gas when used as raw material in the production of
regulations to be promulgated by the Secretary of petrochemical products, subject to the rules and
Finance, per liter of volume capacity, zero (P0.00): regulations to be promulgat.ed by the Secretary of
Provided, further, That the production of petroleum. Finance, shall be taxed zero (PO.OD) per kilogram:
products, whether or not they are classified as
products of distillation and for use solely for the "Provided, finally, That liquefied petroleum gas
production of gasoline shall be exempt from excise used for motive power shall be taxed at the equivalent
tax: Provided, finally, That the by-product including rate as the excise tax on diesel fuel oil;
· fue~ oil, diesel fuel, !terosene, pyroly~ gasoline, · . .
"liquefi.e~ petroleum g~s, and-similar ~ having "(k) Asphalts, per kilogram, Eight pesos (PS.00);
more or less the same generating power, which are
produced in the processing of naphtha into "(l) Bunker fuel oil, and on similar fuel oils
petrochemical products shall be subject to the having more or less the same generating power, per
applicable excise tax specified in this Section, except lit.er of volume capacity, Two pesos and fifty centavos
when such by-products are transferred to any of the (P2.50): Provided, however, That the excise taxes
local oil refineries through sale, barter or exchange, paid on the purchased basestock (bunker) used in the
for the purpose offurther processing or blending into manufacture of excisable articles and forming part
:finishedproducts which are subject to excise tax under thereof shall be credited against the excise tax due
this Section;
therefrom; and
. .
·"(±) Unleaded premium gasoline, per liter of "(m) Petroleum coke, per metric ton, Two pesos
volume capacity, Seven pesos (P7.00); and fifty centavos ·(P2.50): Provided, however, That,
petroleum coke, when used as feedstock to any power
. "(g) Aviation turbo jet fuel, aviation gas, per generating facility, per metric ton, zero (P0.00).
liter of volume capacity, Four pesos (P4.00);
"EffectiveJanuaryl,2019
"(h) Kerosene, per liter of volume capacity,
Three pesos (P3.00): Provided, That kerosene, when "(a) Lubricating oils and greases, including but
used as aviation fuel, shall be subject to the same tax not limited to, basestock. for lube oils and greases,
on aviation turbo jet fuel under the preceding high vacuum distillates, aromatic extracts and. other
paragraph (g), such tax to be assessed on the user similar preparations, and additives for lubricating oils
thereof; and greases, whether such additives are petroleum
based or not, per liter and kilogram, respectively, of
"(i) Diesel fuel oil, and on similar fuel oils volume capacity or weight, Nine pesos (P9.00):
having more or less the same generating power, -Provided, That lubricating oils and greases produced
54 55
'
r from basestocks and additives on which the excise
tax has already been paid shall no longer be subject
t.o excise t.ax: Provided, further, Thatlocally produced
or imported oils previously taxed as such but are
subsequently reprocessed, rerefined or recycled shall
production of gasol:iµe shall be exempt from excise
tax: Provided, finally, That the by-product including
fuel oil, diesel ·fueL kerosene, pyrolysis gasoline,
liquefied petroleum gases and similar oils having
more or less the same generating power, which are
likewise be subject to the tax imposed under this produced in the processing of naphtha into
Subsection. petrochemical products shall be subject t.o the
applicable excise tax specified in this Section, except
"(b) Processed gas, per liter of volume capacity, when such by-products are transferred t.o any of the
Nine pesos (P9.00); local oil refineries through sale, barter or exchange,
for the purpose offurther processing or blendingint.o
"(c) Waxes and petrolatum, per kilogram, finished products which.are subject t.o excise tax under
this Section;
Nine pesos (P9.00); J
"(d) . On denatured alcohol t.o be used.formotive "(-f) · Unl~aded premi~ gasoline, per lit?r of
volume capacity, Nine pesos (P9.00);
power, per liter ofvolume capacity, Nine pesos (P9.00):
Provided, That unless otherwise provided by special
laws, if the denatured alcohol is mixed with gasoline, "(g) Aviation turbo jet fuel, aviation gas, per
the excise tax on which has already ·b een paid, only liter of volume capacity, Four pesos (P4.00);
the alcohol content shall be subject t.o the tax herein
prescribed. For purposes of this Subsection., the "(h) Kerosene, per liter of volume capacity,
removal of denatured alcohol of not less than one Four pesos (P4.00): Provided, That kerosene, when
hundred eighty degrees (180°) proof (ninety percent used as aviation fuel, shall be subject to the same tax
(90%} absolute alcohol) shall be deemed t.o have been on ·aviation turbo jet fuel under the preceding
removed for motive power, unless shown otherwise;
: .·
paragraph (g), such tax t.o be assessed on the user
thereof;
"(e) Naphtha, regular gasoline, pyrolysis
gasoline, and other similar products of distillation., "(i) Diesel fuel oil, and on similar fuel oils -
per liter of volume capacity, Nine pesos (P9.00): having more or less the same generating power, per
Provided, however, That naphtha and pyrolysis liter ofvolume capacity, Four pesos and fifty centavos
gasoline, when used as a raw material in the ) (P4.50);
production of petrochemical products, or in the
refining of petroleum products, or as replacement fuel ) "6) Liquefied petroleum gas, per kilogram,
for natural-gas-fired-combined cycle power plant in Two pesos (P2.00): Promded, That liquefied petroleum
lieu of locally-extracted natural gas during the gas when used as raw material in the production of
non-availability thereof, subject to the rules and petrochemical products, subject to the rules and
regulations t.o be promulgated by the Secretary of regulations to be promulgated by the Secretary
Finance, per liter of volume capacity, zero (P0.00): of Finance, per kilogram, zero (P0.00): Provided, ·
Provided, further, That the production of petroleum finally, That liquefied petroleum gas used for motive
products, whether or not they are classified as power shall be taxed at the equivalent rate as the
products of distillation and for use solely for the excise tax on diesel fuel oil;
·ss 57
"(k) Asphalts, per kilogram, Nme pesos (P9.00); "(d) On denatured alcohol to be used for motive
power, per liter of volume capacity, Ten pesos
"(l) Bunk.er fuel oil, and on similar fuel oils (Pl0.00): Provided, That unless otherwise provided
having more or less the same generating power-, per by special.laws, ifthe denatured alcohol is mixed with
liter of volume capacity, Four pesos and fifty centavos gasoline, the excise tax on which has already been
(P4.50): Provided, 1wwever, That the excise taxes paid, only the alcohol content shall be subject to the
paid on the purchased basest.ock (bunker) used in the tax herein prescribed. For purposes of this
manufacture of excisable articles and forming part Subsection, the removal of denatured alcohol of not
thereof shall be credited against the excise tax due less than one hundred eighty degrees (180°) proof
therefrom; and (ninety percent (90%) absolute alcohol) shall be
deemed to have beenremoved for motive power, unless
"(m) Petroleum coke, per metric ton, Four pesos shown otherwise;
and fifty centavos (P4.50): Provided, 1wwever, That,
petroleum. co~e, when used-as f~edstoG]t to any power . - "(~) Naphtha, ·reg:ular . gasoline, pyrolysis
generatin:gfa~ty, per-metric ton, Z!;!ro (P0.00). · gaseiline 'and:.other similar prqducts of distillati9n,
per liter of volume capacity, Ten pesos (Pl0.00): .
"E:ffectiveJanuaryl,2020 Provided, 1wwever, That naphtha and pyrolysis
gasoline, when used as a raw material in the
production of petrochemical products, or in the
"(a) Lubricating oils and greases, including but refining of petroleum products or as replacement fuel
not limited to, basestock for lube oils and greases, for natural-gas-fired-combined cycle power plant in
high vacuum distillates, aromatic extracts and other
lieu of locally-extracted natural gas during the
similar preparations, and additives for lubricating
non-availability thereof, subject to the rules and
oils and greases, whether such additives are petroleum
regulations to be promulgated by the Secretary of
based or not, per liter and kilogram, respectively, of
Finance, per liter of volume capacity, zero (P0.00):
volume capacity or weight, Ten pesos (Pl0.00):.
