Professional Documents
Culture Documents
Tax Quiz Bee
Tax Quiz Bee
Percentage tax is a business tax imposed on persons, entities, or transactions specified under Sections 116 to
127 of the National Internal Revenue Code of 1997 (also known as Tax Code), as amended, and as required under
special laws.
Quarterly Percentage Tax under Sections 116 to 126 of the Tax Code, as amended
Persons refer to individuals and non-individuals, which include, but are not limited to, estates, trusts,
partnerships, and corporations.
1. Persons, who are not VAT-registered, who sell goods, properties or services, whose annual gross sales
and/or receipts do not exceed three million pesos (Php3,000,000.00) and are exempt from value-added tax
(VAT) under Section 109 (BB) of the National Internal Revenue Code, as amended by Republic Act (RA) No.
10963.
2. Persons who lease residential units where the monthly rental per unit exceeds fifteen thousand pesos
(Php15,000.00) but the aggregate of such rentals of the lessor during the year does not exceed three million
pesos (Php3,000,000.00)
3. Persons engaged in the following industries/transactions:
a. Cars for rent or hire driven by the lessee, transportation contractors, including persons who transport
passengers for hire, and other domestic carriers by land for the transport of passengers (except
owners of bancas and owners of animal-drawn two-wheeled vehicle) and keepers of garages
b. International air/shipping carriers doing business in the Philippines on their gross receipts derived
from transport of cargo from the Philippines to another country
c. Franchise grantees of –
i. radio and/or television broadcasting companies whose annual gross receipts for the
preceding year do not exceed Php 10,000,000.00 and did not opt to register as VAT
taxpayers, and
ii. gas and water utilities.
d. Overseas dispatch, message or conversation transmitted from the Philippines by telephone,
telegraph, tele-writer exchange, wireless and other communication equipment services, except those
transmitted by:
When to File/Pay
· Within twenty-five (25) days after the end of each taxable quarter
Overseas dispatch, message or conversation Amount paid for the service 10%
originating from the Philippines
Banks and non-bank financial intermediaries Interest, commissions and discounts from lending
performing quasi-banking functions activities as well as income from financial leasing,
on the basis of remaining maturities of instruments
from which receipts are derived:
• If maturity period is five years or less 5%
• If maturity period is more than five 1%
years
Dividends and equity shares and net 0%
income of subsidiaries
Royalties, rentals of property, real or 7%
personal, profits from exchange and all
other items treated as gross income
under Sec. 32 of the Tax Code, as
amended
Net trading gains within the taxable 7%
year of foreign currency, debt
securities, derivatives and other similar
financial instruments
Other non-bank financial intermediaries Interest, commissions, discounts and 5%
all other items treated as gross income
under the Tax Code, as amended
Interest, commissions, discounts from lending
activities, as well as income from financial leasing
on the basis of remaining maturities of instruments
from which such receipts are derived:
• If maturity period is five years or less 5%
• If maturity period is more than five 1%
years
Life Insurance Company/Agent/Corporation Total premiums collected 2%
(except purely cooperative companies or
associations)
Agents of foreign insurance companies (except reinsurance premium):
Insurance agents authorized under the Insurance Total premiums collected 4%
Code to procure policies of insurance for
companies not authorized to transact business in
the Philippines
Owners of property obtaining insurance directly Total premiums paid 5%
with foreign insurance companies
Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%
Cabarets, Night or Day Clubs, videoke bars, Gross receipts 18%
karaoke bars, karaoke televisions, karaoke boxes
and music lounges
Boxing exhibitions (except when the World or Gross receipts 10%
Oriental Championship is at stake in any division,
provided further that at least one of the
contenders for World Championship is a citizen of
the Philippines and said exhibitions are promoted
by a citizen/s of the Philippines or by a
corporation/ association at least 60% of the
capital of which is owned by said citizen/s)
Professional basketball games (in lieu of all other Gross receipts 15%
percentage taxes of whatever nature and
description)
Jai-alai and race track Gross receipts 30%
Winnings on horse races · Winnings or 'dividends' 10%
· Winnings from double 4%
forecast/quinella and trifecta bets
· Prizes of owners of winning race 10%
horses
1) What is income?
Income means all wealth which flows into the taxpayer other than as a mere return of capital.
