PERCENTAGE TAX

Percentage tax – are taxes imposed on the sale, barter, exchange, or

importation of goods or the sale of services, based upon the gross sales,
value in money or receipts desired by the manufacturers, producer, importer
or seller.
Sec. 116 – Tax on persons exempt from VAT – shall pay a tax equivalent to 3%
of his gross quarterly sales or receipts provided that Cooperatives is
exempted. Persons liable to Percentage tax
1. Persons who sales or receipts are exempt from VAT a and nonVAT
registered for having annual gross or receipt not exceeding ₱550,000
2. Domestic common carriers and keepers of garages Cars for rent
or hire driven by the lessee; transportation contractors, including persons
who transport passengers for hire; and other domestic carriers by land, air
or water, for the transport of passengers; and keepers of garages.
Except: a. owners of bancas
b. owners of animal-drawn two-wheeled vehicles shall pay 3%
of their quarterly gross receipts
>In computing 3%- minimum gross receipts
Jeepney for hire Manila and other cities ₱ 2,400
Provincial 1,200
Public Utility Bus Not exceeding 30 passengers ₱ 3,600
Exceeding 30 but not 50 passengers 6,000
Exceeding 50 passengers 7,200
Taxi Manila and other cities ₱ 3,600
Provincial 2,400
Car for hire (with chauffeur) ₱ 3,000
Car for hire (without chauffeur) 1,800

3. International Carriers
a. International air carriers doing business in the Philippines – 3%of
their quarterly gross receipts
b. International shipping carriers doing business in the Philippines – 3%of
their quarterly gross receipts
4. Tax on Franchises
 a. Radio and TV broadcasting companies – gross receipts not exceed
10M – 3%– option to be registered as VAT payer, once the option exercised,
no revocation
b. Electronic, gas and water utilities – 2%on gross receipts – without
option to register as VAT taxpayer
5. Tax on Overseas Dispatch, Message or Conversation Originating from the
Philippines
a. by telephone
b. wireless and other communication
Tax 10%– on the amount paid for such services
-- person paying the service to the person rendering the service
- person rendering services required to pay and collect the tax within
20 days after the end of each quarter
Exemptions:
a. Government
b. Diplomatic services – Embassy and Consular offices of a foreign
government
c. International Organizations – Red Cross, UNICEF, OXFAM, MERLIN
d. News Services – DZMM, GMA, ABS – CBN
6. Banks and Non-Banks Intermediaries
A. Interest, commissions and discounts from lending activities
a. Short term maturity (not exceed 2 years) 5%
b. Medium Term (2 years not exceed 4 years) 3%
c. Long Term maturity (over 4 years) 1%
B. Royalties, rentals of property, real or personal, profits from
exchange and all other items 5%

7. Tax on Finance Companies (same as above except royalties)

8. Tax on Life Insurance Premium – 5%of the total premium collected
9. Tax on Agents of Foreign Insurance Companies
Fire, marine and other miscellaneous
2 X 5%= 10%- total premium collected
10. Amusement Taxes
Shall be collected from the
 a. Proprietor
b. Lessee or operator of,
Cabaret 18%
Cockpit 18%
Night or day club 18%
Boxing exhibitions 10%
Professional basketball games 15%
Jai-alai 30%Race track 30%
11. Tax on Winnings – horse races – 10%
12. Tax on (A) Sale, Barter or Exchange of Shares of Stock Listed and Traded
through Local Stock exchange or (B) through Limited Public Hearing (Close
held Corporations)
A – ½ of 1%= gross selling price of shares of stock sold
B – close held corporations – 50%of the outstanding capital owned by
not more than 20 persons
25%of the shares of stock sold 4%
Over 25%but not exceed 33 1/3% 2%
Over 33 1/3% 1%
Paid by the corporation in primary offering or the seller in
secondary offering
Payment – within 5 banking days after collection - Public
offering – 30 days from the date of listing of the shares of stock in
the local stock exchange
A. Returns of Gross Sales, Receipts and Payment of Tax
1. Every person subject to percentage tax shall pay
within 25 days after the end of taxable quarter
2. Person retiring from business subject to percentage
tax shall notify the nearest BIR within 20 days after closing
the business; unless otherwise provided by the law