Provided, further, That.the production of petroleum
Provided, That lubricating oils and greases produced
products, whether or not they ·are classified as -
from basestocks and additives on which the excise
products of distillation and for use solely for the
tax has already been paid shall no longer be subject
production of gasoline shall be exempt from excise
to excise t.ax: Provided, further, That locally produced
tax: Provided, finally, That the by-product including
or imported oils previously taxed as such but are
fuel oil, diesel fuel, kerosene, pyrolysis gasoline,
subsequently reprocessed, rere:fined or recycled shall
liquefied petroleum gases and similar oils having
likewise be subject to the tax imposed under this
more or less the same generating power, which are
Subsection.
produced in the processing of naphtha into
petrochemical products shall be subject to the
"(b) Processed gas, per liter of volume capacity, applicable excise tax specified in this Section, except
Ten pesos (Pl0.00); when such by-products are transferred to any of the
local oil refineries through sale, barter or exchange,
"(c) Waxes and petrolatum, per kilogram, Ten for the purpose offurther processing or blending into
pesos (Pl0.00); finished products which are subject to excise t.ax under
this Section;
f 58
-'
59
"(f) Unleaded premium gasoline, per liter of "Petroleum products, including naphtha, LPG,
volume capacity, Ten pesos (Pl0.00); · petroleum coke, refinery fuel and other pr~ducts of
distillation, when used as input, feedstock or as raw
"(g) Aviation turbo jet fuel, aviation gas, per · material in the manufacturing of petrochemical
liter of volume capacity, Four pesos (P4.00); products, or in the refining ofpetroleum products, or
as replacement fuel for natural-gas-fired-combined
"(h) Kerosene, per liter of volume capacity, cycle power plant in lieu oflocally-extracted natural
·Five pesos (P5.00): Promded, That kerosene, when gas during the non-availability thereof, subject t.o the
used as aviation fuel, shall be subject to the same tax rules and regulations to be promulgated by the
on aviation turbo jet fuel under the preceding Secretary of Finance, per liter of volume capacity,
paragraph (g), such tax to be assessed on the user z.ero (P0.00): Provided, That the by-productincluding
thereof; fuel oil, diesel fuel, kerosene, pyrolysis gasoline,
liquefied petroleum gases, and gjmi)ar oils having
more or less the same generating power, which are
. - "~) :piesel fuel oiL arid: on ~ ~el 9ils ·
pro·duced in. the processing of naphtha into .
having more or1ess the same generating power, per
petrochemical products shall be subject ·to the
liter of volume capacity, Six pesos (P6.00);
applicable excise tax specified in this Section, except
when such by-products are transferred to any ofthe
"6) Liquefied petroleum gas, per kilogram, local oil refineries through sale, barter or exchange,
Three pesos (P3.00): Provided, That liquefied for the purpose offurther processing or blending int.a
petroleum gas when used as raw material in the :finishedproducts which are subject to excise tax under .
production of petrochemical products, subject to the this Section.
rules and regulations to be promulgated by the
Secretary of Finance, per kilogram, zero (P0.00):
"For the period covering 2018 t.o 2020, the
Provided, finally, That liquefied petroleum gas used
scheduled increase in the excise tax on fuel as imposed
for motive power shall be taxed at the equivalent rate
in this Section shall be s~ended when the average
as the excise tax on diesel fuel oil;
·Dubai crude oil price based on _Mean of Platts
Singapore (MOPS) for three (3) months prior to the
"(k) Asphalts, per kilogram, Ten pesos scheduled increase of the month reaches or exceeds
(Pl0.00); Eighty dollars (USD 80) per barrel.
"(I) Bunker fuel oil, and on similar fuel oils "Provided, That the Department of Finance
having more or less the same generating power, per shall perform an annual review ofthe implementation
liter of volume capacity, Six pesos (P6.00): Proui.ded, ofthe excise tax on fuel and shall, based on projections
lwwever, That the excise taxes paid on the purchased provided and recommendations of the Development
basestock: (bunker) used in the manufacture of Budget Coordination Committee, as reconciled from
excisable articles and forming part thereof shall be the conditions as provided above, recommend the
credited against the excise tax due therefrom; and implementation or suspension of the excise tax on
fuel: Provided, further, That the recommendation
"(m) Petroleum coke, per metric ton, Six pesos shall be given on a yearly basis: Provided, finally,
(P6.00): Provided, however, That, petroleum coke, That any suspension of the increase in excise tax shall
when used as feedstock: to any power generating not result in any reduction of the excise tax being
facility, per metric ton, zero (P0.00). . imposed at the time of the suspension."
60 61
SEC. 44. A new section designated as Section 148-A "(d) Absence of Official or Dilution of the
under Chapter V of the NIRC, as amended, is hereby inserted Official Marker; Presumptions. - In the event that
to read as follows: the petroleum products which do not contain the
official marker or which contain the official marker
"SEC. 148-A. Mandatory Marking of All but are diluted beyond the acceptable percentage
Petrokum Products. - In accordance with rules approved by the Secretary of Finance are found in
and regulations to be issued by the Secretary of the domestic market or in the possession of anyone,
Finance, in consultation with the Com.missioner of or under any situation where said petroleum products
Internal Revenue and Commissioner of Cust.oms and are subject to duties and t.axes, it shall be presumed
in coordination with the Secretary of Energy, the that the same were withdrawn with the intention to
Secretary of Finance shall require the use of an evade the payment ofthe taxes and duties due thereon;
official fuel marking or similar technology on
petroleum products that are refined, manufactured, "(e) The use of fraudulent marker on the
or impo~d int.c> the Philippines, ~ that are subj~ petroleum pro~ucts shall be co~dei'ed prim.a fac~
to. the-payment of t.axes--a nd duties, such as but not evidence that the same have been withdrawn or
limit.ed to, unleaded premium gasoline, kerosene, and imported without the payment of taxes and duties
diesel fuel oil after the t.axes and duties thereon have due thereon;
been paid. The mandat.ory marking of all petroleum.
products shall be in accordance with the following: "(f) Engagement of Fuel Marking Provider.
-The government shall engage only one fuel marking
"(a) Official Markers. - There shall be a list provider who shall, under the supervision and
ofchemical additives and corresponding quantitative direction of the Commissioners ofInternal Revenue
ratio as identified by the Secretary of Finance as and Customs, be responsible for providing,
official fuel markers. The official fuel markers shall monitoring, and administering the fuel markers,
be .distinct and, to the greatest degree possible, provide equipment ~d devices, cond~ct field and
·impossible to imitate or replicate: Provided, That · · confirmatory tests, and perform such.o~er acts ·
the official fuel marker must be unique to the incidental or necessary to the proper im.plement.ation
Philippines and that its chemical composition and of the provisions of this Act: Provided, That the fuel
quantitative ratio must persist for at least three (3) marking provider shall provide an end-to-end solution
years from their application or administration to the to the Government, including the establishment and
unmarked fuel; operation of testing facilities that are certified to
ISO 17025;
"(b) The person, entity, or taxpayer who owns
or enters the petroleum. products into the country, or "(g) All costs pertaining to the procurement of
the person to whom the petroleum products are the official fuel markers shall be borne by the refiner,
consigned shall cause and accommodate the marking manufacturer or importer, of petroleum products,
of the petroleum products with the official mar.king as the case may be: Provided, That the government
agent; may subsidize the cost ofofficial fuel markers in the
first year ofimplementation;
"(c) Internal revenue or customs officers shall
be on site to administer the declaration of the tax
and duties imposed on the petroleum products and to
,.._.~,.l'ln n •l.. ... ..., __ ,,: __ .L.; _ _ - l! .&.1- - L - - 1 _ _ _ _ 1...! . . - ·
62 63
"G) The te~ 'random field te~' shall refer to "Over Four million pesos (P4,000,000) Fit'typercent(50%)
periodic random inspections and tests performed to
establish qualitative and quantitative positive result
"Provided, That hybrid vehicles shall be
offuel trafficking, which are conducted on fuels found
subject t.o fifty percent (50%) of the applicable excise
in warehouses, storage tanks, gas stations and other
tax rates on automobiles under this Section:
retail outlets, and in such other properties or
Provided, further, That purely electric vehicles and
equipment, including mechanisms of transportation.
pick-ups shall be exempt from excise tax on
of persons engaged in the sale, delivery, trading,
transportation, distribution, or importation of fuel automobiles.
intended for domestic market.