Taxable income means the pertinent items of gross income specified in the Tax Code as amended, less the
deductions, if any, authorized for such types of income, by the Tax Code or other special laws.
Compensation for services, in whatever form paid, including but not limited to fees, salaries, wages,
commissions and similar items
Gross income derived from the conduct of trade or business or the exercise of profession
Gains derived from dealings in property
Interest
Rents
Royalties
Dividends
Annuities
Prizes and winnings
Pensions
Partner's distributive share from the net income of the general professional partnerships
o Life insurance
o Amount received by insured as return of premium
o Gifts, bequests and devises
o Compensation for injuries or sickness
o Income exempt under treaty
o Retirement benefits, pensions, gratuities, etc.
o Miscellaneous items
Income derived by foreign government
Income derived by the government or its political subdivision
Prizes and awards in sport competition
Prizes and awards which met the conditions set in the Tax Code
13th month pay and other benefits not exceeding P90,000
GSIS, SSS, Medicare and other contributions
Gains from the sale of bonds, debentures or other certificate of indebtedness with a maturity of more than five
(5) years
Gains from redemption of shares in mutual fund
a) *Optional Standard Deduction - an amount not exceeding 40% of the gross sales/receipts for individuals and gross
income for corporations; or
- Expenses
- Interest
- Taxes
- Losses
- Bad Debts
- Depreciation
- Depletion of Oil and Gas Wells and Mines
- Charitable Contributions and Other Contributions- Research and Development
- Pension Trusts
* Not allowed to non-resident alien individual
* A General Professional Partnership (GPP) may avail of the OSD only once, either by the GPP or the partners
comprising the partnership
a. An individual earning purely compensation income whose taxable income does not exceed P250,000.00
b. An individual whose income tax has been withheld correctly by his employer, provided that such individual has only
one employer for the taxable year
c. An individual whose sole income has been subjected to final withholding tax or who is exempt from income tax
pursuant to the Tax Code and other special laws.
e. Those who are qualified under “substituted filing”. However, substituted filing applies only if all of the following
requirements are present:
- the employee received purely compensation income (regardless of amount) during the taxable year;
- the employee received the income from only one employer in the Philippines during the taxable year;
- the amount of tax due from the employee at the end of the year equals the amount of tax withheld by the
employer;
- the employee’s spouse also complies with all 3 conditions stated above;
- the employer files the annual information return (BIR Form No. 1604-CF); and
- the employer issues BIR Form No. 2316 (Oct 2002 ENCS version) to each employee.
ii. A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an
immigrant or for employment on a permanent basis
iii. A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires
him to be physically present abroad most of the time during the taxable year
iv. A citizen who has been previously considered as a non-resident citizen and who arrives in the Philippines at any
time during the year to reside permanently in the Philippines will likewise be treated as a non-resident citizen during
the taxable year in which he arrives in the Philippines, with respect to his income derived from sources abroad until
the date of his arrival in the Philippines.
An individual citizen of the Philippines who is working and deriving income from abroad as an overseas Filipino worker
is taxable only on income from sources within the Philippines; provided, that a seaman who is a citizen of the
Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel
engaged exclusively in international trade will be treated as an overseas Filipino worker.
NOTE: A Filipino employed as Philippine Embassy/Consulate service personnel of the Philippine Embassy/consulate
is not treated as a non-resident citizen; hence, his income is taxable.
a. For “with payment” ITRs (BIR Form Nos. 1700 / 1701 / 1701Q / 1702 / 1702Q / 1704)
File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank
(AAB) of the place where taxpayer is registered or required to be registered. In places where there are no AABs, file
the return directly with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality in which
such person has his legal residence or principal place of business in the Philippines, or if there is none, filing of the
return will be at the Office of the Commissioner.
b. For “no payment” ITRs -- refundable, break-even, exempt and no operation/transaction, including returns to be paid
on 2nd installment and returns paid through a Tax Debit Memo(TDM)
File the return with the concerned Revenue District Office (RDO) where the taxpayer is registered. However, "no
payment" returns filed late shall not be accepted by the RDO but instead, they shall be filed with an Authorized Agent
Bank (AAB) or Collection Officer/Deputized Municipal Treasurer (in places where there are no AABs), for collection of
necessary penalties.