"As used in this Section -
"The term 'confirmatory tests' shall refer t.o the
accurate and precise analytical test of the tested "(a) Automobile shall mean any four (4) or
unmarked, adulterated, or diluted fuel using a device, more wheeled motor vehicle regardless of seating
tool or equipment which will validate and confirm capacity, which is propelled by gasoline, diesel,
the result of the field test, that is immediately electricity or any other motive power: Prouuled, That
conducted in an accredited testing facility that is for purposes of this Act, buses, trucks, cargo vans,
certified to ISO 17025." jeepneys/jeepney substitutes, single cab chassis, and
special-purpose vehicles shall not be considered as
SEC. 45. Section 149, Chapter 6 of Title VI of the NIRC, aut.omobiles.
as amended, is hereby further amended to read as follows:
"(b) Trucldcargo van shall mean a motor
"CHAPTER VI-EXCISE TAX ONMJSCELLANEOUS vehicle of any configuration that is exclusively
ARTICLES designedfor the carriage ofgoods and with any number
of wheels and axles: Provided, That pick-ups shall
"SEC. 149. Automobiles. - There shall be be considered as trucks.
levied, assessed and collected an ad val,orem tax on
64 65
"(c) Jeepney/jeepney substitutes shall mean as SEC. 46. A new section designated a:s Section 150-A under
'Philippine jeep or jeepney' which are of the jitney Chapter VI, Title VI of the NIRC, as amended, is hereby inserted
type locaily designed andmanufactured generally from to read as follows:
surplus parts and components. It shall also include
jeepney substitutes that are manufactured from "SEC. 150-A. Non-essential Services. - There
brand-new single cab chassis or cowl chassis and shall be levied, assessed, and collected a tax equivalent
locally customized rear body that has continuous to five percent (5%) based on the gross receipts derived
sideway row seats with open rear door and without from the performance of services, net of excise tax
retractable glass windows. and value-added tax. on invasive cosmeticprocedures,
surgeries, and body enhancements directed solely
"(d) Bus shall mean a motor vehicle of any towards improving, altering, or enhancing the
configuration with gross vehicle weight of 4.0 tons or patient's appearance and do not meaningfullypromot.e
more with any number of wheels and axles, which is the proper ~ction of the body or prevent or treat
. . generally-accep~d and specially deEµgried for inass or . illness or. disease: I'rovided, That this t,ax shall not
public transportation.. . . · apply to procedures necessary to ·ameliorate .a ·
deformity arising from, or directly related to, a
"(e) Single cab chassis shall mean a motor congenital or developmental defect or abnormality, a
vehicle with complete engine power train and chassis personal injury resulting from an accident or trauma,
equipped with a cab that has a maximum of two (2) or disfiguring disease, tumor, -virus or infection:
doors and only one (1) row of seats. Provided, further, That cases or treatments covered
by the National Health Insurance Program shall not
be subject to this tax."
"(f) Special purpose vehicle shall mean a motor
vehicle designed for specific applications such as
cement mixer, fire truck, boom truck, ambulance SEC. 47. Anew section designated as Section 150-B under
and/or-medical unit, and.off-road vehicles for heavy _Chapter VI, Title VI of the NIRC, as amended, is hereby inserted
· industnes and not for recreational activities: to re{ld as follows: · · ·
"(g) Hybrid electric vehicle shall mean a motor "SEC. 150-B. Sweetened Beverages. -
vehicle powered by electric energy, with or without
provision for off-vehicle charging, in combination with "(A) R.al;eandBase_
o fTax. - Effective January
gasoline, diesel or any other motive power: Prouu:kd, 1,2018:
That, for purposes of this Act, a hybrid electric vehicle
must be able to propel itself from a stationary "(1) A tax of Six pesos (P6.00) per liter of
condition using solely electric motor. volume capacity shall be levied, asse~sed, and
collected on sweetened beverages using purely caloric
"Provided, That in the case ofimported automobiles sweeteners, and purely non-caloric sweeteners, or a
not for sale, the tax imposed herein shall be based on mix of caloric and non-caloric sweeteners: Itovided,
the total landed value, including transaction value, That this tax rate shall not apply to sweetened
customs duty and all other charges. beverages using high fructose corn syrup: Itovided,
further, That sweetened beverages using purely
"Automobiles used exclusively within the coconut sap sugar and purely steviol glycosides shall
freenort zone shall be exempt from.excise tax." be exempt from this tax; and
66 -·. 67
~':
~{
...
"(2) A tax of Twelve pesos (Pl2.00) per liter of . "(2) Caloric sweetener refers to a substance
volume capacity shall be levied, assessed, and that is sweet and includes sucrose, fructose, and
collected on sweetened beverages using purely high glucose that produces a certain sweetness;
fructose corn syrup or in combination with any caloric
or non-caloric sweetener. · "(3) Irigk fruct.ose corn syrup refers to a sweet
saccharide mixture containing fructose and glucose
"(B) Definition, of Terms. - As used in this which is derived from com and added to provide
Act: sweetness to beverages, and which includes other
similar fructose syrup preparations; and
"(1) Sweetened beverages (SBs) refer to
non-alcoholic beverages of any constitution (liquid, "(4) Non-ccdoric sweetener refers to a substance
powder, or concentrates) that are pre-packaged and that are artificially or chemically processed that
sealed in accordan~e with the Food and Drug . produces a certain sweetness. These are substances
Administration (FDA) standards, that contain caloric . which can be directly added to beverages, such as ·
and/or non-caloric sweeteners added by· the· aspartame, . sucr~ose, saccharm, acesulfanie
manufacturers, and shall include, but not be limited potassium, neotame, cyclamates and other
to the following, as described in the Food Category non-nutritive sweeteners approved by the Codex
System from Codex Alimentarius Food Category Alimentarius and adopted by the FDA
Descriptors (Codex Stan 192-1995, Rev. 2017 or the
latest) as adopted by the FD.A; "(C) Exclusions. -Thefollowingproducts, as .
described in the food category system from Codex
"(a) Sweetenedjuice drinks; Alimentarius Food Category Descript.ors (Codex Stan
192-1995, Rev. 2017 or the latest) as adopted by the
"(b) Sweetened tea; FDA, are excluded from the scope of this Act:
"(c) All carbonated beverages; "(1) All milk products, including plain n:rilk, .
infant formula milk, follow-on milk, growing up milk,
"(d) Flavored water; powdered milk, ready-to-drink milk and flavored milk,
fermented milk, soymilk, and flavored soymilk;
"(e) Energy and sports drinks;
"(2) One Hundred Percent (100%) Natural
Fruit Juices - Original liquid resulting from the
"(t) Other powdered drinks not classified as
pressing of fruit, the liquid resulting from the
milk, juice, tea, and coffee;
reconstitution of natural fruit juice concentrate, or
the liquid resulting from the restoration of water to
"(g) Cereal and grain beverages; and dehydrated natural fruit juice that do not have added
sugar or caloric sweetener;
"(h) Other non-alcoholic beverages that cont.sin
added sugar. "(3) One Hundred Percent (100%) Natural
Vegetable Juices - Original liquid resulting from
the pressing of vegetables, the liquid resulting from
(' 69
r-
,. the reconstitution of natural vegetable juice this Section shall be fined treble the amount of
concentrate, or the liquid re!tulting from the deficiency taxes, surcharges, and interest which may
restoration ofwater to dehydrated natural vegetable be assessed pursuant to this Section.
juice that do not have added sugar or caloric
sweetener;
"Any person liable for any of the acts or
omissions prohibited under this Section shall be
"(4) MealReplarementand MedicallyIndicated cr:iroina11y liable and penalized under Section 254 of
Beverages - Any liquid or powder drink/product for the NIRC, as amended. Any person who willfully
oral nutritional therapy for persons who cannot absorb aids or abets in the commission of any such act or
or metabolim dietarynutrient.sfromfood. or beverages, omission shall be criminally liable in the same
or as a source of necessary nutrition used due to a manner as the principal
medical condition and an oral electrolyte solution for
infants and children formulated to prevent
dehydration due to illness; and
"Ifnot a citizen of the Philippines, the offender
shall be deported immediately after serving the
sentence without further proceedings for de~ortation.
-"(5) Ground coffee, instant soluble coff~. and
pre-packaged powdered coffee products.
"(E) Specific Responsibility of the Food
and Drug Administration (FDA). - Starting
"(D) Fi.ling of Return and Payment of Excise June I, 2018, the FDA shall require all
Tax and Penalty. - manufacturers and importers of sweetened beverages
covered by this Act to indicate on the label the type of
"(1) Filing of Return and Payment of Excise sweetener used, and on sweetened beverages in
Tax on Domestic and Imported Sweetened Beverages. powder form to indicat.e on the label the equivalent of
- The provision of Sections 130 and 131 of the NIRC, each serving per liter of volume capacity.
as appropriate, shall apply to sweetened beverages.
· "The FDA shall also conduct post-
"(2) Penalty. - Upon final findings· by the marketing surveillance ofthe sweetened beverages on
Commissioner ofInternal Revenue and/or Customs display in supermarkets, groceries or retail stores
that any manufacturer or importer, in violation of and/or inspection of manufacturing sites to determine
this Section, misdeclares or misrepresents in the compliance with the requirements of this Section.
sworn statement provided in Section 130(c) of the Violations of the provisions of this Act, including but
NIRC, as amended, any pertinent data or information. not limited to, mislabeling or misbranding, shall, to
the penalty of summary cancellation or withdrawal the extent applicable, be punishable under existing
of the permit to engage in business as manufacturer laws.
or import.er ofsweetened beverages as provided under
Section 268 of the NIRC, as amended, shall be "(F) Duty of the Commissioner to Ensure
imposed.
Payment of Taxes. - It shall be the duty of the
Commissioner, among other things, to prescribe a
"Any corporation, association or partnership materially unique, secure and nonremovable
liable for any of the acts or omissions in violation of identification, such as codes, stamps or other
markings, to be firmly and conspicuously affixed on
and form part of the label of all excisable sweetened
beverages.
. ,:.. l
F I
70 71
"For this purpose, the abovementioned control the time of removal, in the case of those locally
measure shall be caused by the Commissioner to be extracted or produced; or the value used by the
printed with adequate security features to ensure the Bureau of Customs in determining tariff and customs
payment of excise tax on.sweetened beverages. duties, net of excise tax and value-added tax in the
case ofimportation.
"(G) Review of Implementation of the
Sweetened Beverage Tax. - At the start of the "xxx:
implementation of the sugar sweetened beverage tax
and every year thereafter, the Department of Health, "(a) Copper and other metallic minerals,
Department of Science and Technology, and four percent (4%); and
Department ofFinance shallreview the impact ofthese
provisions on its health objectives with the view to "(b) Gold and chromite, fourpercent(4%).
making recommendations on the tax rate on these
beverages."
· \<(4) On indigenous petrbleum, a_tax ·of
six percent {6%) ofthe fair international market price
SEC. 48. Section 151 of the NIRC, as amended, is hereby thereof, on the first taxable sale, barter, exchange or
further amended to read as follows: such similar transaction, such tax to be paid by the
buyer or purchaser before removal from the place of
"SEC. 151. Mineral Products. - production. xx x.
f '!
,•)I -
72 73
[
and/or imported by them: Provided, further, That "(a) Random field testing shall be conducted
the Department ofFinance shallmandat.e the creation in the presence of revenue or customs officers, fuel
of a real-time inventory of petroleum articles being marking provider, and the authori7.ed represent.ative
manufactured, imported or found in storage depots of of the owner of the fuel to be tested: Provided, That
such petroleum manufacturers and/or importers: an employee assigned or working at the place where
Provided, finally, That importers of finished the random field test is conducted shall be deemed an
petroleum. products shall also provide themselves with authori7.ed representative of the owner;
Bureau-accredited metering devices to determine as
accurately as possible the volume of petroleum "(b) All field tests shall be properly filmed or
products imported by them. video-taped, and documented; and
"This requirement shall be complied with before "(c) A sample of the randomly tested fuel shall
commencement of operations." be immediately obtained by the revenue or customs _
- offiger upon discoveriJ;tg that the same is unmarked,
.. SEc: 50.. Section 171 of th~ NIRC; as ainend~d, is hereby· . adulterated, or dil.ut.ed.:
further amended to read as follows:
"Provided, further, That confirmatory fuel test
"SEC. 171. Authority of Internal Revenue certificates issued by fuel testing facilities shall be
Officer in Searching for and Testing TambleArticles. valid for any legal purpose from the date of issue,
- Any internal revenue officer may, in the discharge and shall constitute admissible and conclusive
ofhis official duties, enter any house, building or place evidence before any court."
where articles subject to tax und~r this Title are
produced or kept, or are believed by him upon SEC. 51. Section 174 of the NIRC, as amended, is hereby
reasonable grounds to be produced or kept, so far as further amended to read as follows:
may be necessary to examine, test, discover or seize ·
the same. ·
"SEC. 174. Stamp Tax on Origi-rial Issue of
Shares of Stock. - On every original issue, whether
"He may also stop and search any vehicle or on organization, reorganization or for anylawful
other means of transportation when upon reasonable purpose, of shares of stock by any association,
grounds he believes that the same carries any article company, or corporatio~ there shall be collected a
on which the excise tax has not been paid. documentary st.amp tax ofTwo pesos (P2.00) on each
Two hundred pesos (P200), or fractional part thereof.
"Subject to rules and regulations to be issued of the par value, of such shares of stock: Provided,
by the Secretary of Finance, the Commissioner of Th.at in the case of the original issue of shares of
Internal Revenue or his authorized representatives stock without par value, the amount of the
may conduct periodic random field tests and documentary st.amp tax herein prescribed shall be
confirmatory tests onfuel required to be marked under based upon the actual consideration for the issuance
Section 148-A found in warehouses, storage tanks, of such shares of stock: Provided, further, That in
gas stations and other ret.ail outlets, and in such other the case of stock dividends, on the actual value
properties of persons engaged in the sale, delivery, represented by each share."
trading, transportation, distribution, or importation
of fuel intended for the domestic market: Provided,
74 75
SEC. 52. Section 175 of the NIRC, as amended, is hereby stamp tax of One peso (Pl.00) on each Two hundred
further amended t.o read as follows: pesos (P200), or fractional part thereof, of the face
value of such certificates or memorandum."
"SEC. 175. Stamp Tax on Saks, Agreements
to Sell, Memoranda of Saks, Deliveries or Transfer SEC. 54. Section 178 of the NIRC, as amended., is hereby
further amended to read as follows:
lt
of Shares or Certificates of Stock. - On all sales, or
agreements to sell, or memoranda of sales, or
deliveries, or transfer of shares or certificates of st.ock "SEC.178. Stamp Tax on Bank Checks,
in any association, company, or corporation, or Drafts, Certificates ofDeposit not Bearing Interest,
f
l
;
transfer of such securities by assignment in blank,
or by delivery, or by any paper or agreement, or
and Other Instruments. - On each bank check,
draft, or certificate of deposit not drawing interest,
i memorandum or other evidences of transfer or sale -
~ -or order for the payment of any sum of money.drawn
;
f. m
. wheth~r entitling the-holder _any -maim~!' to th.e upon or issued .b y any b~ trust complbl.y, or any
·f benefit ofsuch st.ock, or to secure the future payment person or persons, companies or corporations, at sight
of money, or for the future transfer of any stock, or on demand, there shall be collected a documentary
there shall be collected a documentary stamp tax of stamp tax of Three pesos (P3.00)."