10) How is Income Tax payable of individuals (resident citizens and non-resident citizens) computed?
On Compensation
Total Compensation Income P ___________
Less: Non-taxable Income ____________
th
13 month pay and other benefits (max) 90,000.00
Taxable Compensation Income P ----------------
Multiply by Tax Rate (0% to 35%) ____________
Tax Due on Compensation P ___________
On Business Income
A. Through withholding
B. Pay the balance as you file the tax return, computed as follows:
*Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first
installment to shall be paid at the time the return is filed and the second installment on or before October 15 following
the close of the calendar year to the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office
(RDO) where the taxpayer is registered
Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession,
conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code),
as amended, less the deductions if any, authorized for such types of income, by the Tax Code, as amended, or other
special laws.
Individuals
Resident citizens receiving income from sources within or outside the Philippines
o Employees deriving purely compensation income from two or more employers, concurrently or
successively at any time during the taxable year
o Employees deriving purely compensation income regardless of the amount, whether from a single or
several employers during the calendar year, the income tax of which has not been withheld correctly
(i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return
o Self-employed individuals receiving income from the conduct of trade or business and/or practice of
profession
o Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or
business and/or practice of profession
o Individuals deriving other non-business, non-professional related income in addition to compensation
income not otherwise subject to a final tax
o Individuals receiving purely compensation income from a single employer, although the income of
which has been correctly withheld, but whose spouse is not entitled to subs tituted filing
Non-resident citizens receiving income from sources within the Philippines
Aliens, whether resident or not, receiving income from sources within the Philippines
Non-Individuals
1 Bureau of Internal Revenue is under the Department of Budget and Management. FALSE
2 One disadvantage of registering a business is having the freedom to advertise business because it is FALSE
legit and credible
3 The enhancement of forfeitures, including the penalties and fines are all functions of the Court of FALSE
Appeals
4 Two copies of BIR Form 1901 version 2018 or the Application for Registration form should be TRUE
accomplished.
5 If a ledger is not readily available, the Simplified Book of Accounting can be an alternative. TRUE
6 The original copy of DTI certificate is required to register a business. FALSE
7 Sample receipts, used to register a business, can either be Sales Invoice for services or Official Receipt FALSE
for goods.
8 Under the tax code, all persons doing business and earning income in any manner or form are TRUE
required to register their business.
9 A loose documentary stamp tax costs Php40, used to be attached to the certificate of registration. TRUE
10 A registration fee of Php500 will be collected to register a business. TRUE
11 For below Php100 sale of goods and services of Non-VAT, it is must issue Sales Invoices/ Official FALSE
Receipts (pursuant to Sec. 113 and 237 of the Tax Code)
12 The two columnar books needed in registering a business are Cash Receipt Book and Cash TRUE
Disbursement Book.
13 Taxation is an enforced proportional contribution upon persons only, imposed by the government for FALSE
public use.
14 Preserving the book of accounts should be within 10 years prescribed by law for the filing of return or TRUE
actual date of filing of return, whichever
comes later.
15 During the business operation, it is a must to Display the original Certificate of Registration, Notice to TRUE
Issue Receipt/Invoice and
Payment of Registration Fee (BIR Form 0605) in your store.
16 In the cash receipts book, the following details are important: Date, Serial No. of Receipts/Invoices TRUE
issued, amount.
17 Annual registration fee of Php500 is paid yearly multiplied by the number of separate or distinct TRUE
establishment or place of business.
18 In the cash receipts book, categorizing the amounts disbursed is important. FALSE
19 Quarterly Income Tax Returns or BIR Form1701Q is required to be filed by both individual and non- FALSE
individual.
20 Income tax and business tax are the only tax returns to be filed. FALSE
21 The new tax schedule is effectively started on January 1, 2019. FALSE
22 For individuals, the Income Tax Returns should be filed every 15th day of the 4th moth following the TRUE
close of the taxable year (April 15).
23 In the general ledger, sales and purchases should be noted daily. FALSE
24 The tax schedule is effective for 5 years. TRUE
25 If the income of an individual exceeds Php250,000 yearly, the tax rate is 0%. FALSE
26 The minimum corporate income tax is 2% of the net profit. FALSE
27 The regualr rate of income tax for non-individual is 35%. FALSE
28 An itemized deduction must be ordinary and necessary trade, business or professional expenses TRUE
attributable to the business or practice of profession.