One peso and fifty centavos (Pl.50) on each Two
hundred pesos (P200), or fractional part thereof, of SEC. 55. Section 179 of the NIRC, as amended, is hereby
the par value of such stock: Provided, That only one further amended to read as follows:
tax shall be collected on each sale or transfer of stock
from one person to another, regardless of whether or
"SEC.179. Stamp Tax on All Debt
not a certificate of stock is issued, indorsed, or
Instruments. - On every original issue of debt
delivered in pursuance of such sale or transfer: and
instruments, there shall be collected a documentary
l'rovided, further, That in the case of stock without
stamp-tax of Oiie peso and fifty centavos (Pl.50) on
par value the amount of the documentary-stamp tax
each Two hundred pesos (P200), or fractional part
herein prescribed shall be equivalent to fifty percent
thereof, of the issue price of any such debt
(50%) of the documentary stamp tax paid upon the
instruments: Provided, That for such debt
original issue of said stock."
instruments with terms ofless than one (1) year, the
documentary stamp tax to be collected shall be of a
SEC. 53. Section 177 of the NIRC, as amended, is hereby proportional amount in accordance with the ratio of
further amended to read as follows: its term in number of days to three hundred
sixty-five (365) days: Provuled, further, That only
"SEC.177. Stamp Tax on Certificates of one documentary stamp tax shall be imposed on either
Profits or Interest in Property or Accumulations. - loan agreement, or promissory notes issued to secure
On all certificates of profits, or any certificate or such.loan.
memorandum showing interest in the property or
accumulations of any association, company or "xx x."
corporation, and on all transfers of such certificates
or memoranda, there shall be collected a documentary
76 77
SEC. 56. Section 180 of the NIRC, as amended, is hereby SEC. 59. Section 183 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:
~SEC. 180. Stamp Tax on All Bills of "SEC. 183. Stamp Tax on Life Insurance
Exchange or Drafts. - On all bills of exchange Policies. - On all policies of insurance or other
(between points withln the Philippines) or drafts, instruments by whatever name the same may be
there shall be collected a documentary stamp tax of called, whereby any insurance shall be made or
Sixty centavos (P0.60) on each Two hundred pesos renewed upon any life or lives, there shall be coDected
(P200), or fractional part thereof, of the face value of a one-time documentary stamp tax at the following
any such bill of exchange or draft." rates:
SEC. 57. Section 181 of the NIRC, as amended, is hereby "If the amount of insurance does not exceed
PI00,000 Exempt
further ~ended to read~ follows:
. "Ji ~e amount of insµ:ranceexceeds
"SEC.181. Stamp Tax Upon Acceptance of PlOO,QOO 1:iut does not exc~ P300,000
Bills of Exchange and Others. - Upon any "If the amount of insurance exceeds
acceptance or payment ofany bill of exchange or order P300,000 but does not exceed PS00,000 P50.00
for the payment of money purporting to be drawn in
a foreign country but payable in the Philippines, there "If the amount of insurance exceeds
P500,000 but does not exceed P750,000 PI00.00
shall be collected a documentary stamp tax of Sixty
centavos (P0.60) on each Two hundred pesos (P200), "If the amount of insurance exceeds
or fractional part thereof, of the _face value of any P750,000 but does not exceed Pl,000,000 P150.00
such bill of exchange, or order, or the Philippine "If the amount of insurance exceeds
equivalent of such value, if expressed in foreign Pl,000,000 P200.00"
currency."
SEC. 60. Section 186 of the NIRC, as amended, is hereby
SEC. 58. Section 182 of the NIRC, as amended, is hereby further amended to read as follows:
further amended to read as follows:
"SEC. 186. Stamp Tax on Policies ofAnnuities
"SEC. 182. . Stamp Tax on Foreign Bills of and Pre-Need Plans. - On all policies of annuities,
Exchange and Letters of Credit. - On all foreign or other instruments by whatever name the same
bills of exchange and.letter of credit (mcluding orders, may be called, whereby an annuity may be made,
by telegraph or otherwise, for the payment of money transferred or redeemed, there shall be collected a
issued by express or steamship companies or by any documentary stamp tax of One peso (Pl.00) on each
person or persons) drawn in but payable out of the Two hundred pesos (P200), or fractional part thereof,
Philippines in a set ofthree (3) or more according to of the premium or installment payment on contract
the custom of merchants and bankers, there shall be price collected. On pre-need plans, the documentary
collected a documentary stamp tax of Sixty centavos stamp tax shall be Forty centavos (P0.40) on each
(P0.60) on each Two hundred pesos (P200), or Two hundred pesos (P200), or fractional part thereof,
fractional part thereof, of the face value of any such of the premium or contribution collected."
bill of exchange or letter of credit, or the Philippine
equivalent of such face value, if expressed in foreign
78 79
SEC. 61. Section 188 of the NIRC. as amended, is hereby SEC. 64. Section 191 of the same Code, as amended, is
further amended to read as follows: hereby further amended to read as follows:
"SEC. 188. Stamp Tax on Certificates. "SEC. 191. Stamp Tax on Bills of Lading or
On each certificate of damage or otherwise, and on Receipts. - On each set of bills of lading or receipts
every other certificate or document issued by any (except charter party) for any goods, merchandise or
customs officer. marine surveyor, or other person effects shipped from one port or place in the
acting as such, and on each certificate issued by a Philippines (except on ferries across rivers), or to any
notary public, and on each certificate of any foreign port, there shall be collected a documentary
description required by law or by rules or regulations stamp tax of Two pesos (P2.00), if the value of such
of a public office, or which is issued for the purpose of goods exceeds One hundred pesos (PlOO) and does not
giving information, or establishing proof of a fact, exceed One thousand pesos (Pl,000); Twenty pesos
and not otherwise specified herein, there shall be (P20.00). if the value exceeds One thousand pesos
collected a docum_entary stamp tax _ofThirty pesos . . (P-1,000): Provided; however, That freight tickets
(P30.90):" · - coveting goods, mercfu!ndise or effects carried as
acrompanied baggage ofpassengers on1and and water
SEC. 62. Section 189 of the NIRC. as amended, is hereby carriers primarily engaged in the transportation of
further amended to read as follows: passengers are hereby exempt."
"SEC.189. Stamp Tax on Warehouse SEC. 65. Section 192 of the NIRC, as amended, is hereby
Receipts. - On each warehouse receipt for property further amended to read as follows:
held in storage in a public or private warehouse or
yard for any person other than the proprietor of such "SEC.192. Stamp TaxonProxies. - On each
warehouse or yard, there shall be collected a proxy for voting at any election of officers of any
documentary stamp tax of Thirty pesos (P30.00): company or association, or for any other purpose,
Provid,ed, That ·no tax shall be collected on each · except proxies issued affecting the .affairs of .
warehouse receipt issued to any one person in any associations or corporations organized for-religious,
one calendar month covering property the value of charitable or literary purposes, there shall be collected
which does not exceed Two hundred pesos (P200)." a documentary stamp tax of Thirty pesos (P30.00)."
SEC. 63. Section 190 of the NIRC, as amended, is hereby SEC. 66. Section 193 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:
"SEC. 190. Stamp Tax on Jai-alai, Horse "SEC. 193. Stamp Tax on Powers ofAttorney.
Race, Ttckets, Lotto or Other Authorized Numbers - On each power of attorney to perform any act
Games. - On each jai-alai, horse race ticket, lotto, whatsoever, except acts connected with the collection
or other authorized numbers games, there shall be of claims due from or accruing to the Government of
collect.ed a documentary stamp tax ofTwenty centavos the Republic of the Philippines, or the government of
(P0.20): Provi.ded, That if the cost of the ticket exceed any province, city or municipality, there shall be
One peso (Pl.00), an additional tax of Twenty centavos collected a documentary stamp tax of Ten pesos
(P0.20) on every One peso (Pl.00), or fractional part (Pl0.00)."
thereof, shall be collected."
80 81
SEC. 67. Section 194 of the NIRC, as amended. is hereby SEC. 69. Section 196 of the NIRC, as amended. is hereby
further amended to read as follows: further amended to read as follows:
"SEC. 194. Stamp Tax on Leases and Other "SEC. 196. Stamp Tax on Deeds of Sale,
Hiring Agreements. - On each lease, agreement, Conveyances and Donation of Real Property. -
memorandum, or contract for hire, use or rent of any On all conveyances, donations, deeds, instruments,
lands or tenements, or portions thereof, there shall or writings, other than grants, patents or original
be collected a documentary stamp tax of Six pesos . certificates ofadjudicati.on:issued by the Government,
(P6.00) for the first Two thousand pesos (P2,000), or whereby any land, tenement, or other realty sold.shall
fractional part thereof, and an additional Two pesos be granted, assigned, transferred, donated or
(P2.00) for every One thousand pesos (Pl,000) or otherwise conveyed to the purchaser, or purchasers,
fractional part thereof, in excess of the first Two or to any other person or persons designated by such
thousand pesos (P2,000) for each year of the term of purchaser or purchasers, or donee, there shall be
said contr~ct or-agreement." _ collected a documentary stamp tax, :at the r.a tes ·
herein ~low prescrllied, based on ~e consideration .
SEC. 68. Section 195 of the NIRC, as amended, is hereby contracted to be paid for such realty or on its fair
further amended to read as follows: market value determined in accordance with
Section 6(E) of this Code, whichever is higher:
· "SEC. 195. Stamp Tax on Mortgages, PT.edges Provided, That when one of the contracting parties
and Deeds of Trust. - On every mortgage or pledge is the Government, the tax herein imposed shall be
oflands, estate, or property, real or personal. heritable based on the actual consideration:
ormovable, whatsoever, wherethesameshallbemade
as a security for the payment of any definite and "(a) When the consideration, or value received
certain sum of money lent at the time or previously or contracted to be paid for such realty, after making
due and owing or forborne to be paid, being payable, proper allowance ofany encumbrance, does.not exceed
and.on any conveyance of land, estate, or property One thousand pesos (Pl,000), Fifteen pesos (Pl5.00). -
whatsoever, in trust or to be sold, or otherwise
converted into money which shall be and intended "(b) For each additional One thousand pesos
only as security, either by express stipulation or (Pl,000), or fractional part thereof in excess of One
otherwise, there shall be collected a documentary thousand pesos (Pl,000) of such consideration or
stamp tax at the following rates: value, Fifteen pesos (P15.00).
"(a) When the amount secured does not exceed ''Transfers exempt from donor's tax under
Five thousand pesos (P5,000), Forty pesos (P40.00). Section lOl(a) and (b) ofthis Code shall be exempt
from the tax imposed under this Section.
"(b) On each Five thousand pesos (P5,000), or
fractional part thereof in excess ofFive thousand pesos "When it appears that the amount of the
(P5,000), an additional tax of Twenty pesos (P20.00). documentary stamp tax payable hereunder has been
reduced by an incorrect statement ofthe consideration
'':x XX." in any conveyance, deed, instrument or writing
subject to such tax the Commissioner, provincial or
83
82
"(c) If the registered gross tonnage exceeds ten "SEC. 236. Registration Requirements. -
thousand (10,000) tons and the duration of the
charter or contract does not exceed six (6) months, "(A) Requirements. - x x x
"XXX
-.,.
84
"The registration shall contain the taxpayer's "Provided, That any person taxed under
name, style, place of residence, business, and such Section 24(A)(2)(b) and 24(A)(2)(c)(2)(a) of the NIRC
other information as may be required by the who elected to pay the eight percent (8%) tax on gross
Commissioner in the form prescribed therefor: sales or receipts shall not be allowed to avail of this
Promded, That the Commissioner shall simplify the option.
business registration and tax compliance
requirements of self-employed individuals and/or "For purposes of Title IV of this Code, any
professionals. person who has registered value-added tax as a tax
type in accordance with the provisions ofSubsection
"xxx (C) hereof shall be referred to as a 'VAT-registered
person' who shall be assigned only one Taxpayer
"(G) Persons Required to Register for Identification Number (TIN).
Value-Added Tax. -
"x XX."
."(1)° ·XXX
SEC. 73. Section 237 of the NIRC, as amended, is hereby
"(a) His gross sales or receipts for the past further amended to read as follows:
twelve (12) months, other than those that are exempt
under Section 109(A) to (BB), have exceeded Three "SEC. 237. Issuance of Receipts or Sales or
million pesos (P3,000,000); or Commercial Invoices. -
"(b) There are reasonable grounds to believe "(A) Issuance. - All persons subject to an
that his gross sales or receipts for the next twelve internal revenue tax shall, at the point of each sale
(12) months, other than those that are exempt under and transfer of merchandise or for services rendered
Section 109(A) to (BB); will exceed Three million pesos valued at One hundred pesos (PlOO) or more, issue
(P3,000,000). . . duly registered receipts or sale or commercial
invoices, showing the date of transaction, quantity,
"xxx unit cost and description of merchandise or nature
ofservice: Provided, however, That where the receipt
"(H) Optional Registration for Value-Added is issued to cover payment made as rentals,
Tax of Exempt Person. - (1) Any person who is not commissions, compensation or fees, receipts or
required to register for value-added tax under invoices shall be issued which shall show the name,
Subsection (G) hereof may -elect to register for business style, if any, and address of the purchaser,
value-added tax by registering with the Revenue customer or client: Provided, further, That where
District Office that has jurisdiction over the head the purchaser is a VAT-registered person, iriaddition
office of that person, and paying the annual to the information herein required, the invoice or
registration fee in Subsection (B) hereof. receipt shallfurther show the Taxpayer Identification
Number (TIN) of the purchaser.
. "(2) Any person who elects to register under
this Subsection shall not be entitled to cancel his
registration under Subsection (F)(2) for the next three
(3) yeai:s.
-:. ,,f,'!
86
"Within five (5) years from the eft'ectivity ofthis of tl:ris Act.and upon the e$tablishment of a system
.. nl! Act and upon the establishment of a system capable capable of storing and processing the required dat.a,
of storing and processing the required data, the the Bureau shall require taxpayers engaged in the
Bureau shall require taxpayers engaged in the export export of goods and services, and taxpayers under
of goods and services, taxpayers engaged in the jurisdiction of the Large Taxpayers Service to
e-commerce, and taxpayers under the jurisdiction of electronically report their sales data to the Bureau
the Large Taxpayers Service to issue electronic through the use of electronic point of sales systems,
subject to rules and regulations to be issued by the
receipts or sales or commercial invoices in lieu of
Secretary of Finance as recommended by the
manual receipts or sales or commercial invoices,
Commissioner of Internal Revenue: J>rouided, That
subject to rules and regulations to be issued by the
Secretary of Finance upon recommendation of the the machines, fiscal devices, and fiscal memory
devices shall be at the expense of the taxpayers.
Commissioner and after a public hearing shall have
been held for this purpose: Provided, That taxpayers
not covered by the mandate of this provision may "The data processing ofsales and purchase data
.issue electronic receipts or, sales. or ·con'lmercial sball ct>mply. with. the provisioll$· of Republic Act.
invoices, in]ieu. of manual receipts, and sales ~d . :. No. ·10173, othe,wise known as the "Data Privacy
commercial invoices. A.cf' and Section 270 of the NIRC, as amended, on
unlawful divulgence oftaxpayer information and such
"The original of each receipt or invoice shall be other laws relating to the confidentiality of
issued to the purchaser, customer or client at the information.
time the transaction is effected, who, if engaged in
business or in the exercise of profession, shall keep "The Bureau shall also establish policies, risk
and preserve the same in his place ofbusiness for a management approaches, actions, trainings, and
period of three (3) years from the close of the taxable technologies to protect the cyber environment,
year in which such.invoice or receipt was issued, while organization, and data in compliance with Republic
the duplicate shall be kept and preserved by the issuer, A<,:t No. 10175 or the_"Cybercrime Prev~ntion Act of
also in his place of business, for a like. period: 2012." _ .
Provided, That in case of electronic receipts or sales
or commercial invoices, the digital records ofthe same SEC. 75. Section 249 of the NIRC, as amended, is hereby
shall be kept by the purchaser, customer or client further amended to read as follows:
and the issuer for the same period above stated.
"SEC. 249. Interest. -
"The Commissioner may, in meritorious cases,
exempt any person subject to internal revenue tax "(A) In General. - There shall be assessed
from compliance with the provisions of this Section." and collected on any unpaid amount of tax, interest
at the rate of double the legal interest rate for loans
SEC. 7 4. Anew section designated as Section 237-A under or forbearance of any money in the absence of an
Chapter II, Title IX of the NIRC, as amended, is hereby inserted express stipulation as set by the Bangko Sentral ng
to read as follows: Pilipinas from the date prescribed for payment until
the amount is fully paid: Provided, That in no case
"SEC. 237-A Electronic Sales Reporting shall the deficiency and the delinquency interest
System. - Within five (5) years from the effectivity prescribed under Subsections (B) and (C) hereof, be
imposed simultaneously.
89
SEc. 79. A new section designated as Section 264-B under of unmarked fuel in commercial quantity held for
Chapter II, Title X of the NIRC, as amended, is hereby inserted dome~c use or merchandise shall. upon conviction,
"(4) Causing the sale, distribution. supply or SEC.' 81. Section 269 of the NIRC, as amended, is hereby
transport of legitimately imported, in-transit, further amended to read as follows:
manufactured or procured controlled precursors and
essential· chemicals, in diluted, mixtures or in "SEC. · 269. Violations Committed by
concentrated form, to any person or entity penalized Government Enforcement Officers. - xx x
in Subsections (a), (b), or (c) hereof, including but not
limited to, packaging, repackaging, labeling,
"(a) xxx;
relabeling or concealment ofsuch transaction through
fraud, destruction of documents, fraudulent use of
permits, misdeclaration, use of front companies or "xxx
mailfraud.