29 Gross receipts less cost of sales is equal to the taxable income. FALSE
30 The optional standard deduction for a corporation is 40% of net income. FALSE
31 Optional standard deductions multiplied by 40% is the taxable income. TRUE
32 Republic Act No.10963, known as Tax Reform for Acceleration and Inclusion was signed into law by TRUE
President Rodrigo Duterte.
33 Tax credit can only be claimed if BIR form 2316 was filed with proof of payment. FALSE
34 A percentage tax of 3% is required to be paid alongside with value-added tax according to Section FALSE
109(B) of tax code.
35 The due date of payment of percentage tax for the 2nd quarter is every July 25 TRUE
36 Surcharge is additional payment when payment becomes overdue. TRUE
37 The compromise penalty is fixed at Php5,000. FALSE
38 Interest to be paid in percentage tax is based on the number of days delayed. TRUE
1. 1.Mama Lydia operates 5 jeepneys in Pangasinan. All fifteen are operational during the months of
April, May and June. Every month, the gross income of each jeepney is Php12,000.
a. How much is the percentage tax payable of Mama Lydia in the month of May?
b. How much is the percentage tax payable of Mama Lydia for the quarter?
c. If Mama Lydia will pay on August 3, how much is her total tax due?
2. Ms. Editha has unpaid percentage tax of Php5,000 during the 2nd quarter. For the 3rd quarter, she has
a total gross sales of P180,000.
a. How much is the percentage tax payable of Ms. Editha during the 3rd quarter?
b. How much is the tax due of Ms. Editha at the end of the September?
c. If Ms. Editha plans to pay on November 8, how much will her tax due be?
1 If the gross sales of a business is amounting to Php2,900,000 and is believed to exceed Php3,000,000 TRUE
for the next year, registration under value-added tax is required.
2 An owner of a business can choose whether to register under value added tax or not upon initial TRUE
registration.
3 An owner chose to register under VAT in 2020. In the year 2022, the gross sales of the business totals FALSE
P600,000. The owner may change from VAT to non-VAT.
4 Output tax less input tax is equal to VAT payable. TRUE
5 Input VAT is the value added tax added to the price you pay for eligible goods or services. TRUE
6 Output VAT is the value added tax that you calculate and charge on your own sales of goods and FALSE
services if you are registered for VAT.
7 Partnerships can avail optional income tax of 7%. FALSE
8 A non-VAT taxpayer can avail the optional income tax on gross sales in excess of Php200,000. FALSE
9 If a Non-VAT taxpayer chooses to avail of the optional income tax, the business tax due is always zero. TRUE
10 If a taxpayer wants to avail of the optional income tax, an intention to do so must have been FALSE
expressed in any of the quarter.
11 Expanded withholding tax is the same as withholding tax. FALSE
12 Government offices are mandated to withhold taxes. TRUE
13 Income payments to rentals is subject to 5% withholding tax. TRUE
14 1st quarter withholding tax payments is due every 31 st of July. FALSE
15 Form 1601EQ is to be filled up during payment of quarterly withholding tax. TRUE
16 In the cash receipts book, the following details are important: Date, Serial No. of Receipts/Invoices TRUE
issued, amount.
17 Only Electronic Submission of Annual Alphalist of Payees is a required attachment of payment of FALSE
withholding tax.
18 The employees are the withholding agents of withholding tax. FALSE
19 An alien earning compensation income in the Philippines is subject to withholding tax. TRUE
20 Withholding tax should be remitted quarterly. FALSE
21 The monthly remittance for the first 11 months of the calendar year must be made every 15 th day FALSE
following the close of the month when the withholding was made.
22 Inventory list has to be submitted to BIR every February 1 st. FALSE
23 If the taxable sales is understated by 25% the Commissioner of Internal Revenue FALSE
suspend the business operations of a taxpayer.
24 If the taxable sales is overstated by 25% the Commissioner of Internal Revenue FALSE
suspend the business operations of a taxpayer.
25 BIR form 1905 is also called Application for Registration. TRUE