"(h) Having knowledge or information of any
"(d) Any person who willfully inserts, places, violation of this Code or of any fraud committed on
adds or attaches directly or indirectly, through any the revenues collectible by the Bureau of Internal
. ove·r t or covert . ~ct, whatever ·q1,1.antlty of any . Revenue, failure to report such !mowledge or
~arked fuel, counte_rfeit additive _o r chemical in infon:nati.on to th.err
superior officer, or failure to
the person, hous~, effects, inventory, or in the report as otherwise required by law;
immediate vicinity of an innocent individual for the
purpose ofimplicating, incriminating or imputing the "(i.) X X x; and
commission of any violation of this Act shall, upon
conviction. be punished by a fine of not less than "G) Deliberate failure to act on the application
Five million pesos (PS,000,000) but not·more than for refunds within the prescribed period provided
Ten million pesos (Pl0,000,000), and suffer under Section 112 of this Act.
imprisonment of not less than four (4) years but not
more than eight (8) years. "Provided, That the provisions ofthe foregoing
paragraph notwithstanding, any internal revenue
"(e) Any person who is authorized, licensed or ·officer for which ·a prima facie case ·o f grave .
accredited under this Act and its implementing rules misconducthas been est.ahli.shed shall, after due notice
to conduct fuel tests, who issues false or fraudulent and hearing of the administrative case and subject to
fuel test results knowingly, willfully or through gross · Civil Service Laws, be dismissed from the revenue
negligence, shall suffer the additional penalty of service: Provided, further, That the term 'grave
imprisonment ranging from one (1) year and one (1) misconduct', as definedm the Civil Service Law, shall
day to two (2) years and six (6) months. include the issuance offake letters of authority and
receipts, forgery of signature, usurpation ofautho~
"The additional penalties of revocation of the and habitual issuance ofunreasonable assessments.
license to practice his profession in case of a
· practitioner, and the closure ofthe fuel testing facility, SEC. 82. Section 288 of the NIRC, as amended, is hereby
may also be imposed at the instance of the court." further amended to read as follows:
"(B) XXX
"(c) A social weHare and benefits program
where qualified beneficiaries shall be provided with
"(C) XXX
a social benefits card to avail of the following social
benefits:
"(D) XXX
"(i) Unconditional cash transfer t.o households
"(E) XXX in the first to seventh income deciles of the National
Household Targeting System for Poverty Reduction
"(F) Incremental Revenues from the Tax (NHTS-PR), Pantawid Pamilyang Filipino Program,
Reform for Acceleration and Inclusion (TRAIN). _ and the social pension program for a period of three
For five (5) years from the effectivity of this Act, the (3) years from the effectivity of this Act: Provided,
yearly incremental revenues generated shall be That the unconditional cash transfer shall be Two
automatically appropriated as follows: hundred pesos (P200.00) per month for the first year
and Three hundred pesos (P300.00) per month for
. "(1) Not ~ore:than·seventy percent ('70%) t.i the seco~dyear and third-year, to be implemented by.
· the·Department of Social Welfare and Development
fund infrastructure projects such as, but not limited
to, the Build, Build, Build Program and provide (DSWD);
infrastructure programs to address congestion
through mass transport and new road networks · "(ii) Fuel vouchers to qualified franchise holders
military infrastructure, sports facilities for publi~ of Public Utility Jeepneys (PUJs);
schools, and potable drinking water supply in all
public places; and "(i:h) For minimum wage earners, unemployed,
and the poorest fifty percent (50%) of the population:
"(2) Not more than thirty percent (30%) to fund:
"(1) Fare discount from all public utility
. _"(a) Programs under Republic Act ;No.10659, vehicles (except trucks for hire and school transport
otherwise known as 'Sugarcane Industry Development service) in the amount equivalent t.otenpe:rcent (10%)
Act of 2015', to advance the seH-reliance of sugar of the autb.ori.zedfare;
farmers that will increase productivity, provide
livelihood opportunities, develop alternative farming "(2) Discounted purchase of National Food
systems and ultimately enhance farmers' income· Authority (NFA) rice from accredited retail stores in
'
the amount equivalent to ten percent (10%) of the net
"(b) Social mitigating measures and retail prices, up to a maximum of twenty (20) kilos
investments in: (i) education, (ii) health, targeted per month; and
nutrition, and anti-hunger programs for mothers
infants, and young children, (iii) social protection: "(3) Free skills training under a program
(iv) employment, and (v) housing that prioritize and implemented by the Technical Skills and Development
directly benefit both the poor and near-poor Authority (TESDA).
households;
"'Provided, That benefits or grants contained
in this Subsection shall not be availed in addition to
any other discounts.
96
(c) Sections 18 and 19, insofar as VAT (k) Section 12, second sentena!, insofar as VAT
exemption is concerned, ofRA 6847 or The Philippine exemption is concerned, of R.A 7373 or An Act
Sports CommissionAct; Establishing the East.em Visayas Science High
School;
-{d) . · Section 8(d),-last paragraph, insofar as
VAT exemption is concerned;ofRA 7278 or An.Act . · Q.) . Section ll(J), insofar as VAT exemption.is
Amending Commonwealth Act No. 111, as Amended concerned, ofRA 7605 or the Charter ofthe Philippine
by P.D. 460, entitled An Act to Create a Public State College ofAeronautics;
Corporation to be Known as the Boy Scouts of the
Philippines, and to Define its Powers and Purposes, (m) Section 126, insofar as VAT exemption is
by Strengthening the Volunteer and Democratic concerned,' of R.A. 7653 or The New Central Bank
Character of the Boy Scouts of the Philippines and Act;
for Other Purposes;
(n) Section 14, insofar as VAT exemption is
(e) Section 1, insofar as VAT exemption is concerned, of R.A. 7875 or the National Health
concerned, of RA 7291 or AnAct Restoring the Tax Insurance Act of 1995;
and Duty Incentives Previously Enjoyed by the
. Veterans Federation ofthe Philippines under Republic . (o) Section 18, lll.SOfar as VAT·ex~mption is
Act Numbered Twenty-Six Hundred and Forty; concerned, and Section 18, last paragraph ofRA 7884
or the National Dairy Development Act of 1995;
(f) Section 21, insofar as VAT exemption is
concerned, ofRA 7306 or the Charter of the People's (p) Section 8, insofar as VAT exemption is
Television Network, Inc.; concerned, R.A. 8160 or An Act Granting the
University of the Philippines a Franchise to
(g) Section 14, insofar as VAT exemption is Construct, Install, Operate and Maintain for
concerned, of R.A. 7354 or the Postal Service Act of Educational and Other Related Purposes, Radio and
1992; Television Broadcasting Stations Within the
University ofthe Philippines and in Such Other Areas
(h) Section 9(c), insofar as VAT exemption is Within the Scope ofits Operation;
concerned, of R.A. 7355 or the Manlilikba ng Bayan
Act;
. . ~'lU.I.
100
I.
I. (q) Sections 2 and 16, insofar as·VAT exemption
, (y) Section 13, insofar as VAT exemption is
concemed. of R.A. 9083 or An Act Establishing the
is concerned, ofR.A. 8282 or The Social Security Act
Sta. Rosa Science and Technology High School in
of1997;
Sta. Rosa, Laguna;
(r) Section 39, insofar as VAT exemption is
(z) Section 7(c). and (f), insofar as VAT
concerned, of R.A 8291 or The Government Service
Insurance System Act of 1997; exemption is concerned, of R.A. 9138 or AJ1 Act
Establishing the Guiinaras State College;
(s) Section 4(c) and (f), insofar as VAT
(aa) Section 7(c), insofar as VAT exemption is
exemption is concerned, of R.A. 8292 or the Higher
Education Modernization Act of 1997; · concerned, of R.A. 9141 or An Act Converting the
Negros Occidental Agricultural College into State
College to be known as the Negros Occidental
(t) Section 25, insofar as VAT exemption is
Agricultural College;
concerned, of RA 8492 or the National Museum Act
-of1998; · · ·
. - . "(bb) Section·16,·~ofar as VAT·exem})tion_is
concerned, ofRA 9497 or The CivilAviationAutb.ority
(u) Section 3(h), insofar as VAT exemption is
Actof2008;
concerned, of R.A. 8502 or the Jewelry Industry
Development.Act of 1998;
· (cc) Section 25(b) and (c), insofar as VAT
exemption is concerned, and (d), insofar as VAT zero-
(v) Article 65, insofar as VAT exemption and rating is concerned, of R.A. 9500 or the University of
zero rating is concerned, of regional or area
the Philippines Charter of2008;
headquarters and zero-rating of the sale or lease of
goods and property and the rendition of services to
(dd) Section 25(b) and (c), insofar as VAT
regional or area headquarters, and Article 67, insofar
as VAT exemption is concerned, of R.A. 8756· exemption is concerned, and (d) insofar as VAT
Provided, That existing RHQs and ROHQs enjoyin~ . . zero-rating is co~cerned, of R.A. 9519 or An Act
VAT exemption and zero-rating at the time of the Converting Mindanao Polytechnic State College into
effectivity of TRAIN shall not be affected; a State University to be Known as the Mindanao
University ofScience and Technology;
(w) Section 7(c), insofar as VAT exemption is
concerned, of R.A. 9045 or An Act Creating the (ee) Section 17(c), insofar as VAT exemption is
Batangas State University; concerned, ofRA 3591, otherwise known as the PDIC
Charter, as amended by Section 8 of R.A. 9576,
otherwise known as An Act Increasing the Maximum
(x) Section 7(c), insofar as VAT exemption is
Deposit Insurance Coverage, and in Connection
· concerned, of R.A. 9055 or An Act Converting the
Therewith, to Strengthen the Regulatory and
Aklan State College of Agriculture into the Aldan
Administrative Authority, and Financial Capability
State University;
of the Philippine Deposit Insurance Corporation
(PDIC), Amending for this Purpose Republic Act
102 103
Numbered Three Thousand Five Hundred (nn) Section 35 (b)(c), with respect to VAT, of
Ninety~One, as Amended, Otherwise Known as the R.A. 8550 or The Philippine Fisheries Code 9£ 1998;
PDIC Charter, and for Other Purposes;
(oo) Section 13, second paragraph., with.respect
(ft) Sections 2 and 19, insofar as VAT to VAT, of R.A. 10817 or the Philippine Halal Export
exemption is concerned, of R.A. 9679 or An Act Development and Promotion Act of 2016;
Further Strengthening the Home Development
Mutual Fund, and for Other Purposes; (pp) Section 9(3), (4), and (8), with respect to
VAT, of RA 8479 or the Downstream Oil Industry
(gg) Section 23, insofar as VAT exemption is Deregulation Act of 1998;
concerned of the National Historical Commission of
the ~hilippines, ofR.A.. 10086, or the Strengthening (qq) Sectio~ 6(c) and (d), with.respect to VAT,
Peoples' _Nationalisni Through Philippin~ Hist.9ry Act; - .· -of R-4\. 7103 or the ho~ and Steel In~ustzy Act; ·
(hh) Section 7(b) and (c), insofar as VAT (rr) Section 10, with respect to VAT, of
exemption is concerned, and (d), insofar as VAT R.A. 7718 or An Act Amending R.A. No. 6957;
zero-rating is concerned, ofR.A. 9647 or the Philippine
Normal University Modernization Act of 2009;
(ss) Section 26(B)(3), with respect to VAT, of
R.A. 9275 or the Philippine Clean Water Act of 2004;
(ri) Section 17, insofar as VAT exemption is
concerned, of R.A. 7898, as amended by
(tt) Section 20(d)(3) ofR.A. 7279 or the Urban
R.A. 10349, Establishing the Revised AFP
Development and Housing Act of 1992;
Modernization Program and for Other Purposes;
(uu) Section 20(d)(3) of°R.A. .10884 or An Act
@ Section 56, insofar as VAT exemption is
Strengthening the Balanced Housing Development
concerned, ofR.A. 10801 or the Overseas Workers
Program, Amending for the Purpose RA 7279, as
Welfare Administration Act;
Amended, Otherwise Known as the Urban
Development and Housing Act of 1992;
(kk) Section 9 (e)(2) and 6), with respect to VAT,
of R.A. 7900 or the High-Value Crops Development
(vv) Section 14, with respect to VAT, of
Actof1995;
R.A. 8423 or the Traditional and.Alternative Medicine
Act (TAMA) of 1997;
(11) Section 24(e) of R.A. 10068 or the Organic
Agriculture Act of 2010;
(ww) Section 22(b) ofR.A. 10747 or the Rare
Diseases of the Philippines;
(mm) Section 14(b), with respect to VAT,
R.A. 7308 or the Seed Industry Development Act of (xx) Section45(a), (b), and(c), with.respect to
1992; VAT, of RA 9003 or the Ecological Solid Waste
Management Act of 2000;
104
105
(yy) Section 5(b), with respect _to VAT, of
R.A. 10771 or the Philippine Green Jobs Act of 2016; (c) Section 4 of RA 1169 or An Act Providing
for Charity Sweepstakes, Horse Races and Lotteries:
(zz) Section 6, with respect to VAT, of R.A.
7459 or the Investors and Inventions Incentives Act "SEC. 4. Holding ofsweepstakes. - The Office
of the Philippines; shall hold charity horse race sweepstakes under such
regulations as shall be promulgated by the Board in
(aaa) Section 24, insofar as VAT exemption accordance with Republic Act Numbered Three
of foundations for scientific advancements is hundred and nine: Provided, however, That when
concerned, of RA 2067, as amended, or the Science the holding of a sweepst.akes race to det.ermine prizes
Act of 1958; and is impossible due to war, public calamity, or other
unforeseen or fortuitous event or when there is no
'(bbb) . Section 9,' with. l"espect tiVAT, of · sufficient number of horses to determine the_major
R.A. 9511 or the National Grid Corporation of the prizes, the Board of Directors ~ay determine th.e
Philippines Act. · procedure to be followed in the distribution ofprizes
in the most just, equitable and expeditious manner.
The horse races and the sale of tickets in the said
Provi,ded, That the VAT obligations of government- sweepstakes shall be exempt from all taxes, except
owned and-controlled corporations, state universities that each ticket shall bear a twelve-centavo internal
and colleges, and other government instrumentalities revenue stamp. The tickets shall be printed by the
whose VAT exemption has been repealed under this Government and shall be considered government
Act shall be chargeable to the Tax Expenditure Fund securities for the purposes of penalizing forgery or
(TEF) provided for in the annual General alteration."
Appropriations Act: Proui,ded, further, That VAT
exemptj.on, VAT zero-rating, and VAT credit granted
to state universities and colleges on their purchases . • (d) Section 5 of RA 8756 or ~A~Providing
and importations are ·h ereby repealed and the for the "Te~ms, Conditions and Licensing
Requirements of Regional or Area Headquarters,
transactions affected herein are made subject to the
VAT provisions of Title IV ofthe NIRC, as amended. Regional Operating Headquarters, and Regional
Warehouses of Multinational Companies, .Ainending
for the Purpose Certain Provisions ofExecutive Order
Provi,ded, That, with respect to income tax, No. 226 or The Omnibus Investments Code of 1987:
the following laws or provisions of laws are hereby Provided, That existing Regional or Area
repealed or amended:
Headquarters, Regional Operating Headquarters, and
Regional Warehouses of Multinational Companies
(a) Section 33(A) of R.A. 7277, as amended by enjoying the preferential income tax rate at the time
R.A. 10754 or the Magna Carta for Persons with of the effectivity of the TRAIN shall not be affected;
Disability;
(e) Section 2 of P.D. 1354, s. 1978 or Imposing
(b) Section22(B) ofR.A. 10165 or the Foster Final Income Tax on Subcontractors and Alien
Care Act of 2012; Employees ofService Contractors and Subcontractors
Engaged in Petroleum. Operations in the Philippines
under Presidential Decre·e No. 87: Provided, That
service contractors and subcontractors enjoying the
preferential income tax rate at the time of the
effectivity of the TRAIN shall not be affected; and
Approved,
rJ\. x:J,~~v;
ioclLrJo"KOKa'PIMENTELIIl PANTALEON D.
President ofthe Senate
111i!.
REPUBLIC OF ~!IE PHILIPPINES
PRRD 2016 - 006774
0